I n s p I r a t I o n , I n s I g h t s a n d I d e a s t h a t p u s h t h e b o u n d a r I e s

SC MSUPPLY CHAIN MoveMeNt

business benefits of stock optimisationwww.supplychainmovement.com

www.slimstock.co.uk

Special edition

take stock in the boardroom Hendy ramps up

parts availability Dynamics in retailing

Graham demand accurate supplier KPIs Stock

savings for Cooperative Pharmacy UeL where 100

Percent availability saves lives Adding Value to eRP ING Retail Award of the Year

Inventory

Special

More sales with less inventory?

SLIMSTOCK RETAIL

Juryrapport: Het softwarepakket Slim4 van Slimstock is een applicatie op bestaande ERP-omgevingen

van retailorganisaties. Het systeem kan het voorraadbeheer in het centrale magazijn

optimaliseren en Slim4 kan de winkel replenishment dynamisch en volledig automatisch

inrichten. De jury stelt dat het idee breed - in vele detailhandelsbranches - inzetbaar is.

Het is voor de jury duidelijk gebleken dat in de wijde wereld van voorraadbeheersing-

systemen, Slim4 het voorraadbeheer van haar klanten daadwerkelijk op een hoger niveau

kan tillen. Substantiële voorraadverlagingen en omzetstijgingen als gevolg van een betere

productbeschikbaarheid zijn bewezen resultaten. Het idee heeft volgens de jury een “proven

trackrecord”.

Het beter in- en uitfaseren van artikelen verhoogt de attractiewaarde en de transactiekracht

van de retailformule en verbetert derhalve de marges. Slim4 is geschikt voor grote en kleine

retailorganisaties.

Het pakket voorspelt de toekomstige vraag naar een artikel en houdt daarbij rekening met

trends, seizoenen, schappenplannen en promoties. Elke dag wordt het voorraadoptimum

opnieuw berekend. Deze vorm van dynamisch voorraadbeheer leidt tot een maximale

beschikbaarheid bij een minimaal kapitaalbeslag en “rust” in de gehele keten. Slim4 van

Slimstock zorgt, volgens de jury, voor aanzienlijk minder overbodige productie en

(retour)distributie en is derhalve een MVO vriendelijk idee.

Utrecht, 4 oktober 2010

Jan Brouwer Juryvoorzitter

call for more information (0)2476 695 577 or visit www.slimstock.co.uk

Jury report

The software solution Slim4, from Slimstock, is an add-on application to existing ERP systems within

retail organisations. The system is able to optimise the inventory within the central warehouse as

well as manage the dynamic and automatic replenishment of the stores. The jury is of the opinion

that the idea can be widely used - in many retail sectors.

It has become clear to the jury that in the broad range of existing stock management systems, Slim4

actually brings the stock management of her customers onto a higher level. Substantial reductions

of inventory and increases in turnover, resulting from higher product availability, are the proven

results. The idea has, according to the jury, a proven track record.

Better phasing in and phasing out of products increases the attractiveness and the transactional

power of the retail formula and thereby increases the operational margins. Slim4 is apt for both small

and large retail organisations.

The solution forecasts the future demand of an item and takes into account trends, seasonality, shelf

life restrictions and promotions; each day the optimum stock levels are dynamically calculated. This

kind of dynamic stock management leads to maximum availability with minimal capital requirement

and it brings ‘peace’ into the supply chain. Slimstock’s solution – Slim4 - helps, according to the jury,

to prevent unnecessary production and returns, therefore it is also an idea that helps to support a

better environment .

Utrecht, October 4th, 2010

Jan Brouwer

Chairman of the jury

Stock Wavesrom my studies twenty years ago I recall a picture the Japa-nese painted of the river of

stock. The image was of a boat on a river with dangerous jagged rocks just above the water surface - the water level representing the level of stock. The Japanese vision was that it was good to let the water level drop as much as possible, so that production problems below the water’s surface were avoided by making excess inventory visible on the surface. According to the Japa-nese, underlying problems, such

as quality issues were solved by doing that. However, once rocks and the ground were visible, stock levels would be too low, and wouldn’t result in any sales.

In the current economic climate, many companies have reduced their stock levels because of a sudden drop in demand. A friendly supply chain director at a chemical company told me that they hadn’t experienced any problems with level of service when they reduced their inventory by thirty percent. They subsequently carried out two further reduction exercises without any problems. Today, Financial Directors need to keep an eye on inventory management, in order to reduce working capital. A sudden drop in demand is usually the result of an ampli-fication effect upstream in the supply chain. This in itself proves that customer demand is dynamic. The problem is that demand may vary by product, and over time product dynamics may also change. Many executives believe that their enterprise resource planning system can solve this. It won’t. An ERP system is a very robust IT backbone, however it is primarily a registration system, and isn’t good enough when you need to optimise a hectic and dynamic goods flow environment.Slim4, Slimstock’s best-of-breed software application for inventory optimisation, recognises demand patterns per product including the order method used - based on his-torical data. Similar to radar, Slim4 measures fluctuations below the surface and scans how fast the stream is flowing – to determine the optimal stock level.

Brought to you courtesy of Slimstock, this special edition of Supply Chain Magazine features insightful articles and case studies on the strategic importance of inventory manage-ment to business.

Contents

F

Martijn LofversEditor

martijn.lofvers@supplychainmedia.nl

4 | Take STock In The boardroom

Stock strategy to boost cash

8 | hendy rampS up parTS avaIlabIlITy

UK Auto Dealer revolutionises stock control

10 | STock SavIngS for co-operaTIve pharmacy

Stock strategy central to new business model

12 | dynamIcS In reTaIlIngRetailers discover the perfect way to generate cash

16 | uel, where 100% avaIlabIlITy SaveS lIveS Lichfield firm responds to near-triple demand

20 | addIng value To erp ERP vendors and users tell their stories

25 | graham demand accuraTe SupplIer kpIs Plumbers merchant gets suppliers to work smarter

27 | Ing 2010 reTaIl award of The year Puts dynamic inventory concept on the map

Supply Chain Movement is a Supply Chain Media BV publication

This special edition is produced in collaboration with Slimstock Ltd. and includes articles previously published in Supply Chain Magazine.

AddreSS:

Supply Chain MagazinePO Box 207, 7000 AE DoetinchemThe Netherlands

editor:

Martijn Lofvers email: martijn.lofvers@supplychainmedia.nl

Co-workerS:

Bob Blandford, Gillian Hunter (translation), Marcel te Lindert, Myriam Knook, Marco van Hoeven, Jaap van Sandijk, Guus Pauka (photography), Erik Kriek (illustration),

ConCept And deSign:

Onnink Graphic Communication BV

iSSn: 1873-9806The copying and distribution of articles and features in this magazine is only permitted on the grounds that the source is attributed and written permission is obtained from the publisher.

January 2011

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More sales with less inventory?

VoorraadmanagementInventory Management

take stock in the boardroomhow a stock strategy can help to boost cash

hanks to the economic crisis, stock is once more high on the agenda. Supply chain managers are under pressure to organise their stock as efficiently as possible. Howe-

ver, thorough inventory analysis is complex. Even in the case of a single stock location used as a central distribution center, let alone a complete network of inventory locations. What do you need to stock centrally and what locally? How do you keep track of the differences in purchasing patterns by stock loca-tion? These multi-stock/multi-point supply chains need a lot of

power to properly process all the variables, besides the willing-ness of companies to invest in inventory optimisation. John Perry of Scala Consulting has spent years developing global supply chain strategies through to implementation for major companies including J Sainsbury, M&S, and Tate & Lyle.

He says the theory of multi-echelon inventory analysis is com-plex. The transaction models in ERP software are designed to capture transactions, but not to plan. The software doesn’t

If the recession has taught us anything, it’s that cash is king. one way to free up cash is to reduce working capital by reducing inventory. Within a complex supply chain, stock analysis isn’t always easy. take for example multi-echelon inventory planning. Saying that, very few companies do this at a strategic level.By Marco van der Hoeven and Marcel te Lindert

T

Illus

tratie

: Erik

Krie

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tell you how to be smart with resources and money, or how to maintain service levels.

