tecniche innovative di ottimizzazione per garantire gli obiettivi di servizio - toolsgroup

TECNICHE INNOVATIVE DI OTTIMIZZAZIONE PER GARANTIRE GLI OBIETTIVI DI SERVIZIO. Milano, 24 Giugno 2015 Francesco Stolfo Partner - Sales Director oolsGroup Italy

Company Confidential All Rights Reserved 2 Company Confidential All Rights Reserved

EUROPE Amsterdam Milan Munich Barcelona London Stockholm

AMERICA Boston(*) Ontario Mexico D.F.

ASIA Malaysia India Japan

MIDDLE EAST Israel AFRICA Cape Town

Our Vision Accelerating Business Performance through Market Driven Demand Analytics and Supply

Chain Optimization Our Mission

To be the leading provider of “Powerfully Simple” software solutions that

deliver business value in complex, demand driven environments

Our Approach Best practices leveraging

quantitative and qualitative data to deliver predictive demand signals

to enhance the effectiveness of the planning process

2013 - Winner of European Supply Chain Excellence Award Category: Technology www.supplychainexcellenceawards.com

(*) HQs

Company Confidential All Rights Reserved 3

Customer References

Consumer Durables

250+ customer businesses in 31 countries loyalty greater than 95%

Food-CPG

Healthcare | Pharma | Chemical

Fashion & Apparel

Retail & Wholesale

Automotive & Aftermarket

TLC | Steel | Engineering

Company Confidential All Rights Reserved 4 Company Confidential All Rights Reserved

http://www.toolsgroup.com/images/Technology_Value_Matrix_1H2015_Inventory_Optimization.pdf

Inventory Optimization - Nucleus SCM Quadrant

Nucleus Research Inc. 100 State Street

Boston MA 02109

SCM VALUE MATRIX 1H2015

http://www.toolsgroup.com/images/Technology_Value_Matrix_1H2015_Inventory_Optimization.pdf�


Predictive Demand Analytics

ToolsGroup customer Granarolo, an Italian dairy products company, uses data analysis to help juggle the shelf-life of many of its products. For instance fresh milk lasts for six days while the company’s yoghurt has 40 days to sit in the supermarket. Seasonal taste adds to the complexity of shipping products across Europe, with items such as mozzarella cheese selling better in summer. Another factor is that 60 per cent of Granarolo’s products are sold via promotions and discounts. The consumer response to each of these deals has to be carefully calculated by the Bologna-based company. Granarolo, applying past experience of how well promotions have worked in different outlets, uses the machine learning program to generate suggested stock levels. These predictions rely on data from 60,000 sites across Europe.


Supply Chain distribution intensive industries

CPG Sales Mktg. Manufacturing

Comprehensive Statistical Model

ERP/SCP/SCE

Demand Planning

Demand Modelling Statistical Forecasting Promo, media, NPI Demand Sensing Demand Collaboration Hub

Inventory Optimization

Inventory Modeling Service Planning Mix, Stage & Lot Size Optimization Multi-Echelon

Replenishment Planning Dynamic Min/Max projected requirements SC Monitoring & Visibility Level Loading VMI Supply Collaboration Hub Transportation Plan

Comprehensive Statistical Model

Predictive Demand Analytics Market clustering Segmentation Trade Promotion Optimization Media event and trend indicators ROI

Production Planning and Scheduling Mill allocation Finite capacity plan ATP Production Scheduling MES

The ToolsGroup Solution: SERVICE OPTIMIZER 99+

Demand Planning Inventory Planning & Optimization Replenishment Planning

Company Confidential All Rights Reserved



Spending Revolution

From Mass Markets to Million of Niches



How Many (More) Products Does Amazon Sell?

http://export-x.com/2014/08/14/many-products-amazon-sell-2/

An average of 75,000 new products added every day during the past nine months.



Selling Less of More. from 80-20 to 50-50 ratio

From Mass Markets to Million of Niches

Chris Anderson: The Long Tail



Most models used in “traditional methods” have proven to be clearly inadequate when demand patterns become so irregular and “noisy”.

