Multi-echelon inventory optimization services

What EY can do for you

Uncertainty has become the new normal for global supply chain managers. While the stress of the supply chain disruptions after the COVID-19 pandemic has eased, managers still recognize that they need to account for the possibility that the smooth delivery of critical materials could be interrupted by unexpected delays due to extreme weather, political upheaval or other shipping bottlenecks.

These factors continue to complicate long-term planning for supply chain managers, even those with well-established protocols. The EY-Blue Yonder Alliance can help organizations address these supply challenges with a Multi-Echelon Inventory Optimization (MEIO) solution that can help them to boost topline revenue, align inventory and execute global strategy plans, even amid rapidly shifting market conditions.

What is Multi-Echelon Inventory Optimization?

MEIO is a supply chain strategy that helps optimize inventory across multiple stages, from suppliers to distribution centers, helping ensure efficient stock levels throughout the network. By reducing excess inventory and reducing stockouts, MEIO helps businesses lower costs while maintaining high service levels.

The EY-Blue Yonder Alliance leverages advanced artificial intelligence (AI) and machine learning tools to create and evaluate hundreds of end-to-end scenario plans. Through MEIO, Blue Yonder and EY teams will come together to help organizations deploy a broad inventory management approach that improves inventory levels across all supply chain levels (echelons), from raw materials to finished goods.

The EY-Blue Yonder Alliance

The EY collaboration with Blue Yonder gives organizations the ability to leverage MEIO to achieve several broad supply chain benefits, among them:

1. Improved inventory planning: Blue Yonder helps companies manage inventory more efficiently across multiple locations or stages of production. By improving inventory at each level, MEIO helps companies reduce their overall inventory costs so that they meet customer demand, whether it’s delivering raw materials or finished goods.
2. Cost reduction: By balancing inventory levels throughout the supply chain, Blue Yonder MEIO helps companies minimize holding costs, reducing the risk of obsolescence and lowering transportation costs. Companies can avoid excess inventory, while still maintaining service levels.
3. Enhanced service levels: Helping ensure that the right amount of stock is available at the right time and place is another benefit of Blue Yonder’s MEIO solution. As a result, it significantly improves service levels through fewer stockouts, quicker response times, and better fulfilment rates, significantly increasing customer satisfaction and translating into increased revenue.
4. Increased supply chain visibility: MEIO also provides a broad view of inventory across the entire supply chain, helping companies identify bottlenecks and forecast demand more accurately. This supports more informed decisions that also help organizations streamline operations.

Holistic supply chain inventory solution

In addition, the EY-Blue Yonder Alliance uses MEIO to leverage risk pooling to provide a broad inventory solution. When combined with value accelerators and leading EY practices for segmentation and inventory improvement, this solution not only recommends what inventory to carry, but also where to hold it within the network. As a result, this approach maintains the desired customer service levels, by balancing the inventory held at various points in the supply chain.

The solution develops a delta analysis from the current inventory policy to EY and MEIO targets and identifies key areas in the MEIO targets with the greatest opportunity to start achieving value.

MEIO is an essential tool for improving supply chain operations, reducing costs, improving service levels, and gaining a competitive edge in the market.