How you should be using Multi-Echelon Inventory Tools

Sara Hoormann Principal
Read Time: 2 minutes apprx.

Distribution warehouse, package shipment, freight transportation and delivery concept

In a previous blog Dr. Mike Watson offered up a statement that seemed to goes against what people have been taking for granted within inventory solutions for years: You Don’t Need the Optimization in Multi-Echelon Optimization.  Opex Anlaytics Data Scientist, Bradford Winkleman recently followed this up with very insightful Guest Blog for Supply Chain Digest digging into how Multi-Echelon Inventory Tools are actually best used.  He introduces the topic of MEIC (Multi-Echelon Inventory Calculations) which are powerful and complex solutions in their own right.  While MEIC solutions might not use ‘Optimization’ they do consider interactions across echelons, propagation of demand and forecast error, risk pooling and handle both Raw Material and Finished Goods inventory simultaneously.  Brad nicely illustrates best practices for companies who are using these solutions in an analogy to flying.  The Destination being your Desired Inventory and Service Levels and the Pilot being the Inventory Planner.  Read the full blog post on SC Digest here:  How you should be using Multi-Echelon Inventory Tools.  You can also catch Dr. Mike Watson being interviewed on his thoughts on not needing Optimization portion of MEIO here:  Supply Chain Newsmakers Videos