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Optimizing Inventory in Practice: What aspects of inventory theory require modification?

Sean Willemswillems
Haslam Chair in Supply Chain Analytics
University of Tennessee
Friday, October 28, 2016  
2:20-3:20pm JDT 410

 

Abstract:

The OM field has placed increasing emphasis on rigorous applied research.  Recently, there have been several articles in M&SOM and POM providing frameworks for applied research.  This talk reflects on my experience applying inventory optimization in practice.  I begin with a framework for practice-based research that I have been applying as the department editor at POM Practice.  I briefly discuss the application of this framework in the context of inventory optimization.  I then document the common pitfalls companies encounter that cause them to abandon inventory optimization and perpetually think of it as the next big savings opportunity. The majority of the talk focuses on solving the problem: documenting how internal analytics teams can develop a two-year plan to successfully implement inventory optimization across the enterprise. Attendees will leave with a concrete understanding of where inventory theory and practice diverge, what facets of inventory theory require modification to successfully implement in practice, the skills analysts need to develop to solve the right problems, and the common traps analysts need to avoid.

Bio

Sean Willems is the Haslam Chair in Supply Chain Analytics at the University of Tennessee’s Haslam College of Business. In 2000, he co-founded Optiant, a provider of multi-echelon inventory optimization tools, which was later acquired by Logility, Inc. His work with companies such as Hewlett Packard and Proctor & Gamble has led to finalist selections for the 2003 and 2010 Franz Edelman Award for Achievement in Operations Research and the Management Sciences as well as finalist selections in 2006, 2008 and 2012 for the Daniel H. Wagner Prize for Excellence in Operations Research Practice. His work on inventory placement under non-stationary demand won the Wagner Prize in 2008. Willems is the department editor of the practice section of the journal Production and Operations Management. He received his bachelor’s degree in decision sciences from the University of Pennsylvania’s Wharton School and his master’s in operations research and doctorate in operations management from the MIT Sloan School of Management.

 

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