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