Echelon Inventory

What is Echelon Inventory?

Echelon inventory or multi-echelon inventory is defined as the inventory level between any particular stage in the supply chain and the final customer. Effective Multi-echelon inventory optimization is crucial for smooth supply chain performance as maintaining optimal levels of stock at the right location at the right time helps in meeting supply chain demands efficiently. Multi-echelon inventory optimization enables to keep the right levels of stock in accordance with multi-echelon planning throughout the supply chain distribution networks.

Adopting a strategic and mathematical approach to calculating the right levels of inventory at each stage in the supply chain can help in solving the real-world challenges in inventory optimization.

Advantages of multi-echelon inventory optimization

• Helps in keeping the right levels of inventory across multiple distribution centers
• Improves dispatch scheduling and inventory planning
• Enables well-informed supply chain decision-making
• Reduces inventory handling and storage costs
• Keeps customers satisfied by ensuring on time fulfillment of orders

How Locus helps businesses with dynamic route planning