Increasing Cash Flow in Any EconomyIncreasing Cash Flow in Any Economy
More than 20 Years
Specializing in Advanced
Inventory Planning & Optimization
The Largest
SAP Business One Partner in
North America
Increasing Cash Flow in Any Economy
Inventory Optimization and Advanced Planning from Valogix and SAP Business One
Increasing Cash Flow in Any Economy
Inventory Optimization and Advanced Planning from Valogix and SAP Business One
Thank you for attending
“Increasing cash flow in any economy”
• Please join the audio portion, the telephone number to which is listed on the bottom right panel of the Go-to-meeting screen.
• If you haven’t done so, please follow instructions for muting your line so that all participants can hear the presentation.
We will begin shortly
Increasing Cash Flow in Any EconomyIncreasing Cash Flow in Any Economy
More than 20 Years
Specializing in Advanced
Inventory Planning & Optimization
The Largest
SAP Business One Partner in
North America
Increasing Cash Flow in Any Economy
Inventory Optimization and Advanced Planning from Valogix and SAP Business One
Increasing Cash Flow in Any Economy
Inventory Optimization and Advanced Planning from Valogix and SAP Business One
Most important messages in this session
1. Waiting for things to get better is not a strategy for success
2. You may be sitting on a line of credit right in you r warehouse
3. Getting at it is a lot easier than you might think
4. You can create your own stimulus package… NOW!
About Valogix…
�FOCUS on Stock Planning Solutions� Free up cash
� Increase sales
� Improve customer service
�Award winning SAP Partner
�Located in 22 Countries
Representing Over 30 Micro-Vertical MarketsRepresenting Over 30 Micro-Vertical Markets
Retail
• Durable • Non-Durable
Wholesale Distribution
• Commercial • Industrial • Retail
Where can we be found: Customer Industries
Aftermarket Service and MRO
• Aviation Aftermarket• Service Companies• Repair Organizations; B2B & B2C• Plants & Facilities• Hospitals, Schools, Office Buildings
Manufacturing & Assembly
• Durable Goods• Discrete Manufacturing
The Valogix Solution Overview
One Business. One “Best-Fit” Solution
Services
Executive
Operations
Sales
Finance E-commerce
� A single appearing system to streamline the entire business
� Instant and complete business information
� Proven tools to help accelerate growth
� Adaptable to many business and industry needs
� Designed specifically for small and mid-size businesses
VALOGIX®
Advantage
Small BusinessStarterEdition
VALOGIX®
Standard
Forecasting Planning & Optimization Edition
VALOGIX®
Professional
Advanced Planning Features Edition
Bu
sin
ess
In
tell
ige
nce
Technology Platform
SAP Business One Platform
Finance & Accounting Customer Management Operations
We
b To
ols
A great time to focus on your inventory
When the Economy is tough…� Costs are rising every day
� Surplus stock is growing
� Cash flow is tight and getting tighter
� AR-days-outstanding are growing
� Capital is scarce and getting harder to find
What if you could. . . � Uncover an untapped line of credit
� Establish where inventory is at risk of surplus or being obsolete
� Find money in the warehouse
� Work efficiently and smarter in the process
� Benefit from a Return on Investment (ROI) measured in weeks not years
Q1
Q32010
Have Economic Conditions Left You With
Surplus Stock?
As demand decreases, stock surpluses rise � Finished Goods 20%
� Assemble Material 25%
� Manufacturing Goods 35%
� Raw Materials 15%
� Committed Contracts 18%
� Labor Surpluses 10% ��������������
� Reduction of inventory is now key to free up cash
� Simply getting rid of 10 % or 20% or 30% of invento ry could do more harm than good
� How do you know what to get rid of without loosing future sales?
� Do you have the tools to take the right actions?
