2000 billion euros in the world per year. The estimated cost of stockouts and overstocks has not decreased despite the many tools available. “This figure is based both on lost sales on the one hand, and on the obsolescence of a stored product or unnecessarily retained capital on the other.explains Jean-Baptiste Clouard, co-founder of Flowlity. In 15 years, in proportion to demand, we have 32% more stock and certain sectors such as pharmaceuticals have seen their stock multiplied by ten.”
The start-up founded in 2019, which develops supply chain software, also relied on the observation of a more volatile, uncertain, complex and ambiguous supply chain with products with multiple configurations, dispersed stocks and more suppliers. “Management becomes complex to know where to place stocks for example.” To answer it, she surrounded herself with a team of researchers in artificial intelligence and applied mathematics.
A three-level response
Flowlity is primarily aimed at operational players in charge of inventory planning, with SaaS software that will help the company have the right stock in the right place and at the right time thanks to a forecasting system based on the artificial intelligence. “AI intervenes for probabilistic forecasting of demand and lead time by integrating delay forecasts or the actual delivery of a product.”
Secondly, Flowlity will predict the different scenarios to implement an optimal strategy with a buffer stock intended to cover the uncertainty of demand thanks to maching learning and statistical algorithms. Finally, the solution participates in the management of replenishment orders when each supplier has its own quantity or price criteria with an operational research optimization algorithm.
A new solution to simulate the impact of strategic decisions
Alongside this tactical combination responding to operational planning players, Flowlity will release a solution in February for managers responsible for managing the supply chain. Destitute after the Covid crisis and the war in Ukraine, supply chain managers had no tools to support their decision-making, contenting themselves with making and redoing calculations. “They were working with S&OP solutions [sales and operations planning] but had nothing reactive to test the scenarios in an agile way and see their impact.”
When these managers have stock value objectives set for the end of the year, for example, Flowlity carries out simulations on the impact of each strategic decision of the manager to achieve them. From there, he can decide what he will store or not, choose to favor a customer or negotiate with a supplier. With the simulations, Flowlity will test the different levers. “It’s a disruptive tool on the market because we started from scratch”, insists Jean-Baptiste Clouard.
This new solution was co-constructed with several customers and partners of the start-up such as Saint-Gobain and L’Oréal, as well as other CAC 40 companies. A Beta version will be marketed in February 2023, primarily targeting industrial players in assembly manufacturing (automotive, aeronautics, electronics, watchmaking, pharmaceuticals, etc.). “We will add machine learning to group products that look alike, to assess how the group responds to a strategy.”
Flowlity’s 32-person team is also working on a new innovation for the end of 2023.
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How Flowlity makes inventory management easier for manufacturers
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