Definition
Cross-functional consensus processes for the forecasts of volume sales, production plans and inventory plans, balancing excessive and low stocks and developing short- and long-term response decisions.
In detail
Integrated PSI (Production, Sales & Inventory) is a cross-functional consensus process aligning sales forecasts, production plans, and inventory plans, weighing excess versus insufficient inventory and making long- and short-term response decisions. It addresses supply-demand imbalance, inventory buildup, or shortage. Compared with SIOP (third-party Rexnord course, not a Danaher item), PSI focuses more on execution-level production-sales coordination. Typical outputs: PSI plan, inventory strategy, risk response plan, etc.
Example in practice
A consumer goods company faced seasonal demand fluctuations, often experiencing stockouts in peak seasons and excess inventory in off-seasons. By implementing the PSI process, they held monthly cross-functional meetings where sales, production, procurement, and finance jointly forecasted demand, developed production plans, and set inventory levels. Through data sharing and collaborative decision-making, inventory turnover improved and stockout rates decreased.