www.logility.com unlock the working capital in your supply chain tuesday 23 rd october 2012 mike...
TRANSCRIPT
www.logility.com
Unlockthe
Working Capital in your
Supply Chain
Tuesday 23rd October 2012 Mike Spragg, Vice President – Logility EMEA
www.logility.com
© 2012 Logility, Inc. Proprietary & Confidential
Agenda
• Supply Chain Planning – Crucial in Today’s Economy for Releasing Working Capital
• Introduction to Logility
• Customer Testimonial
www.logility.com
© 2012 Logility, Inc. Proprietary & Confidential
TotalSupplyChainCosts
Service Level 100%
.... And in Supply Chain terms?
Better Service for same money
You arehere
Where are you?
But you can’t be because there is an efficiency barrierdue to: Lead time
Supply variability Demand variability Order size Order frequency Etc
Same Servicewith reducedSupply ChainCosts You’d love
to be here!
www.logility.com
© 2012 Logility, Inc. Proprietary & Confidential
Why do companies hold inventory?
To cover uncertainty in demand
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© 2012 Logility, Inc. Proprietary & Confidential
Inventory Means Different Things to Different People
WarehouseManager
FinanceDirector
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© 2012 Logility, Inc. Proprietary & Confidential
Why do companies hold too much inventory?
• In a complex supply chain, they don’t have the right tools to accurately predict demand for hundreds and possibly thousands of items, so they go on the safe side, and keep high inventories just in case they get an order
• The more accurately they can predict (forecast) demand, the less safety stock they need
FORECAST ACCURACY affects SAFETY STOCK levels
(The better the accuracy, the lower the safety stock)
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© 2012 Logility, Inc. Proprietary & Confidential
Better Demand Forecasters Have…
• 15% less inventory
• 17% stronger order fulfillment
• 35% shorter cash-to-cash cycle times
• Fewer stock outs
5% improvement in forecast accuracy = 10% perfect order improvement
3% perfect order improvement = 1% increase in profit margin
Source: AMR Research, Debra Hofman, Perfect Order = ability to deliver and order to the customer that is complete, accurate, on-time and in perfect condition
www.logility.com
© 2012 Logility, Inc. Proprietary & Confidential
A real end-to-end Supply Chain......
⟰ S
upply ⟰
⟰
D
eman
d ⟰
Manufacturing
Distribution
Inventory is everywhere
Customers
Suppliers
This is where Logility can help
www.logility.com
© 2012 Logility, Inc. Proprietary & Confidential
Global provider of collaborative supply chain software solutions
Over 1,250 customers in more than 75 countries
Comprehensive best of breed SCM product suite
Innovative Proven Reliable
40+ years of supply chain expertise
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© 2012 Logility, Inc. Proprietary & Confidential
OUTPLAN ● OUTPACE ● OUTPERFORM
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© 2012 Logility, Inc. Proprietary & Confidential
Collaboration
Logility Solution Overview
HistoricDemand
• Forecast• Forecast Error
• Multi Echelon, time-phased, Safety Stock targets
• Current Supply Chain status:(Inventory, Expected Receipts, Orders)
• Time-phased multi-echelon Replenishment plan/Allocations
Law
son
Mov
ex /
M3
Constrained Production Plans
• Productionrequirements
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© 2012 Logility, Inc. Proprietary & Confidential
Voyager in the Real World
⟰ S
upply ⟰
⟰
D
eman
d ⟰
Manufacturing
Distribution
Inventory is everywhere
Customers
Suppliers
www.logility.com
© 2012 Logility, Inc. Proprietary & Confidential
Industry Validation
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© 2012 Logility, Inc. Proprietary & Confidential
Logility: A LeaderGartner SCP Magic Quadrant
“Logility is a vendor that always gets great user feedback, since its users are typically very satisfied with their SCP solutions and deployments.”
“Customers report good ease of use, strong references, fast ROI and responsiveness to suggestions for product enhancements.”