The problem is that stock analysis, though important, isn‘t addressed at the right level within the organisation. It belongs at the Financial Director’s door. However, when they hear ‘supply chain’ or ‘stock’, they quickly point us in the direction of Opera-tions or Logistics“, says Perry.

Richard Evans of Slimstock says, “Inventory Optimisation is often overlooked. You’d expect that when talking about working capital, the CFO would be interested, or when talking availa-bility, the Commercial Director or the CEO would take note. Hardly anything happens at a strategic level. However, people working at a tactical level are left making strategic decisions, while operational people are kept busy dealing with tactical issues.”

Sales & Operations Planning The recession has changed priorities. Logistics is becoming stra-tegically important. Perry adds, “Cash is king. Companies are closely scrutinising where the cash is. With fewer sales, compa-nies are beginning to look for other ways to generate cash. Free-ing money by reducing stock - without affecting service levels - is a very attractive proposition. It keeps both Finance and Logis-tics happy.”

This doesn’t take away from the fact that stock analysis means different things to different functions. Sales, Marketing, Finance, Operations and Logistics all have different goals. Salespeople want the stock to be there to deliver the sales as

quickly as possible, while the production planners are interested in keeping production lines in motion. As a result, the stock ‘safety-net’ is often set too high.

To get a balance between different interests, companies use a variety of methods and processes. Take for example PaperlinX, the world’s leading paper merchant, operating 23 companies across Europe. All these companies carry out sales and operati-ons planning. “It is important that all the departments use the same facts and figures,” says Bernard Decorte, Project Director of PaperlinX Europe. “This avoids the situation where a sales manager receives a complaint from a customer in the morning – and that afternoon calls to ask for more stock.” Slim4 is the backbone of the PaperlinX sales and operations process. “Using this system, we review the customer complaint against targeted measures, rather than make decisions based on guesswork.”

The PaperlinX sales and operations process takes place over four weeks. Slim4 does a count during the first week in store, which provides the sales forecast. Sales, finance, and logistics discuss the Slim4 results during week two. The figures can be adjusted if say a large client holds a promotion or a paper type is switched. A meeting is held the following week to measure sales success based on KPIs, which is then discussed at the board meeting in the fourth week. Decorte says, “As a wholesaler, our inventory is our most important asset. It’s logical therefore that we address the issue in our boardroom.”

ABC AnalysisPaperlinX‘ inventory management goal is clear: to lower wor-king capital. “Previously our approach to stock was supplier

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Inventory Management

‘We now have a clear view of exactly what will sell, and what we need to hold in stock to keep service levels high’

focused. We stocked whatever our suppliers could provide. We’re now focused on our customers. We only put in stock what we sell.” says Decorte. This has all been made possible by using Slim4, in conjunction with our ERP system from IBS, in the sales and operations process. By doing that, PaperlinX keeps an eye on service levels. “We now have a clear view of exactly what will sell, and what we need to hold in stock to keep service levels high.”

Inventory management is relatively straight-forward. ABC clas-sification is the most commonly used method. As a variant of Pareto Law - it uses the 80:20 rule. This means that 20 percent of products are responsible for 75-80 percent of sales – the rest of the revenue accounts for 20 percent of products in categories B and C.

However for SAP user, Fabory, A, B, C classification isn’t enough. This is because they have a broad portfolio of specia-list fasteners. They stock 125,000 SKUs In their distribution centre in Tilburg. Managing this large quantity is a difficult job for their eight stock managers. Where many companies allocate their product range to A, B and C grades, Fabory addi-tionally classifies items into D, E and F grades. “This includes items that may only be ordered once or twice a year. The custo-mers who order these items only want a few pieces and not the whole box. We are not about high volume and low prices. We specialize in small volumes with high prices, however with a high added value,” says Maurice Geerars, Fabory Supply Chain Director.

PaperlinX also uses the conventional ABC analysis. This ena-bles the wholesaler to manage different inventory levels as well

as different service levels, per category. Decorte says, “Fast movers are very important to our revenue. The service level for fast movers is somewhat higher than for medium movers. “

Allocating stockUltimately, the key question in stock analysis is: ‘What stock do we need where in the supply chain?’. Analysis by category, such as ABC classification, is much less complicated than the next step of choosing the right stock allocation method. There’s no generally accepted methodology for this. The environment largely determines the outcome. Stock analysis, for example, is very different in the retail industry when compared with the auto-industry. Complicated products can have seven or more levels of inventory. Spare parts businesses have irregular and intermittent demand. Assembly lines on the other hand need a continuous flow.

Earn x turnAccording to Richard Evans of Slimstock, it’s important to start inventory analysis at the lowest level – at the item level. “You can build from there. It’s important to look at the type of pro-blem: which items are slow movers and which are fast movers, and what are the seasonal influences? Then look to see whether the stock is in harmony with that. It’s evident that ERP software can’t cope with the dynamics of demand or with the supply chain itself. The stock parameters need to be constantly adap-ted.”

Turnover rate is an accepted logistics indicator. However, it says nothing about the contribution an item makes to the margins – related to invested capital. To do this, you need to multiply

van leeuwen wheeler

Following a major investment programme, the Van Leeuwen Wheeler’s management identified they needed to streamline their stockholding processes. Dave Jenkins, Group Commercial Manager was tasked with revie-wing stockholding practices. He says: “As recession hit, our priority was to support our customers by operating in a way that best met their needs. Many were reducing their own stock, which meant that they looked to us for much faster order turnaround to enable them to meet critical deadlines. We looked to our own housekeeping to ensure that our stock levels were sufficient to meet customer needs - appropriate to the economic environment.We identified we needed an improved fore-casting system. The existing ERP system took

a week to implement and wasn’t giving us the accuracy we needed. The risk was that ser-vice levels might suffer and lead times become extended. It made good commercial sense to upgrade our stockholding systems to drive cost efficiency.

Slim4 provided the visibility we needed. Having pledged to cut inventory levels by 25 to 30 percent, Slimstock actually achieved a 40 percent saving. Slim4 also identified the need for a small increase in stock lines, in order to service a broader customer base.

Other key improvements include improved identification of seasonal items and accurately pin-pointing obsolete stock. By analysing

precisely what is ordered where, Slim4 also identified cost savings by changing transport patterns, essentially eliminating several road trips and rationalising inter-depot stock move-ment.

Dave Jenkins adds: “The partnership with Slimstock has given us a completely new way of analysing and planning inventory control, allowing us to become more proactive rather than reactive in a changing market. The net result is a very strong relationship that has enabled Van Leeuwen Wheeler to save both time and money.”Van Leeuwen Wheeler is the UK’s leading dis-tributor and processor of carbon and stainless steel pipe, tube and bar products.

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the velocity by the margin (Earn x Turn). An item may pro-vide a relatively low margin if the velocity is high enough. An item that has a low velocity, such as a spare part, would need to have a high margin to realise the same contribution. Within the strategic inventory management framework, a company may decide to override this, despite the low turnover rate. Richard Evans, “In these circumstances a number of assump-tions need to be considered, that will need to be substantiated. Some measures may reduce turnover, however with a low mar-gin the Earn x Turn will be down. Sometimes that’s dangerous. So, Earn x Turn is independent of the actual stock. However, it provides a good way to check the health of a company.

In all these cases, a single multi-level approach works best. Jalal Ashayeri, Professor of Quantitative Supply Chain Management feels the problem lies in organisational structure “Multi-level inventory management has huge potential. Howe-ver, in practice it is very difficult for businesses, particularly those operating independent business units to work together to implement a multi-level approach. I’ve come across situ-ations where businesses have five business units all operating independently of each other. You then need to convince five individual business managers that a particular method will be good for everyone. The only way to bring the group together is to tackle the issue at a higher level. But that doesn’t always work, and as a result, some businesses only part-implement a multi-level approach.”

Visibility thanks to ITPaperlinX has several subsidiaries that operate indepen-dently of each other and trade under local brand names, such as Robert Horn in the UK. The company has delibera-tely decided not to have a centrally controlled pan-European sales and operations process for these different companies.

