Value Assessment
The Value Assessment is a rapid, fact-based analysis of how your company's supply chain performance can be improved -- both immediately and over the long term -- through the use of SmartOps solutions to optimize key operational and planning decisions such as inventory levels, replenishment decisions, and production plans. A Value Assessment results in recommendations that can be measured, understood, and applied to real-world multistage supply chains.
SmartOps Value Assessment projects are designed to quickly answer two important questions:
- How much cash can be generated in the near term by deploying optimal inventory plans?
- Which supply chain improvements will have the biggest impact on the bottom line?
Value Assessment Process:
SmartOps uses a Value Assessment to help customers assess costs, benefits, and risks of potential supply chain strategies before any significant investment is made in a solution. During a Value Assessment, the results are used to gain executive and cross-functional support for driving change and implementing a solution that delivers a step-change improvement in supply chain performance.
Benefits of the Value Assessment:
- Build internal understanding and capabilities around inventory optimization
- Quantify opportunities for improvement
- Develop insight into "how low can we go" by eliminating double buffering
- Identify forms and purposes of inventory
- Implement Value Assessment results to get quick wins
- Create plan for ongoing synchronized inventory optimization
What is required to do a Value Assessment?
Time Frame: Most Value Assessments last 4-8 weeks, depending on the scope of the project, the depth and breadth of analysis, and the associated data availability.
Resources Needed: The project is executed by a team of SmartOps supply chain experts. From your business, we ask for a project sponsor and project leader, as well as someone who will provide data for the analysis. Your resources would not be required full-time but on an as-needed basis.
Data Requirements: SmartOps provides your team with a list of data that is required for the analysis and works with you to gather that information. Customers are often surprised at how quickly we can gather and process the appropriate data from their existing systems.
Budget: Value Assessments, depending on scope and the availability of data, have a modest price range based on hours worked by our team and use of our software. Customers find that the Value Assessments pay for themselves quickly as they begin to execute the optimized inventory targets produced.
What do customers learn in a Value Assessment project?
The six case examples described below summarize the results across a range of industries for recent customers who participated in a Value Assessment.
Consumer Durables |
This manufacturer asked "how low can we go" in reducing inventory without losing a sale, given the high seasonality of their supply chain and demand uncertainty due to impulse purchasing. The SmartOps Value Assessment showed that a reduction of nearly 50% was possible and that their five-year cost-saving goals could be captured and exceeded over the next two years. |
Consumer Packaged Goods |
This top-performing company -- enjoying nearly twice the inventory turns of its closest competitor -- used the SmartOps Value Assessment to see if there was any opportunity for improvement within one of their best-run supply chains. The results showed that they could reduce inventory by nearly 22% over the next six months for that supply chain. |
Industrial Equipment |
This manufacturer, dedicated to Lean Manufacturing and Six Sigma practices, learned that it was possible to nearly double their total chain inventory turns, thereby reducing finished goods inventory by nearly 40%, by using SmartOps' holistic view of the supply chain to optimize the deployment of inventories. The Value Assessment also showed them a way to meet their goal of stabilizing order fulfillment to customer channels. |
Pharmaceuticals |
This pharmaceuticals producer learned through a Value Assessment how they could reduce inventory for over-the-counter items by 30% in the next several months, by optimizing safety stocks and more closely aligning multistage stocking and production plans with demand. |
Distribution |
This distributor of industrial products had dual goals of increasing inventory turns while improving service levels. The Value Assessment identified where they could achieve near-term inventory reductions ranging from 11% for distribution centers to 40% at some branches. The Value Assessment also revealed that at their current service level, 73% of the items could have lower average inventory targets. |
High Tech |
This networking equipment manufacturer was seeking to understand where to keep inventory (appropriate mix of components/parts and finished goods) and how much to keep on hand, in order to improve service levels. The Value Assessment uncovered opportunities to reduce inventory targets by as much as 35%, with the SmartOps solution accounting for the demand variability that was driving excess inventories. |
