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Posted 12 September 2023 by
Luc Wuytens
Director of Delivery for Axon Technology

MEIO: A secret weapon for supply chain optimization 

If you want to remain competitive in today’s supply chain world, it’s pivotal to find ways to optimize. And so, organizations are duly laser-focused on improving various aspects of their supply chains. As they launch their supply chain transformation projects, they would be remiss to overlook multi-echelon inventory optimization (MEIO). In this blog post, we’re going to explain what exactly MEIO is and why it’s essential for achieving a streamlined and efficient supply chain. 

What is MEIO?  

MEIO refers to the process of optimizing inventory levels across the entire supply chain—all the way from the manufacturer to the retailer. Unlike traditional inventory management, which treats each stage of the supply chain in isolation, MEIO takes a more holistic approach. It considers the interdependencies between different stages and aims to minimize system-wide costs while maintaining service levels. 

MEIO in supply chain management 

It would be difficult to overstate the importance of in supply chain management, as it can help with cost savings, service levels, efficiency, and crucially, decision-making: 

  • Cost reduction: MEIO helps companies minimize the total costs associated with holding and managing inventory, including storage, transportation and handling costs. 
  • Improved service levels: By ensuring the right products are available at the right place and time, MEIO can significantly enhance customer satisfaction and service levels. 
  • Increased efficiency: MEIO can streamline the supply chain by reducing excess inventory, minimizing stockouts and optimizing the flow of goods from the manufacturer to the end-user. 
  • Enhanced decision-making: MEIO provides valuable insights into the supply chain, helping companies make informed decisions about inventory levels, product placement and other crucial aspects. 

Key components of MEIO: 

MEIO manages to make an impact on the aforementioned areas of your supply chain due to helpful components that range from demand forecasting and inventory optimization to lead-time management and collaboration. 

  • Demand forecasting: This involves predicting future customer demand to ensure that the right products are available when needed. 
  • Inventory optimization: This includes determining the optimal inventory levels at each stage of the supply chain to minimize costs and maximize service levels. 
  • Lead-time management: This involves managing the time it takes for products to move from the manufacturer to the retailer. 
  • Collaboration: MEIO requires collaboration between different stakeholders in the supply chain, including suppliers, manufacturers and retailers. 

Arming your supply chain with MEIO 

MEIO is a powerful tool that can significantly enhance the efficiency and effectiveness of your supply chain. By optimizing inventory levels across the entire supply chain, companies can reduce costs, improve service levels and gain a competitive edge in the market. As the supply chain landscape continues to evolve, MEIO will undoubtedly play an increasingly important role in ensuring that companies can meet customer demand while minimizing costs and maximizing efficiency.