“We want to operate as close as possible to the customer. If we set up a inventory department at European level, we‘ll lose touch with the customer. If you take forecasting for example. It‘s only as good as the knowledge you have of the market and the customers. The closer we get to the market, the greater the knowledge.” Saying that,PaperlinX ensures that the companies consult with one another by holding a monthly conference call to compare KPIs, share successes and discuss best practice. Implementing Slim4 everywhere means that they will soon be able to evaluate each others stock position. If one operating com-pany doesn’t have an item in stock, it will be in the warehouse of another.”We don’t have any concrete targets, however we are con-fident that visibility at a European level will enable us to reduce our inventory and improve service levels,” says Decorte.

Ashayeri explains “Even if everyone agrees, we still have a pro-blem: business units with separate ICT-systems that don’t com-municate with one another. The first thing businesses need to

do is invest in communications technology that allows systems to talk to one another.”Besides the question of technology, businesses need to look at the available knowledge within the organisation. “There’s a need for in-depth knowledge and understanding of the models. If you want to implement changes in the business, you‘ll need to adjust these models. And, the short lifecycle of products means that adjustments need to be made on a regular basis.”

A final complication in a multi-level approach is high manager turnover. “All too often you come across a situation where some-one you’ve worked with leaves after two years. All the knowledge that has been built up disappears, and nobody knows what’s involved and how things are done”. This reinforces the need for the knowledge gained within an organisation to be held within a secure system.

‘Stock analy-sis is actually very impor-tant, however is not addres-sed at the right level within the organisation.’ John perry, md of Scala consulting

‘It is important that all the departments use the same facts and figures.’bernard decorte,paperlinx

‘The netresult is avery strongrelationshipthat hasenabled vanleeuwenwheeler tosave bothtime andmoney.’dave Jenkins, van leeuwen

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report

Leading South-West motor dealer Hendy Group is poised to revolutionise its parts ordering and stock control systems with a high-tech software solution

hendy ramps up parts availability

uK auto dealer revolutionises stock control

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‘the recession has forced companies into supply chain reconfiguration’

he £300m turnover Ford and Ford Commer-cial, Mazda, Honda, Kia, Iveco and LDV dea-ler has signed up with advanced stock optimi-

sation tool developers Slimstock to steer a major replacements parts optimisation and control pro-gramme for its Southampton-based distribution centre serving twenty-five outlets spread between Cornwall and West Sussex.

With more than £2million tied up in parts inven-tory, the 800-man group is looking to the new Bri-tish-developed technology to ramp up parts availa-bility and other improvements while at the same time reducing stock levels by a significant percen-tage, and results are expected to be measured as early at the summer, they say.

Slim4, the advanced tool chosen for the ambitious programme has a track record of delivering often dramatic reductions in inventory levels and invest-ment, typically between 25 and 30 percent without loss of parts availability.

Says Systems Director John Hendy, the move conti-nues the company’s long-held tradition of following good business practice and grasping opportunities as they appear, in-line with manufacturers’ chan-ging demands.

The group’s recent addition of three more dealer-ships as well as the recession dictating the need for tighter stock control and ‘right part, right place, right time’ availability sparked off the search for the right software partner – and factors including price, easy implementation and Slimstock’s perfect match to the characteristics and demands of the auto industry proved the deciding features.

Rapid return on investment is also cited as a major element of the decision, and the company that dubs itself ‘a close-knit family concern’ despite handling sales, servicing, parts, hire, accident repairs and Rapid Fit centres as well as engines and specialist sales to the construction and marine industries, is gearing up for the high-tech tool to come on stream over the next few weeks.

Taking users’ existing data, Slim4 automatically delivers the best ordering method – resulting in faster turnaround time and improvements often measurable within weeks of commissioning.

Slimstock consultant Martin Pye says that the auto industry is a prime target for the Coventry-based developers of Slim4 - with the features of the advanced stock optimisation tool considered ideally-matched to the auto-parts sector.“Among a whole raft of benefits is its ability to manage the slow-moving and irregular components that typify the sector, as well as the ability to easily manage multi locations from a central distribution point” he says.

The developer’s auto sector clients already include AD (Auto Distribution) in the Netherlands and Ire-land, Dutch auto repairs group Lasaulec and Retail Automotive Alliance (RAA), the UK-wide buying group co-operative formed and equally owned by 22 independent car, van and truck retailer groups with the aim of optimising purchasing power for core business related suppliers.

Significantly, the Hendy Group is a RAA mem-ber, alongside names including Essex Auto Group, Greyhound Ford, John Grose Group and Sandicliffe of Leicester.

Considered virtually unique to the industry, Slimstock’s all-out confidence in the tool’s advanced features is such that it’s offered with guarantees of financial returns: despite being viewed as Europe’s leading inventory optimisation program, currently being used in more than 400 applications, the com-pany claims never to have had to refund any client’s outlay.

According to Martin Pye, the recession rammed home the message that effective supply chain plan-ning and management is now crucial to success. “The recession has forced companies to accept that the best route to survival is through supply chain reconfiguration and optimisation. When that’s bac-ked-up with virtually guaranteed results, the outlook for companies acknowledging the new technology already looks brighter than for those that haven’t” he says.

Paradoxically, the year that saw hundreds of com-pany failures is being hailed as ‘the best ever’ for Slimstock with more than 40 new deals clocked-in in Europe in under nine months and several more pending completion in addition to the Hendy Group.

Thendy ramps up parts availability

uK auto dealer revolutionises stock control

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the Co-operative Pharmacy is the third largest retail pharmacy in the UK and its National Distribution Centre (NDC) manages the supply chain for nearly 800 Pharmacy branches in Scotland, england, Wales and Northern Ireland from its depot in Stoke-on-trent.

n 2007 the United Co-operative and the Co-operative Group merged to become the world’s largest consumer co-operative. As part of the merger between the two businesses, the two

pharmacy divisions came together. Each had different proces-ses for the management of the pharmacy supply chain – The Co-operative Group (servicing 500 Pharmacies nationwide) had outsourced the entire supply and fulfilment operation to AAH whilst United Co-operatives (servicing 300 branches mainly in the North-West of England) had developed and run its own sup-ply chain operation for the most common products required by their branches with other products outsourced to third parties.

New business modelAfter 12 months a review was undertaken of the benefits and constraints of the different operations. This review led to a revi-sed business model that would bring improved commercial benefits and advantages to customers and members. The new business model aimed to save £12m per annum in the hand-ling, storage, supply and delivery of medicines, supplements and healthcare products to its network of Pharmacies.

The business decided to build a 180,000 sq ft, fully automated, fully batch controlled NDC in Stoke on Trent to store the best performing products for ‘in-house’ delivery to the 800 existing branches with room to expand to 1,200 branches over a five year period. It is one of Europe’s largest and most technologically advanced distribution warehouses in Europe.

Search for a business partnerTo accommodate this change in the business model, The Co-ope-rative Pharmacy needed a warehouse and distribution manage-ment system that would provide the depth of functionality

required for the pharmaceutical supplies market and a business partner who understood this highly complex and legislative mar-ketplace. As the existing supplier to what had been United Coo-peratives pharmacy business, Brentech Data Systems Ltd was invited to submit a proposal for the provision of the system for the new enlarged business. After a competitive process Brentech Data Systems Ltd was selected due to proven ability to deliver a solution to meet the new requirements.

Process ReviewA full process review was undertaken by The Cooperative Phar-macy and Brentech Data Systems Ltd. This covered every aspect of the supply chain model – from Supplier Rating, Goods-In, Automated Product Routing to put-away, Replenishment, Opti-misation of Order Assembly, Automated Invoice Inclusion with goods and Despatch Segregation management.

Logistics strategyChanges to the business model included a move from ‘twice daily deliveries’ to a single ‘next day’ morning delivery for all orders received prior to 7pm. This has reduced workload on the branch network, and has had a significant impact on The Co-operative Pharmacy’s carbon footprint by cutting mileage by 678,240 miles as a result of the new logistics strategy.

They also introduced the ‘Awards easy order system’ – a single portal for all of the Pharmacists requirements – whether stocked at the NDC or not. It acts as an order management system for all requirements, fulfilling what items it can from the NDC stock and ordering the remaining products from other partners. This allows The Co-operative Pharmacy to guarantee the highest mar-gin for the Pharmacist and customer satisfaction. The ‘portal’ has freed up time and effort at the branches allowing the pharmacist more time to deal with their customers personally as opposed to sourcing products.