Inventory Management Challenges
� Recognizing “Demand variability”
� Continual growth of new SKU’s
� Difficulty in setting and maintaining accurate stocking levels
� Dealing with critical “Stock-outs”
� Low inventory turns� Low inventory turns
� Excess and obsolete inventory
� No ability to easily forecast more accurately
� Wrong mix of in-stock items
� Complexity in determining how much to order, when to order, and where to stock it
Today’s Systems Don’t Go Far Enough
2.00
3.00
4.00
5.00
6.00
7.00
8.00
Max
Min
� Most ERP solutions require setting min/max levels for each item
� This is time consuming and often just a rough estimate
0.00
1.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Forecasts Can Vary Greatly From Actual Sales
2.00
3.00
4.00
5.00
6.00
7.00
8.00
Max
Actual
Forecast
Min
This leads to two primary problems
� Over-stocking, which ties up cash, inhibiting growth and investment in other things
� Under-stocking, which causes lost sales and increased shipping costs
0.00
1.00
2.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
With Proper Tools Comes Success
3.00
4.00
5.00
6.00
7.00
8.00
Max
Actual
Valogix SQ
Min
� Valogix SQ allows customer to safely reduce stock – and meet customer demand when and where it is needed
0.00
1.00
2.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Reorder PointValogix Generated
Stocking
Max Inventory Level ManagedInventory
Reduction Anticipated Increase
What Valogix Does
0
Reorder Point Stocking Quantity
Safety Stock
Demand Cycle
Accelerating Demand Cycle
Diminishing Demand Cycle
Constantly reevaluating so you don’t have to…
RESULTS
RESULTS
RESULTSHistorical
Sales DataHistorical
Sales DataValogix ADAPT Engine
Analytical – Dynamic – Adaptive - Predictive Valogix ADAPT Engine
Analytical – Dynamic – Adaptive - Predictive
Qualifier Algorithm & ForecastingQualifier Algorithm & Forecasting• Analyzes History• Selects Algorithm• Displays which algorithm was selected
Qualifier Algorithm & ForecastingQualifier Algorithm & Forecasting• Analyzes History• Selects Algorithm• Displays which algorithm was selected
Optimization & RationalizationOptimization & Rationalization•System rationalize inventory mix•Sets optimal Stocking Quantity (SQ)
Optimization & RationalizationOptimization & Rationalization•System rationalize inventory mix•Sets optimal Stocking Quantity (SQ)
Data Synchronization
Valogix Database
Data SynchronizationData Synchronization
Valogix DatabaseValogix Database
• High Moving• Slow Moving• Random Demand• Seasonality
Valogix Planning Engine - Internal Process Flow
Inventory AnalysisInventory Analysis• System checks inventory position versus SQ• Determines items needing replenishment• Analyzes Excess and Inactive stock
Inventory AnalysisInventory Analysis• System checks inventory position versus SQ• Determines items needing replenishment• Analyzes Excess and Inactive stock
ReplenishmentReplenishment• Creates Shortage & Excess Plans/Reports• Sends POs, Transfers, Word Orders back
ReplenishmentReplenishment• Creates Shortage & Excess Plans/Reports• Sends POs, Transfers, Word Orders back
Business System DatabaseBusiness System DatabaseBusiness System Database
• New Buy• Transfers• Production• Repairs
Automated System Process• Inventory Optimization• Overstock analysis• Spike Demand analysis• Replenishment planning• Order approval/placement• Exchange curve analysis• Exception Management
• Active • Excess• Obsolete• Shortage
Analytical Analytical �� Dynamic Dynamic �� Adaptive Adaptive �� PredictivePredictive
VALOGIXVALOGIX®® AADAPT TechnologyDAPT Technology
Planning Horizon = Supplier Lead Time + Planning Frequency
Planning Frequency = how frequent you place purchase orders or replenish sub-locations. Typically daily (1 day) or weekly (7 days).
Note: Planning Horizon can vary by item (or in the case of multiple locations by
The science of Inventory Planning focuses on ‘spikes’ – how high could demand go.
First establish the period of time over which inventory (on hand and on order) must be sufficient to support customer demand & business goals.
The Valogix Approach – Establish SQ
Note: Planning Horizon can vary by item (or in the case of multiple locations by item/location)
Supplier Lead Time
Planning Frequency
Planning HorizonExample: Vendor Lead Time = 30 DaysPlanning Frequency + 7 Day
Planning Horizon = 37 Days
weeks
80
100
90
80
100
90
Optimization Exchange Curve
As Service Levels increase Inventory costs grow rapidly..
InventoryRequirement
DesiredService Level
91 80%
Sample Results
ServiceLevel (%)
00 50 100 150 200 250 300 350
Stocking Quantity
20
40
60
107
ServiceLevel (%)
00 50 100 150 200 250 300 350
Stocking Quantity
20
40
60
107
Exchange curve of service level vs. stocking quantity. In the example, a stocking quantity of 107 is needed to meet the desired service level of 90%.
17
107 90%
128 95%
166 98%
Starting with a dynamic rolling forecast, now we can layer over the Planning Horizon and Safely Stock/Fill Rate to determine the correct level of stock we should be carrying.
Established SQ…Replenishment or Surplus?
