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SAPPHIRENOW – How Medtronic implemented Multi-Echelon Inventory Optimization Globally

Today at SAPPHIRENOW as part of the Demand Network Panel Discussion, Will medtronic.JPGFoster, IT Director in Enterprise Application at Medtronic discussed the benefits of Enterprise Inventory Optimization to his company. Will explained his role as the “global process owner for everything in the PLAN process area, which includes Demand & Supply Planning along with production planning”.   From an applications approach he is responsible for SAP ECC, SAP APO and Enterprise Inventory Optimization (EIO) applications.

Will gave an overview of Medtronic, who are a global healthcare solutions company committed to alleviating pain, restoring health and extending lives of people through medical technologies, services, and solutions. They create meaningful innovations for hospitals, health systems, and health care providers so they can deliver the best care possible to patients and their families around the world.

Implemented SAP Enterprise Inventory Optimization globally across multiple business units

Will discussed the highlights of implementing “multi-echelon inventory planning” across the company and how it:

  • Enables total supply chain view for all items at all stages
  • Considers desired service levels and captures variability within network
  • Synchronizes operations within enterprise systems
  • Provides insight to supply chain performance and process improvements
  • Provides significant safety stock reduction
  • Enables reporting  to assist with Input and Output accuracy

Will also touched upon the business benefit achieved to date:

  • Reduced overall weekly planning cycle duration by >50%
  • Finished Good & Semi-Finished Good safety stock reduction across Supply Chain
  • Service Level Agreement monitoring through weekly optimization monitoring metric
  • Improved forecast accuracy and bias improvements
  • In-depth visibility to entire Supply Chain
  • Improved master data control and accuracy for data input elements
  • Integrated alignment between Demand and Supply
  • Drives process design continuous improvement

This was a great discussion and was well attended by a “standing room only” audience.

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  • Excellent stuff. A key point to note from the above is-

    The inventory optimization solution does much more than work out the safety stock norms. Infact it is the fifth point in the list of benefits mentioned by Will. The key benefit is in managing the levers that influence the inventory. The levers being demand accuracy, supply volatility, planning cycle reduction, reduction in lead times etc. The model answers questions such as the value of the lean management initiatives etc.

    Hope to see more customer leveraging this tool in designing their supply chains.