The target go-live for the pilot system was January 2010 giving a project implementation period of 18 months. During the imple-mentation the go live date was brought forward by 6 months. The system went live in July 2009 in line with the revised timeframe.

Case study

Stock savings for the co-operative pharmacy

stock strategy central to new business model

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The success of the project enabled the NDC to move to a fully serviced operation across an estate of 800 branches in just six weeks.

Visibility and traceability The solution helped the NDC to reduce stock holding require-ment, reduce average handling cost per SKU by 36% while incre-asing margins, reduce distribution costs and CO2 emissions. It also provided full visibility of the delivery process from the NDC to branch, as well as full product traceability with benefits for any required product recall and improved relationships with manu-facturers.

For their Pharmacists it provided a single, guaranteed morning

delivery allowing branches to better manage staff rotas and duties, guaranteed highest margin for branches on all products ordered through the system. It meant all orders were placed through one system which automatically allocates to relevant supplier, and it provided pro-active alerts to discrepancies with orders and deliveries.

“The system has been designed around users and managers to meet the needs of different roles within the business. Everyone involved signed off the system at specification stage. The new system has been instrumental in improving the efficiency of our business where we can now serve all of our branches with the same processes and have the capacity to expand in the future.” Grant Sharman

‘We can now serve all of our branches with the same processes and have the capacity to expand in the future’

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retailers discover the perfect way to generate cashthe enormous savings potential of stock hasn’t always been recognised. For retailers however, inventory has moved higher and higher up the agenda of late. It’s the perfect way to generate cash, particularly when banks are reluctant to extend credit. However, the strategic use of inventory requires an organisation that is prepared at all levels. Slimstock Retail are specialists in helping to transform and improve highly dynamic retail environments, including dynamic retail environments such as Rituals – europe’s fastest growing home and body cosmetics retailer, and Schiphol Airport Retail, the world’s most successful airport retailer.

trends

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ituals Cosmetics Company has redesigned their inventory process, with the aim of improving their

service levels. They want to improve their service levels by five percent on the previous year, over the peak months of November and December. If this is suc-cessful, Rituals will also organise their store replenishment differently. Rituals Cosmetics is a lifestyle brand that is growing fast. In the next ten years the company wants to open a thousand sto-res. Today, Rituals has around 130 stores in twelve countries. “Our ambition isn’t to be the biggest, but the best”, says supply chain director and co-founder Marcel van Groningen.

Rapid growth was the main reason for purchasing the Slim4 inventory system from Slimstock. “We want to be ready for explosive growth. In fact it’s already star-ted. We want to ensure that process goes smoothly.” says Van Groningen.

Slim4 went into operation at Rituals on 1st June 2010. Within a month of com-missioning Rituals noticed a change in inventory levels. “Slim4 showed us we had too much inventory on C-stock. We’re now reducing that. And we’ve increased our A-stock levels. The system is faster in showing us the changing demand for pro-ducts.”Rituals’ primary objective is to incre-ase their service levels by no less than

five percent. A further challenge is not to increase stock value, but instead to reduce it by fifteen percent. “We could reduce the stock even further, but that’s not our goal. The most important thing is to improve service levels”, says van Groningen.Rituals have given themselves six months to take full advantage of Slim4. At that point, the next phase of implementa-tion starts: using Slim4 to manage retail inventories. “As we’ve grown so quickly, the stock value has moved from our cen-tral warehouse to our stores. Slim4 has given us a better understanding”, says van Groningen. Right now, each store manager needs to manually place orders on the system. Very soon, Slim4 will be able to generate an order advice, based on POS data and current store stocks, without human intervention. The store manager will have no more concerns. “They’ll be able to spend more time ser-ving our customers and selling our pro-ducts.”

‘the most important thing is to improve service levels’

R

marcel van groningen

SchIphol aIrporT reTaIl TakeS conTrol of ITS Supply chaIn

Schiphol Airport Retail purchased the Slim4 system to gain new insight into their sup-ply chain. Following a quick inspection, Slimstock established that the retailer could reduce distribution stock levels by around thirty percent. Schiphol Airport Retail has thirteen airport shops after passport control - marketing itself as ‘See Buy Fly alcohol, tobacco and chocolate’. On the terminal side, there are three major shops dispersed across the site. The company also runs four stores and six last-minute shops. All the stores are supplied five times a day from a 3000sqm warehouse situated a kilometer away from the terminal. “We have a customized ERP system that has limited supply chain management functionality. We had a choice: either invest in this system or look

for standard software. This led to the pur-chase of Slim4 by Slimstock” says Peter-Jan Rozenberg, CEO of Schiphol Airport Retail. A quick check undertaken by Slimstock established that Schiphol Airport Retail could reduce its stock by thirty percent. “The Slimstock inspection gave us good insight into what our working capital was actually doing. The improved materials handling that Slim4 delivered was just as important as reducing the stock”, says Rozenberg. The ability to identify stock exceptions was also important. “Today, one of our team spends 80 to 85 percent of their time working on plans. Soon that will be less than 20 percent. The rest of their time can then be spent optimising the supply chain”, says Rozenberg. The role of planner has changed to that of supply chain analyst.

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IShIkawa-dIagram

The Ishikawa diagram was developed in the sixties by the Japanese professor Kaoru Ishikawa, a pioneer in the field of total quality management. It clearly outlines what the causes of specific quality problems

are in a complex industrial process. The Ishikawa diagram (also called fishbone diagram) has subsequently been widely used as tool in areas such as product development and complex problem

solving. The fish bone diagram on this page indicates which developments and trends in retail are causing the need for a more dynamic way of inventory optimisation within the retail sector.

Successful retailing

requires dynamicand effective

inventory management

Focus oncost efficiency

Product range management is

becoming more complexDemandingconsumers

Increased importanceof store differentiation

ICT solutions

Increasing demandon Personnel

Product innovations

Irregular product lifecycles

Competition

Promotions

Transparency through internet

Price consciousness

Importance of instant availability

Reduction of inventory costs

Reduction of mark downs

More effective sales time

Cash flow management

Shelf space management

Sales per m2

Local demands

Higher turnover rate Quality systems

Best of Breed softwareProcessing power

supply Chain retail trends

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Successful retailing

requires dynamicand effective

inventory management

Focus oncost efficiency

Product range management is

becoming more complexDemandingconsumers

Increased importanceof store differentiation

ICT solutions

Increasing demandon Personnel

Product innovations

Irregular product lifecycles

Competition

Promotions

Transparency through internet

Price consciousness

Importance of instant availability

Reduction of inventory costs

Reduction of mark downs

More effective sales time

Cash flow management

Shelf space management

Sales per m2

Local demands

Higher turnover rate Quality systems

Best of Breed softwareProcessing power

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“Realising that anything less than 100% availability runs the risk of costing lives is a great way of focusing attention on what needs to be done...” says Nathan Bailey, operations Manager of specialist engines manufacturer UeL.

civilian use in border control, oil pipeline inspection and other surveillance activi-ties has also combined with UEL engines’ reputation for exceptional power-to-weight ratio, low vibration, high reliability and low maintenance. “We were in a situation of massively-increasing spares demand and increased levels of stock-holding with little service level improvement” says Nathan Bailey – a situation scarcely helped by the company’s

sion of small and medium sized unmanned air vehicles (uavs). UEL’s chief customers are the specialist plane-makers, whose own customers are the armed forces. With modern warfare changing out of all recognition, the success of uavs as target drones, one-trip lethal weapons and high-value surveillance-type craft has led to a sea-change in military leaders’ strategic thinking.There’s also a growing call for uavs for

EL has seen demand near-triple in under five years, yet little over a year ago and with increasing orders

putting massive pressure on spares availabi-lity, UEL was forced to realise that its inven-tory control and management processes were falling short of the mark and that its stock management was not all it could be.UEL are designers, developers and produ-cers of a range of high quality, lightweight Wankel-type rotary engines for the propul-

U

uel - where 100% availability saves lives

Lichfield firm responds to near-triple demand

Case study

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them into clear demand groups, the pro-gram calculates a sales forecast for up to a year ahead.

