Right Sized Inventory (RSI): Establish Optimal Inventory Levels Round the Clock

David McPhetrige, Business Partner, Right Sized Inventory (RSI)David McPhetrige, Business Partner
Right Sized Inventory (RSI) started as a collaboration between two dedicated inventory-optimization enthusiasts: Dave Cook and David McPhetrige. With a combined experience of over four decades in inventory and supply-chain management, they worked together to turn McPhetrige’s patented technology into a product that could help thousands of small and medium sized businesses. “We spent many years as supply chain consultants where we observed inventory planning practices that could have been significantly improved with better tools. RSI came about from painful experiences in our past lives where we just didn’t feel like we had the tools to do our jobs right,” says McPhetrige. The result was a cloud-based inventory-optimization solution affordable to businesses of any size. “We focus on one thing, inventory optimization, and we do this better than anyone else by leveraging our patented predictive-analytics technology not available in any other solution,” adds Cook.

McPhetrige observes that if the balance between consumer side and supplier side inventory flow is not stricken, it affects productivity. He reckons that long-overlooked inventory-optimization opportunity lies in determining the truly optimal inventory position for every inventory item in every location. And, because it requires no changes to the existing supply chain, nor improvements to supply-chain processes such as forecasting or ERP system, it can be deployed quickly and easily. RSI exploits this intelligence to offer affordable, cloud-based predictive-analytics optimization software that simulates real-world client environments, predicts optimum inventory levels at the item-by-item level, and enables clients to realize better business outcomes by eliminating inventory imbalances and quantifying risk.

RSI’s patented predictive-analytics technology provides two key elements: a probabilistic Monte Carlo model that accurately and correctly represents all real-world factors affecting actual inventory and service-level behavior; and statistics that correctly represent demand and supply variability.

We focus on one thing, inventory optimization, and we do this better than anyone else by leveraging our patented predictive analytics technology not available in any other solution

The technology resolves inventory imbalances to improve working-capital position and mitigate risk, prevents future shortages and stock-outs, and eliminates non-value-added work from supply-chain team members’ daily activities.

The company’s predictive-analytics model generates a minimum of 2,000 independent inventory-behavior simulations for an entire supply chain at the individual item level; thus, quantifying and accounting for any randomness, intermittency, uncertainty, and variability in determining optimal inventory levels. By “stress testing” an organizational environment through simulations, RSI can identify, mitigate, and resolve any high-risk factors in advance of live ERP parameter changes. They run each simulation as lean as possible without jeopardizing service levels, enabling a high confidence level of achieving target service levels without expediting.

In an instance, a large power control module and thermal instrumentation manufacturer were using a competitor’s software for inventory planning. “After evaluating RSI technology, they told us our software is more sophisticated, significantly easier to use, and does a much better job of optimizing inventory levels for their volatile demand,” says Cook. RSI’s modeling methodology helped the client’s team understand where and why inventory is being driven in their supply chain, and what improvement initiatives will achieve the best results.

RSI’s global market presence serves businesses of all sizes, from “mom-and-pop” shops to Fortune 100 companies. They are currently supporting clients in numerous industries, and aim towards continuous expansion in various industry arenas. “We will continue with our broad market approach, maintaining our alignment with our founder’s vision to ‘provide the best inventory-optimization tool on the market; one that nearly every company can afford,’” concludes McPhetrige.