Because an EPM system tracks every order, managers can determine both every customer’s demand variance (order pattern) for every product they purchase and every customer’s profitability. These systems can produce the profit and demand variance information needed to set the right inventory and service intervals for every product ordered by every customer. In that era, it made sense to have broad, companywide policies for inventory management, like just-in-time vs just-in-case.īut today, advance analytics and business intelligence tools, such as an enterprise profit management (EPM) system, can provide profitability metrics down to the transaction level. As a result, service intervals (the time between when an order is received and when the customer receives the shipment) were typically the same for all customers. They also had to monitor aggregate supply chain metrics like the percent of complete on-time order shipments. Instead they had to watch broad aggregate financial metrics like revenue, gross margin, and cost. In the past, this was impossible to do because companies did not have adequate information on customer profitability and product demand patterns. just-in-case question is both companies should run multiple parallel supply chains with the supply chain structure and inventory strategy tailored to the specific customer and product. In other words, the right answer to the just-in-time vs.
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