Focus on service levelsBased on the service level required and defined by logistic and purchasing para-meters including actual stock, minimum and economic order quantities, lead times and other factors, forward levels of safety stock and the future develop-ment of stock levels can be forecast – as a rule, to an exceptionally accurate degree. Establishing the true extent of UEL’s situ-ation became the immediate priority: the processes to significantly ramp-up inter-nal supply chain forecasting and inventory management in addition to improving

stumbled across Slim4 - Slimstock’s fore-casting and inventory management tool. Styled as the complete inventory planning solution, the program has a track record of reducing inventory levels by up to 30% while improving service levels. Nathan and his team discovered a meeting of minds when they quizzed Slimstock’s Coventry-based inventory management experts at a trade show in March last year: Within three months, Slim4 was instal-led, up-and-running, and making serious headway into heading-off UEL’s looming availability issues.“The decision to go with Slimstock and Slim4 was a gut feeling. It felt right and it’s proved to be just that. It’s taken us from a headache situation into one where availability is now close enough to 100% to make no difference – and where 100% availability saves lives. That’s a target worth aiming for.”

The benefits of Slim 4 are simple yet highly effective. Taking sales figures from the previous 24 months and classifying

own aggressive development programme that was attracting high-level attention from even more potential customers.

Erratic demand UEL’s was a classic supply chain mine-field: erratic demand, unpredictable main-tenance, random requirements, high-visibility customers demanding more and more material, over 24 weeks materials lead-times, and a problem-riddled order-by-order approach, hindered by lack of a workable forward-planning processing schedule. The writing was already on the wall: with high loads on UEL’s logistics capabilities, its reactive approach meant the company was struggling to keep pace, and all the pointers indicated that the company was on-course to become a victim of its own success with increased demand putting even more strain on its already-stretched systems.

Meeting of mindsIt was almost by chance the company

nathan bailey: ”The biggest single result for uel has been the critical enablement to identify

problems in advance: instead of untracked numbers of one-off purchase orders, uel now has a planned

purchasing strategy spread over 12 months.”

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external supply chain issues, supplier relia-bility and customer engagement.

Forecasting demandBased on actual demand between April 2005 and March 2007, SKUs running at around 3,000, and taking into account the actual and predicted demand for April and May of that year, the firm’s stock imbalance was quickly exposed. Slim4 highlighted many items of obsolete stock with 50% of the remainder classified as having ‘irregu-lar’ demand (significantly, actual demand in May that year proved to be precisely as forecast!).The first batch of results pointed to over-stocking of 48% of items, with a further 20% revealed as likely to go out of stock in a matter of weeks – an issue that clearly couldn’t be allowed to continue. Even assuming that outstanding purchase orders would arrive the next day, UEL’s ser-vice level was calculated at less than 80% - a startling factor that rapidly focused attention on the issues that needed straightening.

Working ScenariosSlim4 worked-out three potential working scenarios from the assembled data:

Scenario #1: providing a 35% inven-tory reduction within 12 months if levels remain constant at 80%Scenario #2: an 8% inventory reduction combined with service levels increase to 95%Scenario #3: 12% inventory reduction allied to 99% service level for all items with six or months’ demand and 80% for all irregular items.Within days of ‘go live’, Slim4 had effecti-vely demonstrated the shortcomings in the existing MRP system while delivering valu-able pointers on how best to balance stock for frequently-sold items as well as those for which demand amounted to one or two a year.

Stock benefitsThe clear benefits would be entirely as specified in the initial brief: clear map-ping of stock usage, forecast accuracy and purchasing efficiency, increased inventory control, and improved levels of service to customers.Value was also gained from categorisation of components, trend analysis, a switch to pro-active purchasing, reduced number of purchase orders, and a move to scheduled

ordering as opposed to one-offs. On top of that, by automating the planning pro-cess for all regular items – in UEL’s case, amounting to some 90% of all stock – more time could be devoted to managing exceptions and purchasing.

“Being small and relatively compact we’re able to make decisions on the fly. That, and a mutually positive outlook gave us the best grounding from which to pro-gress” said Nathan.

Implementation outcomesPrime among Slim4’s appeal proved to be its lightness and easy implementation to the company’s existing ERP software. At the same time, the process’ ease-of-use appealed to UEL’s philosophy of enabling a wide spread of its own people to use software.Slim4 proved light, right from the word ‘go’. From initial brief to full-scale imple-mentation was thirty days; not only that, but the data was good and available from day one, quickly demonstrating which items needed attention and input, and identifying the optimal ways to reduce current and obsolete stock.The biggest single result for UEL has been the ability to identify problems in advance: in place of untracked numbers of one-off purchase orders, UEL now has a planned purchasing strategy spread over 12 months.

Inventory levels remain at the same levels they were pre-Slim4, but with turnover three times up on what it was, the true impact of the program is brought into sharp focus.

Availability – no doubt to the relief of the front-line forces – is well into the high-90s, even keeping pace with the intro-duction of new engines. Not only that, but fact-finding assurance visits to the Lichfield plant by concerned representa-tives of the world’s foremost unmanned air vehicle makers have tailed off from at least one a month to zero. Largely thanks to Slim4.

‘the biggest single result for UeL has been the ability to identify problems in advance’

Case studySU

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erp vendors: adding value to erp

Market drives open integration strategytowards the end of the last century, just the thought of an interface would make ICt managers break out in a sweat. Linking different applications was often a long and complicated process. With every upgrade there was a risk that the interface would crash. thankfully, those days have long gone.

here was a time that ERP vendors made it very difficult to integrate other systems into their own software. If you wanted to connect an ERP system with any other software

application, the process would be time-consuming and complica-ted, and still not necessarily result in a successful outcome.

ERP vendors are more open to integration with other comple-mentary systems. This is a conscious choice. Today, ERP vendors recognise that add-on’s offer their users real value. Technically, integrating an add-on system to an ERP system is straight-forward. That’s why ERP vendors are keen to embrace other systems, whether that’s a telephone, a sales tool or an inventory system.

Microsoft Business Solutions – Adapt to user needsIntegration is a lot simpler thanks to modern technology. Micro-soft Business Solutions has extensive in-house expertise to ena-ble integration. Both Dynamics AX and Dynamics NAV use standard Microsoft technologies such as SQL database, Dotnet-components and Web services. “Our software has always been very open,” says Tim Wolff, Mar-keting and Strategy Manager at Microsoft Business Solutions. “That’s always been our aim. Our software should be really easy to adapt to the needs of our users. There are two ways that we do this. Firstly, by using our own internal software to make adjust-ments, and secondly, by connecting with third-party systems. That may involve an inventory optimization system such as

Slim4, a product data management system, a weighing system or AutoCAD.” Wolff adds “Businesses can use standard interfa-ces, which reduces the risk.”

SAP - Bank on open ERP vendors such as SAP, have realised that there’ll always be a need to connect to other systems. Besides, the ease of inte-grating ERP systems, it also provides them with a competitive advantage, ‘In the forty years that SAP has been around, our ERP system has developed into an almost complete end-to-end

ServIce-orIenTed archITecTure

Frequently used by software vendors, Service Oriented Architecture (SOA) enables certain elements, such as ERP applications, to be made available over the Internet – in the form of web services. These web services can be linked together, effectively creating a new process. This includes using the functionality across various applications. Including applications used by other companies. For example, an online retailer being able to source product information directly from the supplier’s catalogue. Web services can also be used to connect various applications to one another. Microsoft, SAP and Oracle provide tools that enable applications to be integrated via SOA.

T

technology

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solution covering a wide range of processes: sales, production, logistics, finance, you name it’, says Hans Kroes, Industry Head at SAP in The Netherlands. “Our users may want to restructure the process, or automate the process in a different way, such as implementing a niche-application. Say, they wanted to control production machinery. That would by definition require a speci-alist application. SAP decided therefore not to offer a standard solution. It’s essential that we offer an open interface from the ERP system in these circumstances.”SAP has its own integration and application platform called SAP NetWeaver. Not only does the platform support all SAP applica-tions, it is also enables integration with other applications. Inte-gration with ERP can happen in two ways: either a direct connec-tion with SAP’s ERP system, or by connecting with the Process Integration (PI) layer, SAPs middleware solution. If a niche appli-cation shows potential, SAP would develop the software them-selves. SAP partners also play an important role in this process. Applications that are further removed from SAP are integrated via the PI layer. What happens, is that messages are exchanged - in real-time or asynchronously - between the applications and SAP on a central platform, using a one or other standard mes-sage format. “Previously, third party integration took place on a project-basis. We’ve since gained greater control over integration certification, and thereby made it re-usable,” says Kroes.

