Supply Chain Consultants and MÖBIUS have entered a partnership agreement to design multi-echelon inventory software to help manufacturers with complex supply chains better position inventories to save money.
The joint effort will combine a comprehensive and predictive mathematical model developed by European consulting company MÖBIUS with SCC’s Zemeter technology to create a commercial offering. The software will help manufacturers set inventory targets for their distribution and warehousing centers, which, in this age of global manufacturing, have become increasingly multi-layered, said Sujit Singh, chief operating officer at the Wilmington, DE-based SCC, in an interview with Managing Automation.
For example, a manufacturer’s product may travel through central, regional, and local distribution and warehousing centers before it arrives in stores or at customer locations, and “how much inventory you hold at each level affects the levels above and below,” Singh explained.
A company’s inventory targets are typically fixed for a period of time, say, three months, Singh said. Supporting software helps manufacturers manage the day-to-day implementation of that inventory plan.
The multi-echelon approach favored by MÖBIUS and SCC can help companies deliver more customized and up-to-date products to widely dispersed warehouse and distribution facilities, the companies said.
“We believe that our new product offering will easily result in a net inventory reduction of at least 25%,” Singh said in a statement announcing the partnership.
In explaining the partnership, Singh said SCC was impressed by MÖBIUS’ approach to the multi-echelon network, adding, “It’s a practical take on a very practical problem.”
The companies anticipate having a commercial product ready toward the end of the second quarter. While SCC will market the product in North America, the partners are still discussing marketing plans for Europe. Singh noted that MÖBIUS, as a pure consulting company, is protective of its independence and may be reluctant to directly market the product.
“We are convinced of the added value of the multi-echelon inventory concept that we have developed through the years and have been implementing with success (20 to 30% extra working capital savings) at companies such as Daikin and Agfa Gevaert,” said Danny Boeykens, partner at MÖBIUS, in the joint statement. “We are pleased to see our knowledge productized by Supply Chain Consultants.”
SCC anticipates the sweet spot in the market for the product to be companies with at least $250 million in revenue. The software will be based on the SQL server database, so it can pull data from anywhere. Later, the companies will build connections to ERP systems, such as those from SAP and Oracle. The inventory software will start as on-premise, but will move toward the software-as-a-service model or even a lease model, Singh said.