Maximizing efficiency through PO optimization

In this episode, Josh Bartel and Drew Roth discuss PO (Purchase Order) optimization, a crucial component of inventory optimization services. They explain how PO optimization focuses on improving the “how” of placing purchase orders, aiming to minimize inventory while maintaining high customer service levels and reducing labor costs.

Josh and Drew highlight common issues in traditional PO processes, such as long closure times and multiple receipts per order. They introduce key principles of PO optimization, including building orders unique to each fulfillment facility and matching quantities to vendor stock levels. The duo emphasizes the benefits of this approach, including reduced lead times, fewer errors, and labor savings through improved unit of measure rounding.

The conversation also covers the advantages for suppliers, the data requirements for implementing PO optimization, and the significant improvements seen in clients’ operations. Josh and Drew share examples of how this process can lead to more efficient truck loading and drastically increase the percentage of order value arriving in the first receipt. They conclude by noting that PO optimization is part of Hydrian’s broader service offering, aimed at enhancing coordination between clients and their vendors.