HSO – Focus on wholesaleHSO, an important Microsoft Dynamics partner, specialise in the ERP system, Dynamics AX. “We focus on wholesale, and as a result found that the same questions and problems kept crop-ping up. We solved this with the HSO Business Platform for Wholesale”, says Steve Pooler, Salesmanger HSO Enterprise Solutions.If some functionality is missing from the standard AX version, which is of interest to several trade customers, then there are a couple of things we can do to meet the needs of that particular industry. We can develop the software component ourselves, or

interface to a niche application that provides the missing functio-nality. An example of this is Slimstock’s Slim4 inventory optimi-zation system. HSO offers a standard interface between AX2009 and Slim4. As a result, both parties benefit. “There are wholesa-lers that derive significant added value from the Slim4 functiona-lity. We come across wholesalers that are already using Slim4. An overriding requirement in delivering Dynamics AX, is proving that we can interface with the system. That speaks for itself. The interface is used by many of our wholesale customers”, Hoogen-raad states.

Oracle - Additional Software LayerBeing open is an important part of Oracle’s strategy, which can best be described in three words: complete, open and integrated. “By complete we mean that our software portfolio’s so wide that there’s no need to integrate with a niche-application. However, we don’t want to restrict our customers. When they choose to interface to another system, we provide an open system for them to do that”, says Jeroen Heijmans, Sales Consulting Director at Oracle. The traditional way of integrating is point-to-point. Between elements of the ERP system and the niche application, making direct connections, as it were. “The disadvantage with an ERP upgrade is ensuring all points of integration work correctly”, says Alex Haijen, Oracle Solutions Architect. Haijen calls for the use of an enterprise applications integration platform (EAI), such as Oracle’s own Fusion Middleware. This is largely based on the technology acquired when BEA Systems came on board two years ago. Fusion Middleware is in fact an additional software layer between the ERP system and niche applications. The ERP system only needs to be connected once to this software layer. Thereafter, you can integrate as many niche-applications as you like, simply by integrating it with the software layer. “You don’t need to build an interface from scratch for each new niche appli-cation. In the long run, it’s the best option in terms of the total cost of ownership”, says Haijen.

‘there’s no need to build an interface from scratch for every new niche-application.’

Tim wolff, microsoft business Solutions marketing and Strategy manager: ‘Quite simply, our software must adapt to the needs of our users.’

hans kroes, Sap Industry head: ‘previously, integration was project-based.’

Steve pooler, Salesmanager hSo enterprise Solutions.

Jeroen heijmans, erp oracle benelux Sales consulting director: ‘we don’t want to restrict our customers’.

users reveal why they chose Slim 4

“erp on its own doesn’t cut the mustard”

abory – Improve service levels “Slim4 gives us this time”Fabory, a specialist supplier of adap-

tors, had used the SAP ERP system to manage their inventory for a long time. However, weren’t happy with the solution. SAP was too complex, too opaque and required too much customization. Thanks to Slim4, inventory management is now a lot easier. Inventory managers are confi-dent that the system will automatically use the right forecasting method. ‘Manage-ment by exception’ working allows them to concentrate on the real issues far ear-lier. Thanks to Slim4, Fabory can operate decisively.Less than a month after commissioning Slim 4, Supply Chain Director Maurice

Geerars saw the first results in the central distribution center. “The system showed us that we were overstocked by 6.5 million euros. At the same time it was increasing our B and C inventory by 2.5 million. In theory, that provided potential savings of 4 million euros.” In practice Geerars doesn’t measure the drop in the actual inventory in the first year. That isn’t the goal. “The most important thing is to improve our service levels in the B and C categories without increasing the total inventory. Our service levels are around 96 percent, and needs to run at 98 percent.”

Inventory management is now simpler thanks to Slim4. Fabory says it has hel-ped them to shift focus to other parts of

the chain. They have stock locations in the Czech Republic, Romania, Portugal, Uni-ted States and Canada - all supplied from Tilburg. “If we have a shortfall in Tilburg, and the Czech Republic is overstocked, we place an order. Instead, we should get the Czech overstock back. This must change,” says Geerars. “To introduce supply chain thinking to our planners, we need to free up some time. Slim4 gives us this time.”

Wheeler - More transparency“The ability to generate accurate fore-casts allows us to operate dynamically” Van Leeuwen Wheeler in the UK were critical of SAPs limitations in the area of forecasting. The forecasts were based on the top 50 items in each product group,

Slim4 is a good example of an eRP add-on. this inventory management system is used by hundreds of companies in the UK and europe. the system interfaces with eRP systems from all major suppliers, including Microsoft Business Solutions, SAP, oracle and Infor. tim Wolff Microsoft Business Solutions explains: “We work with partners who specialise in distribution, manufacturing and retail, such as HSo, GAC, Qurius, Centric and Pulse. So far, over twenty customers have successfully integrated Slim4.” vendors such as exact and Unit 4 Agresso are also working closely with Slimstock – successfully integrating their specialist solutions with Slim4.

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supported by an Excel spreadsheet. The forecast process took a week to complete. “We were looking at figures from the past seven days to figure out what we’d need the following three to four weeks,” explains Van Leeuwen Wheeler commer-cial manager, Dave Jenkins. “Not only was it a time consuming process, it didn’t pro-vide the accuracy we needed. If we conti-nued on that track, we’d run the risk that our service levels would go down and tur-naround time would increase.”During the recession Van Leeuwen Whee-ler felt the need for change. “Many of our customers were reducing their own stock levels. With the result, they were looking to us to cut lead times, to ensure their deadlines weren’t at risk.” Van Leeuwen

Wheeler implemented Slim4 in conjunc-tion with SAP. The most important advan-tage: transparency “The ability to generate accurate forecasts allows us to operate dynamically.”Implementing Slim4 led to a reduction in inventory of 40 percent – significantly more than the targeted 25 percent. The system also offers better opportunities to recognize seasonal patterns and identify dead stock. “Slim4 enables us to be pro-active in meeting the needs of a changing market, instead of a reactive response,” concludes Jenkins.

Van Ommen – Strong growth“This system provides the support and integrates well with AX.”

A supplier of cutting tools, Van Ommen has experienced several years of strong growth - reporting a fifteen percent growth in turnover every year. A major reason for the growth is undoubtedly the range. Van Ommen has 18,000 items in stock. “If we do not have an item in stock, nobody else has,” said David Whitehead, Van Ommen purchasing and logistics manager.The growth prompted Van Ommen to do more in the area of inventory manage-ment. They wanted greater visibility of stock and customer order patterns. “That was the only way to manage the targeted growth. We wanted to improve our ability to anticipate.”Dynamics AX, the ERP system from Microsoft Business Solutions didn’t offer

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sufficient opportunities. “To have a good inventory system, you need a system that provides good demand planning and fore-casting. AX is an excellent ERP package, however the system isn’t forward looking, and offers very little support in calcula-ting stock parameters,” says Whitehead. He found that solution in the inventory optimization system, Slim4. “This system provides the support and integrates well with AX.”“Our margins had to be right first time” According to Whitehead, the system is particularly strong in ‘management by exception’. “When demand hardly dif-fers from the forecast, there’s no need to spend time and energy on it. We’re now able to optimize our time and divide our attention. We didn’t have to wait long for results. Within a year of commissioning Slim4, service levels increased from 94 to 98.5 percent, and turnover increased by 20 percent. That means we get more out of the Euros on the shelf.”