- Tim Payne, Research DirectorSCP Magic Quadrant, Sept. 2010
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© 2012 Logility, Inc. Proprietary & Confidential
Logility - Industry Presence
Consumer goods Durable goods Electronics Food & Beverage
Home Furniture Life Sciences
Personal Care Process/ Chemicals
Retail Service/ Aftermarket Softgoods/ Apparel Wholesale/ Distribution
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© 2012 Logility, Inc. Proprietary & Confidential
What Do These Companies Have In Common?
They all run Logility SCP solutions alongside their Lawson M3 ERP installations.
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© 2012 Logility, Inc. Proprietary & Confidential
SandvikGroup
SandvikMining
SandvikMachiningSolutions
SandvikMaterialsTechnology
SandvikConstruction
SandvikVenture
Order intake 99,078 MSEK
Invoiced sales 94,084 MSEKReturn on capital employed 16,0%Operating margin 10,8%
Shareholders 113 000
Proportion of shares outside Sweden 33 %Investments in property, plant and equipment 4,994 M SEKNo. of production units worldwide 140
No. of employees 31 Dec 2010 50,030
Sandvik – Global leader
2011 figures
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© 2012 Logility, Inc. Proprietary & Confidential
Sandvik Mining and Sandvik ConstructionAfter Market Business
Tools Spare Parts, Service
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© 2012 Logility, Inc. Proprietary & Confidential
Characteristics of a supply chain – our starting point
Low agility to market demand
Waste
Low visibility - tail and head disconnectedLong lead times
Unpredictable raw material supply
High inventory
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© 2012 Logility, Inc. Proprietary & Confidential
Delivery performance
Competitive Best
Flexibility andresponsiveness
Cost
Assets
Order fulfilment lead time
Tools
Delivery performance to standard lead time Delivery performance to customer request Fill rate
Upside flexibility Supply chain response time Inventory and supply visibility
Distribution cost
Inventory Days of supply (RM+WIP+FG) Cash-to-cash cycle time
Order fulfilment lead time(Time from order to delivery)
Example metricsSupply Chain performance dimension
Parts
What is the most important competitive requirement for each sub-supply chain ?
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© 2012 Logility, Inc. Proprietary & Confidential
Tools
Parts
1
2
Characteristics Fewer products, higher volumes Predictable demand Longer customer lead-times Competitive market place Own manufactured products Traditional product supply chain - Lean
practices appropriate Transportation by sea and road (no air)
Characteristics Many products, low volumes Un predictable demand Short customer lead-times Parts from external suppliers Spare parts supply chain – assortment
is key High speed logistics
Requiring two separate distribution supply chains with different characteristics
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© 2012 Logility, Inc. Proprietary & Confidential
One size doesn’t fit all is valid for supply chain as well
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© 2012 Logility, Inc. Proprietary & Confidential
Why Sandvik Chose Logility…
• World Class Software Solution Supports Original Equipment and Aftermarket Modular Approach Configurable Software, adapts to changing business environment
• Ease of Use Intuitive, ‘user friendly’ system for successful user adoption “The solution handles complexity while being easy to understand”
• Successful Implementations Quicker time to benefit than other solutions Track record of Successful Implementations
• Customer Focus Many long standing customers, successful partnerships
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© 2012 Logility, Inc. Proprietary & Confidential
Sandvik Results to Date
• Immediate improvements on fill rates compared to previous months
• After the 1st complete month, achieved a 100% fill rate on their targeted items.
• 44% Reduction in transportation costs
• Improved inventory planning to support safety stock policy to achieve a 98% service level.
www.logility.com
© 2012 Logility, Inc. Proprietary & Confidential
Feel free to get in touch...
James [email protected]
07917 708 870
Logility web site - www.logility.comRich source of supply chain information, knowledge, best
practice, case studies, videos, white papers...
www.logility.com
© 2012 Logility, Inc. Proprietary & Confidential
www.logility.com
© 2012 Logility, Inc. Proprietary & Confidential