SIMPLE-System is made to reduce inventory, deficit and order costs. Here you can see how it coped with these tasks.
This answers the question: what would have happened if a firm would have used SIMPLE-System sooner. As if we re-live the past period again. In this case SIMPLE-System uses past demand but proposes new/correct orders: using knowledge about previous periods it makes forecasts, calculates norms and recommends orders, and SIMPLE-System simulates filling the inventory after the agreed time of delivery. Factual inventory summary dynamics is presented as a blue line, and simulated as pink one. In the graphs and tables, we can see that the level of inventory is reduced in simulation, if we check individual dynamics for separate positions we can see that the number and size of periods when inventory remnant is close to zero are less (this leads to increase in sales), that the number of rises is less so the number of orders is less and transportation
The recommended orders in SIMPLE-System are based on the same algorithm as in the simulation except that order and reorder points are calculated according to present on-hand and on-road quantities.
What customers say about SIMPLE-System and Genobium, and their experiences with the implementation of our products.
A wholesale pharmaceutical firm from Krasnodar:
SIMPLE-System was used for the total period, from 01.01.04 to 31.08.04. Actual total stock during this period is represented as a blue line, simulated total stock as a pink line. Notice the fact that the simulation line starts later because it first collect statistics, then simulates orders that add to the simulated stock after the set lead time.
Actual results of inventory management on january 04: order costs = $800,000, inventory = $24,892,595, margin sold = $5,852,462 and a ROI of 20.30%.
Now let us make a comparison with the period of full usage of SIMPLE-System (August 04):
Margin sold increased to $7,090,741 (up from $5,852,462) while inventory reduced to $19,740,097 (down from $24,892,595). Despite an increase in order costs to $1,200,000 (up from $800,000), the ROI increased to 29.84% which is 50% more than before using SIMPLE-System.
The ROI could still go much higher since the simulation data show 48.22% per month (an improvement of 250%) in this period.
Another actual usage of SIMPLE-System by a wholesale pharmaceutical firm:
As is clear from the above figures, SIMPLE-System improved ROI from 24.42% to 30.63%, inventory was reduced from $17,661,407 to $14,111,618 and margin sold has grown from $4,312,318 to $4,322,365. Order costs are close to zero in both cases because the supplier is paying for delivery.
This company also has reserves to improve the ROI to 44.17% per month.