Halfords - Increased efficiencyHalfords, a specialist supplier of bikes, bicycle and car accessories also discovered that the ERP system from Microsoft offe-

red insufficient opportunities for demand planning and inventory optimization. “That’s why we mapped what was availa-ble in the software market for inventory control in retail. There are several provi-ders, but few of them have experience in retail, including one well-designed pac-kage,” says William Marcelissen, Half-ords general manager.With Slim4, Slimstock had experience in retail. “We received positive feed-back from associate companies that had already introduced Slim4. Even Microsoft said that we were in good hands. We have a rigorous partner selection. Our margins had to be right first time,” says Marcelis-sen.Halfords used Slim4 to not only stock the central distribution centre, but to com-plement the store stocks. Successfully! In the first ten pilot stores they soon saw that sales had increased more than in the other stores. They reduced the number of gaps without the need for additional sup-ply.” Slim4 is now used to stock all their stores.

NRF – Fewer container shipments“We can now target service levels” NRF, a radiator and air conditioning sup-plier, deployed Slim4 at eleven locations. They have sales offices with their own stock throughout Europe, “The stock levels in the eleven sites were high - very high. The question is whether orders pla-ced by local sales managers were really needed. Many items came back a year later because they weren’t sold,” says Patrick van Hoek.The first step, to give us a better under-standing, was to implement a single method of working and to use the same ERP system across all sites. Dynamics AX provided this. The second step was to centralize inventory. That didn’t work with Dynamics AX. “We constantly had to adjust the parameters by hand. We wan-ted to get away from that,” says Pegg.Within four months they had changed to Slim4. Thereafter, Dynamics AX and Slim4 were introduced simultaneously in one sales office after the other. Thanks to Slim4, they reduced the supply of raw

material to their factory in Mill by 20 percent. In addition, increased the avai-lability of commodities from 88 to 95 percent, and decreased the amount of obsolete inventory. Slim4 also enables logistics to be organized more efficien-tly. “If we have a shipment from Asia, Slim4 tells us what else will be needed in the coming weeks – to fill the contai-ner. This avoids the need for another container a week later.”The most important advantage is transparency. “We know where we have too much stock and where we’re perfor-ming above or below standard. We can now target service levels. That concept didn’t exist beforehand.”

Coulisse – Management by excep-tion“We can actively manage the chain” Coulisse, a window dressing supplier, has delivered strong results using Slim4 combined with Dynamics NAV, an ERP package from Microsoft. The company has generated 40 percent more revenue with the same staff, in the same time, without any more capital. “Without these tools it would be irresponsible to grow so fast,” says Harco Evers Coulisse, who saw the range increase by 30 percent in recent years.Coulisse says inventory is anything but simple. Many of the items come from the Far East. To achieve a high level of service, it’s necessary to take control of purchases. “That’s why we introduced Slim4. We’ve noted that we’re working more efficiently, have better visibility and better control at the top. The value of the purchase has gone down, the stock in ‘wrong’ items has disappeared and the turnover has risen by 25 percent.”

Slim4 has given us breathing space, in part because of ‘management by exception’. Another advantage is that Slim4 provides better and faster management informa-tion. “By keeping our suppliers infor-med about our planned purchases, we can actively manage the chain. We want to plan what they make. The aim: sound container planning.”

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graham demand accurate supplier kpIs

plumbers merchant gets suppliers to work smarterthe Graham Group, a leading UK plumbing, heating and sanitary-ware merchant identified that electronic trading could make a significant difference to the way in which they operate.

raham used a manual branch ordering process involving faxing purchase orders to suppliers, which was time-consu-ming and prone to errors and delays. This meant the com-

pany didn’t have visibility of the fulfilment of supplier orders, and chased progress by telephone. Unrealistic delivery times were being set on outbound purchase orders due to the lack of accurate supplier lead time and delivery calendar information.

As a result they didn’t have accurate supplier delivery performance information, only the information sourced from suppliers, resul-ting in a disjointed, manual and costly process.

Get suppliers to work smarterGraham made it a major business objective to improve the effi-ciency and effectiveness of their supply chain, by getting all of their suppliers to work ‘smarter’. The Internet was identified as the ideal mechanism to share common real-time information with their suppliers and increase profitability by reducing cost and waste. Graham implemented Wesupply’s On Demand Electronic Tra-ding Solution, via a OneTime™ connection across the group to electronically connect its 250 branches and 130 suppliers. The solution established an electronic supply network linking remote business systems across branches and suppliers ena-bling the delivery of its five key transactions; Purchase Orders, Invoices, Order acknowledgements, Advance Shipment Notices and Goods Receipt Notes.Wesupply’s OneTime™ architecture offered an immediate means of rapidly integrating delivery mechanisms, applications, message formats and mobile devices across the Graham Group and its suppliers. The solution provided a cost-effective, effi-cient, intelligent and embracing method of electronic message delivery between all branches and suppliers, using any common format.“The solution enables us to manage our supply network with alerting and analysis intelligence including spend, order excep-

tion, shipment performance and On Time & In Full Perfor-mance analysis,” explained Patrick Guest, Marketing Director, The Graham Group.

Improved branch and supplier visibilityAs a result of implementing Wesupply’s On Demand Electronic Trading solution, Graham is the only UK merchant to offer sup-pliers a choice of connection. Over 230 branches are connected to Wesupply and 130 of its preferred suppliers. Nearly 400,000 orders and 2,000,000 order lines are processed electronically though the system. This is equal to 96% of total order volume, which has sig-nificantly reduced manual effort. Branch and supplier visibility has significantly improved due to transactions taking place across the network. Monitoring and alerting is now available on key fulfilment events such as late and non acknowledgement of orders, supplier exceptions, late or non shipment of orders, and receipt exceptions.The solution enables Graham to manage its supply network and analyse supplier performance. All suppliers are now measured, ena-bling Graham to produce supplier league tables. Overall supplier On Time & In Full performance has also improved by 23%.

Case study

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Wesupply is a market-leading electronic trading company that ena-bles companies to exchange data efficiently and effectively. Wesup-ply provides a fully managed and outsourced electronic business-to-business integration service, using a unique approach that maximi-ses supply chain collaboration between independent organisations. Wesupply’s next generation electronic trading solutions leverage all the connectivity advantages of the Web to provide a common platform for trading partners of all sizes to link-up in a secure, reliable and robust environment. Companies across all industries, including Retail, Building, CPG, Energy and Manufacturing rely on Wesupply to manage business-critical information flows for their extended supply chain processes.

For more information please contact:info@wesupply.com / +44 (0)845 643 6600

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p u t S C o n C e p t o f d y n A m i C i n v e n t o ry o n t h e m A p

SLIMStoCK RetAIL WINS Ing 2010 retail award

Slimstock retail was crowned the winner of the Ing retail award for the year 2010 in the category best retail excellence Idea. “This is a huge step forward in helping to put the concept of dynamic inven-tory on the map,” says peter bocken of Slimstock retail.

The ING Retail Annual Retail Excellence Award for Best idea is for the supplier with the most relevant new product or service for retail. The winning product or service must meet the following criteria: the product or service should contribute to the efficiency and / or effectiveness in the retail organization, it should be a proven concept, and it must be deployed widely across all sectors.

Slimstock was announced as the winner during the ING Retail Annual Retail Excellence Award Event. One of the main reasons for choosing Slimstock Retail is that the concept has proved to be successful.

“You can call any of our customers - all are enthusiastic,” says Peter Bocken. “This award is a huge boost in helping to put the concept of dynamic inventory on the retail map. This award is proof that the Slim4 package that we’ve developed in recent years is ideal for complex environments such as retail. The jury agrees that the product is unique and proven to be successful. We are extremely proud.”

The ING Annual Retail Award is a very prestigious annual event that everyone in the retail community looks forward to. Each year, awards are chosen by both a professional jury and public-nominated awards for the best store and best independent store in the Netherlands. Previous winners include Rituals, Jumbo Supermarkets and Hema.

Slimstock Retail: get the right stock to the right store at the right time Slimstock Retail, part of Slimstock, is the provider of the Slim4 inventory optimization system. Slim4 is not only used to optimize inventory within distribution, it also automates the process of stocking retail stores. Every day the optimal inventory level is calculated by forecasting per item and per location. As a result, the order process is spot-on and the right stock is in the right store at the right time.