The “long tail” problem is mainly due to: - increasing product ranges (same sales volume reached only with higher number of SKUs) - increased number of stocking points (forecasts required by DC’s/Customers) - shorter time-slots (daily/weekly replenishments rather than weekly/monthly)

Long Tail Problem: from a logistics point of view



Long Tail Problem: from a logistics point of view

Network complexity: the number of entities to be managed and controlled grows also as a consequence of the need to extend supply chain visibility further downstream, can be differentiated by channel, wholesaler, customer and even individual store.

Very few planning tools can deal with such big amounts of data. ToolsGroup has clients managing more than 12 million SKU-locations in a single SO99+ installation!

Plants / Suppliers

Tier 1 W.houses

Tier 2 DC’s

DC’s Stores

VENDOR WHOLESALERS STRUCTURE Final Consumers



0

5

10

15

20

25

30

35

40

1 91

6 18

31

2746

36

61

4576

54

91

6406

73

21

8236

91

51

1006

6 10

981

1189

6 12

811

1372

6 14

641

1555

6 16

471

1738

6 18

301

1921

6 20

131

2104

6 21

961

2287

6 23

791

2470

6 25

621

2653

6 27

451

2836

6 29

281

3019

6 31

111

LO per day

95% of SKUs 55% of Sales Revenue

SKU sorted by AOL/day

Aver

age

Ord

er L

ine

per d

ay b

y SK

U

Italian Distributor of Electrical & Electronic Components (35.000 SKS)



• ToolsGroup owns a unique Inventory Modeling technology, which was developed to overcome many of the shortcomings of traditional inventory theory.

• The main relationship between service and inventory is modeled through proprietary STSTM (“stock-to-service”) curves, where the service level (fill-rate) is expressed as a function of the “average inventory” level (“coverage”) and another dozen parameters, such as:

• Demand volume and probability distribution • Order-line frequency and distribution • Order-line size distribution • Lead-time and supply uncertainty (delays) • Minimum and Incremental lot sizes • Optimal replenishment frequency • Cost, cube, storage need, shelf-life, … • Margin and lost sales probability • Upstream service level / stochastic delay

Service Level (% fill-rate)

0 20 40 60 80 100

ToolsGroup: Inventory Modelling & Optimization



• Largest online retailer of home goods in the U.S. • Headquartered in Boston, Massachusetts • Founded in 2002 • 422.000 SKUs • 5,000 suppliers • Key product categories include:

• Furniture • Patio & Garden • Kitchen & Dining • Bed & Bath

• 1 Warehouse located in Ogden, UT (serving the western US) • 1 Warehouse located in Hebron, KY (serving the eastern US)

Home goods (422.000 SKS)



RS Components is the World’s Largest Distributor of Electronics & Service Parts • Number of Items: 500,000 • Number of Customers: 1.5 Million • Number of WHS: 17 All over the world. • Daily deliveries: 40,000 same day shipments • Annual revenues: $2.5 Billion • Demand Patterns: Extremely Intermittent Changing Requirements in Volatile Environment: •During downturn went from 9% growth to 17% decline •During upturn back to 25% growth overnight •Scale from UK focus to Global focus •From 5000 new products per year to 5000 per month •Include the 30% of items that had never been forecast before ToolsGroup’s service-driven inventory optimization & Demand Sensing solution, to: •Maximize Customer Service Levels •Minimize Working Capital & Operating Cost •Improve forecast accuracy and Safety Stocks

SO99+ Implementation duration: •6 months In less than three months from the project kick-off: •$3.4 Million reduction in inventory •Service Level has reached 99.8% (on time, in-full)

“SO99+ does not require you to be an expert in statistics in order to use it, which is most critical.” Andrew Lewis, Head of Global Supply Planning, RS Components

https://www.youtube.com/watch?v=X1JiNEE6l3Q&index=2&list=PLA1692B42BC308804

Largest Distributor of Electronics & Service Part (500.000 SKS)

https://www.youtube.com/watch?v=X1JiNEE6l3Q&index=2&list=PLA1692B42BC308804�

https://www.youtube.com/watch?v=X1JiNEE6l3Q&index=2&list=PLA1692B42BC308804�



Q&A?



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