90%
Planning Horizon120 Days
ServiceLevel (%)
00 50 100 150 200 250 300 350
Stocking Quantity
20
40
60
80
100
90
107
ServiceLevel (%)
00 50 100 150 200 250 300 350
Stocking Quantity
20
40
60
80
100
90
107
Service Level SQ Suggested level is Morethen what's on the self? : Replenishment
• POs•Make•Transfer
SQ Suggested Level is Less95%
Rolling Dynamic Valogix Forecast
Planning Horizon
Service Level
SQ
Valogix Forecast
Jan Feb March April May June July Aug Sept Oct
120 95 78 65 62 57 69 78 98 137
90 40
358 358
90%80%
Lead Time90 Days
OrderFrequency30 Days
SQ
SQ Suggested Level is Lessthen what's on the self? : Surplus Mounting
• Surplus Inventory •Obsolete Inventory 358
ForecastedDemand
over PlanningHorizon
150Dynamic
SafetyStock
Product Demonstration
Rapid value deliveryRapid value delivery
in action.
ADDITIONAL BENEFITSSAP Business One customers can receive
SAP Business One MRP
� Requires user to manually maintain stocking quantities (required, minimum, maximum)
� Requires manual development and entry of forecasts (if desired for planning purposes)
� Does not properly restrict supply and demand in multiple warehouse environments
� Does not suggest Stock Transfers in Distribution Center environments
� Does not create a single purchase order per supplier covering multiple warehouses
� Minimum order quantities are not considered for past due requirements
Eliminates the need to maintain Required, Minimum and Maximum levels in SAP Business One.
Valogix Enhances MRP Functionality
Valogix Enhances MRP Functionality
� Automatically plans for all locations simultaneously
� Single purchase order for each supplier
� Consolidate requirements for all locations
� Plan for freight minimums
� Initiate inventory transfers for items replenished from Distribution Centers
� Issue production orders for multiple warehouses
Eliminates the need to enter a manual forecasts into the MRP module.
Valogix Enhances MRP Functionality
� 12 month forecast is automatically created for every item at every location
� Use up to 48 months of sales history
� Automatically selects forecasting algorithm based on historical demand pattern
� Seasonal
� Slow moving
� Fast moving
� Random
Selecting a warehouse within an MRP scenario only affects the initial quantities, it will not create a restriction for the other supply and demand inputs from other warehouses.
Valogix Enhances MRP Functionality
Real Value Delivered
-12% Expedited shipments
-15% Reduced Stock-Outs +15% Increased Sales & Services
Reductions &Savings
Increased Efficiency Sales, Processes, Customer
Service
-22% Inventory Investment
-80% Planning Time
+12% Purchasing Efficiencies
+5% Productivity Gains
The Bottom Line: we help improve positive cash flow
What is This Worth to You?
If your inventory
value is…
Average
Reduction
Total
Inventory
Reduction
Monthly
Savings*
$500,000 20% $100,000 $1,583
$800,000 20% $160,000 $2,533
$1,500,000 20% $300,000 $4,750
$5,000,000 20% $1,000,000 $15,833
Decrease�� Inventory CostsInventory Costs�� Shipments�� LLost Sales
Increase Increase �� First-time Order Fulfillment �� Competitive Price Position�� Response time
* - monthly savings (19% of total inventory reduction) is a combination of reduced cost of money, insurance, warehouse cost, personnel, etc.
$5,000,000 20% $1,000,000 $15,833
$15,000,000 20% $3,000,000 $47,500
$50,000,000 20% $10,000,000 $158,333
What You Learned in this Session
1. Waiting for things to get better is not a strategy for success
2. You may be sitting on a line of credit right your w arehouse
3. Getting at it is a lot easier than you might think
4. An investment today can pay off in as quickly as fo ur months
Can You Benefit from Valogix? Yes, if You…
�Have inventory� Any business with inventory can benefit
– One customer has 65 items; another has 100,000 items.
– Typical: 500+ SKU
�Use multiple locations or multiple replenishment opt ions� Supports dozens of locations (including trunk stock)
� Purchase order, production order, transfer between locations � Purchase order, production order, transfer between locations
�Manage import containers� Take advantage of vendor discounts
�Have a goal to reduce inventory levels� Free up cash
– Exact location, date an item is needed
SPECIAL OFFER TO YOU!
Don't Miss Out: Purchase by June 30 2010 and receive Valogix Maintenance Through 2010 for FREE
Join the many Business One users who are getting their engaged in the Valogix exclusive, limited time promotion that offers our partners installed customers FREE maintenance through the end of 2010. This is a value of up to $3,500.
Reduced inventory levels by 20% - Reduced planning ti me by 85% - Reduced back-orders by 12% - Increase d inventory turns
See for Yourself How Much Cash
Valogix Can Help Free-up
Contact your Vision33 representativeSouth West
Jeff Denes
Ph: 949.420.3300 ext. 302
North West
Susan Hollins
Ph: 415.403.0888 ext. 13
Central and South East
Mike King
Ph: 954.251.4299 ext. 8271