Slimstock Retail’s clients include Blokker, Sligro, Quantum, Schiphol, Prenatal, Xenos, DA Retail and Halfords. Peter Bocken, managing director of Slimstock Retail adds “Slim4has incredible potential. Our philosophy is that a dynamic environment needs to be controlled by a dynamic inventory model, which leads to maximum turnover using the minimum capital. This approach has been very well received. Furthermore, everyone in Slimstock Retail has at least a year’s stock management experience with a large retailer. Because of this we know what’s happening, and together with our clients can think that bit smarter.”

peter bocken en Stefan kooijmans from Slimstock retail.

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as a supply chain director, you’ll constantly want to know how effectively your working capital is being used without getting lost in the detail of complicated programmes.

A handy new tool from Slimstock will give you the answers you need – quickly. The Capital Performance Monitor is a dash-board that allows managers to get a status update – of say stock availability - every moment of the day.The Capital Performance Monitor is a miniature version of the Slim4 dashboard. It allows operational managers or directors to see the actual stock levels, the number of stock days, the availability, and the amount of overstock - on their screens. This infor-mation is obtained from the Slim4 inven-

tory management system. The dashboard is available as a single tool: a mini-application that is constantly available on the PC desk-top and thereby quickly provides precise information. If one of the KPIs needs to be investigated, the insight-tool can be opened in one click. A number of measures and graphics will allow you to instantly see where there’s inadequate availability and where stock can be reduced. The tool gives directors fast insight. To gain further understanding and to find a solution, they’ll need to talk to the stock planners – who have the same infor-mation and can scrutinize Slim4 to esta-blish the underlying reasons. As a result, Slimstock helps to bridge the gap between top management and operations.

The Capital Performance Monitor is availa-ble now and has already been implemented by Slimstock clients. The tool is fully inte-grated with Slim4.

tools & technology

Directors: Gain fast stock-insight

real-TIme operaTIonS

10 million items per hourSlimstock is improving the speed of Slim4. Thanks to the use of new techno-logy it will soon be possible to process more than 200,000 Skus per minute.

The larger a company’s range, the more computing power is required by Slim4 to process each advice order. And if the stock is distributed across a number of stock locations, the need for computing power is multiplied. For example, retailers who use Slim4 to replenish their stores, pharmaceutical wholesalers who need to stock pharmacies, or technology wholesalers with a distributed network of stores.

Thanks to the application of new technology, Slimstock is dramatically incre-asing Slim4’s operating speed. The secret lies in the optimization of the ser-ver processors that Slim4 runs on. The use of blade technology has made it possible to use processors far more efficiently. As a result, Slim4 can process more than 200,000 items per minute. That is more than 10 million SKUs per hour. These faster speeds enable inventory planners to plan scenarios in vir-tually real-time and to work out alternatives. For companies that have a large number of SKUs, computing capacity will no longer be the cause of a bottle-neck when using Slim4. This fast version of Slim4 will be available in 2011.

buSIneSS InTellIgence

web-verSIon

Remote inventory managementnot everyone who inputs into the stock opti-mization process is office-based. Slimstock has therefore anounced it’s first steps towards a web-version of Slim4 to meet the needs of remote-workers.

When it comes to planning optimal stock levels, the sales forecast is critically impor-tant. The same counts for the planning of promotions and the introduction of new items. As a result, stock planners depend on the input of others, such as marketing. However, there is a high likelihood that these people will be on the road or based elsewhere. That’s why Slimstock have deve-loped a web version of Slim4. Users now only need a web browser and internet con-nection - via a laptop for example – to access Slim4 and provide their input. Of course, they can access to all the relevant data and reports they need on Slim4 the same way.

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A3 day course in Stock Optimisation is designed for compa-nies that have a desire to develop internal capabilities. The course is very practical in design and utilises different busi-

ness cases, all real life, brought in by the participants themsel-ves. Together with the trainers and other participants, the com-panies internal performace will be assessed and subsequently, the outline of a plan for further improvement will be created. Every training day will be summarised by all participants, toge-ther with all the lessons learned.This course is an ideal approach to develop an improvement plan for your own organisation in a very short timeframe. The possibility to exchange and share information with people with similar responsibilities in quite different environments bring enormous extra added value.

Opportunity AssesmentThrough a so called opportunity assessment, companies get a detailed insight into the opportunity for improvement within their own organisation. The focus is on quantitative analysis of the inventory situation, making clear the effects that stock reduc-tion might have on service level and operational costs. The data analysis makes use of Slimstock software – both ABC and Slim4.

The key focus areas for this assessment are:- Improving the product range management- Improving and actualising the master data in the systems- designing the right decision rules for stock optimisation- scenario planning and differentiating service levels- set up co-operations in the supply chain, both with customers

and suppliers

Based on this Opportunity assessment, the company can actually make their improvement plans work!

Slimtock academy

training and advice enable visibility of improvement opportunityStock optimisation is a complex activity. take a closer look at all the different interests that play a role in stock optimisation: finance wanting to lower working capital, sales asking for higher availability and the supply chain department tying to lower operational costs. the Slimstock Academy supplies different programmes to help organisations be successful in improving their inventory management. Not only by improving know how and capabilities, but also through analysing and reporting on business improvement potential.

The optimum product range is in place

Inventory data is reliable

The master data is correct

The right rules for inventory control are used in addition to accurate process parameters

Prior to decisions being made, collaboration with customers and suppliers must take place to ensure:

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“Good news... the recession is over!”

O

events

From 13th to 16th october 2010 over 150 senior logistics & supply chain professionals and industry solution providers joined together on board the P&o Cruise liner Arcadia to debate the burning issues of the day, forge new partnerships and develop personal networks.

ver the course of the 3 nights and 2 days they participa-ted in over 1500 pre-selected and pre-scheduled meetings, attended numerous conference sessions and developed

both their personal and business knowledge.

“Good news… the recession is over!” The bad news, HSBC’s chief economist Dennis Turner, was quick to admit, is that economists are divided about where we go from here. Pessimists still see possibilities for double-dip recession, but in a lively and entertaining can-ter through current trends and opinions on the global and UK outlook, he explained why he was one of the optimists. In summary? Expect the recession to be a U shape and then hope we can apply a new agenda to the British economy, emp-hasising a better spread of activity, less reliance on one or two key sectors (like financial services and retail) and look at both investment and exporting to shift the balance. On the day before, Jaguar Land Rover announced a £5bn investment in Midlands manufacturing – which remains a key, if overlooked, part of the UK economy – his words look both prescient and justifiably optimistic.As well as the keynote speakers, including Sir Clive Woodward, there were career development presentations covering a variety of topics including leadership, customer relationship manage-ment, performance and productivity as well as how to master the power of storytelling.

Industry sessions focused on a broad number of subjects explo-ring how supply chain managers can learn to talk finance, why poor data can cost businesses millions of pounds, how we can provide energy for the future as well as the management of the supply chain through the uncertainty of the economic recovery and how waste can be reduced and recycled to provide energy.

the Logistics & supply Chain Forum 2010

In addition to these topical subjects there were sessions on alig-ning marketing with the supply chain, how electric vehicles can benefit the supply chain and how true visibility and transpa-rency across the total supply chain can be achieved by adopting a culture change using web based technology. A presentation was also delivered on the results of a recent survey on supply chain and the board room. The survey, with responses from over 170 senior global supply chain professionals, focused on how supply chain strategy is developed and implemented.

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fast-forward your new business developmentby reaching senior of Logistics and Supply Chain professionals

The logistics & Supply chain forumon board m.v. aurora

over 100 Delegates will be on boardUp to 44 meetings with senior logistics and supply chain executives over 2 days and 3 nightsFully inclusive Conference ProgrammeSailing from Southampton (UK) to Guernsey, 12th -15th october 2011

you get…

•Detailed profiles of each delegate you meet and their logistics requirements.

•You select which delegates you wish to meet for half hour or 20 minute 1-on-1 meetings / meal times.

•You can offer a topic to present at the conference – the most popular sessions will run.

•Highly focussed audience – pre-qualified decision makers, by invitation only.

•An interesting and dynamic conference program-me, presented by key industry professionals.

•Luxurious environments for business development with plenty of free time for networking.

•Packages include accommodation and all meals.

for further Information, please contact Grant Townshend +44 (0)7720 814174 gtownshend@richmondevents.com

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