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Home » Services » Inventory Planning » Service Level Strategy
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Service Level Strategy
What Is It?
Chainalytics' Service Level Strategy service can help you maximize the margin contribution of inventory to your bottom line by recognizing that not all items need to be managed at the same service level. Given your working capital and space constraints, our service will help you determine the most profitable service level of each item in relation to other items in the network.
What Do We Do?
Considering your working capital targets, item-location level margins, and capacity constraints, Chainalytics will determine the location-level assortment of inventory that will provide the maximum return on your working capital. Chainalytics can help you maximize the return on your inventory investment by:
- Relating total cost-to-serve and customer profitability using activity-based costing,
- Optimizing your inventory assortment at each location based on profitability and working capital constraints, and
- Optimizing the service level for each item while considering overall targets on fill rates, inventory investment, and space.
Can Service Level Strategy improve your working capital efficiency and make optimum use of your network capacity? Do you find yourself asking the following questions?
- What is the optimum service level for each of my finished goods (or components) within each channel, given my network capacity, lead times, costs, margins, and backorder penalties?
- Given a system- or location-level inventory investment target, what assortment of items should I carry at each location and at what levels?
- Now that I am given an inventory reduction target, how much inventory of which item should I reduce in order to have the least negative effect on service?
- If I offer specific service commitments to my sales channels, will the corresponding inventory investment or space requirement exceed what I can afford? If so, to what levels should I cut back?
Is It Right For You?
You are an ideal candidate for Service Level Strategy if you want to continue to meet service levels while optimizing the efficiency of your working capital and fixed assets, and are looking to:
- Maximize the return on your total inventory investment or storage capacity,
- Determine the fill rates to quote your customers in order to operate profitably,
- Evaluate the profitability of service level agreements
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