Consumption-Based Replenishment Causes Chronic and Frequent Shortages

Cupertino, CA -- (ReleaseWire) -- 01/07/2015 -- Ultriva, the leader in collaborative supply chain solutions, invited Chad Smith, a Supply Chain expert and co-founder of the Demand Driven Institute to present a webinar with Ultriva about consumption-based replenishment. The description of the webinar is on the company blog. Smith is the co-author of Orlicky's Material Requirements Planning, which suggested the result of MRP's shortcomings and/or poor implementation is that companies have chronic and frequent shortages at various stages of the production, procurement, and fulfillment cycles.

Smith went on to say these chronic and frequent shortages tend to lead to three main effects:

Unacceptable inventory performance. This is identified as having too much of the wrong material, too little of the right material, high obsolescence, and/or low inventory turns. Companies frequently can identify many of these problems at the same time.

Unacceptable service-level performance. Customers continue to put pressure on the company, which quickly exposes poor on-time delivery, low fill rates, and poor customer satisfaction. In addition, customers consistently attempt to drive prices down.

High expedite-related expenses and waste. In an attempt to fix the preceding two unacceptable business results, managers will commit to payment premiums and additional freight charges or increase overtime to fulfill promises. Typically, this effect is under-measured and underappreciated in most companies.

Inventory can be an asset or a liability depending on how it is managed. Ultriva uses business rules, sizing algorithm, and collaborative visibility, to ensure the right part is at the right place at the right time. With a built-in work flows, exception alert mechanisms and rules engine, inventory managers are agile, proactive, and efficient.

To read the entire blog, go to: http://web.ultriva.com/ultriva-blog/bid/103573/MRP-Shortcomings-Generate-Chronic-Shortages-in-Supply-Chain

About Ultriva
Ultriva's (http://www.ultriva.com) cloud-based platform leverages seamlessly integrates with leading ERP and MRP systems, to deliver an end to end pull based replenishment solution. Ultriva, based in Cupertino, CA, implements a global demand driven manufacturing model by providing full visibility, scheduling, and sequencing of production of customer orders. Ultriva was named one of the Great Supply Chain Projects of 2014 by Supply & Demand Chain Executive magazine and recently named one of 50 Best Supply Chain Blogs of 2014 by SupplyChainOpz. The company's global footprint is increasing rapidly with implementations in wide variety of industry sectors and enterprises such as Magellan Aerospace, CareFusion, Emerson, Ingersoll Rand, McKesson, Triumph Group, Regal Beloit, Thermo Fisher, and more.

Follow Ultriva on Twitter at @Ultriva

Ultriva, Inc.
http://www.ultriva.com
Cynthia Leonard
Marketing Executive
cynthiaL@ultriva.com
408-961-2495

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