Accurate and demand forecasting & replenishment ordering Saas solutions for logistics used by Retail, Wholesale, Manufacturing and Spare Parts companies to lower inventory levels, improve service levels, reduce time spent ordering and have better process efficiency at low-risk and very cost-effective. Look it up at www.relex.fi or mail me at dirk.bavelaar@relex.fi

1. RELEX –
Automatic and efficient
replenishment ordering!
RELEX
01.06.2010
vrijdag 10 december 2010

2. RELEX software in a nutshell
• Software tool that enables automatic forecasting and inventory
replenishment
• Works together with customer’s ERP system
– Sales data, inventory records, and different kinds of product master
data are transmitted from the ERP system to RELEX
– RELEX system forecasts future demand and determines order
requirements
– Replenishment orders and forecasts are transmitted from RELEX to
the ERP system
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3. RELEX
• Solutions for efficient and accurate
forecasting and replenishment
• Management-owned
• Rapid and profitable growth
• Strong customer references
– Retailers, wholesalers,
manufacturers and spare parts
companies
• RELEX’s strengths
– SaaS-model
– Fast, flexible, and innovative
– Risk-free choice (pre-studies, pilots,
cost-effective implementation) RELEX solutions are used for forecasting and
replenishment of millions of SKU’s, tens of
warehouses, and hundreds of stores, and are
used to control billions of euro’s material flows.
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4. RELEX’s solutions add value to
the customer’s ERP system
RELEX ERP
Order calculation Inventory Transactions
transactions • Sales
• Accurate order calculation
that considers each individual Product master data • Purchase orders
product’s, location’s and • Goods receipt
Assortment
supplier’s special
information Inventory records
characteristics
• Inventory corrections
Demand forecasting
• Reliable automatic and Order quantity Production planning
manual forecasting that • Production scheduling
Demand forecast
considers each SKU’s • Capacity management
individual demand pattern
Control of replenishment and
forecasting
• Parameter management and
optimization
• Exception handling
• Flexible reporting
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5. Attained customer benefits
 Several man-years of work removed from the
Reduction of the time purchasing function
spent on ordering  Significant reduction of the number of buyers
(up to 75%)
 Removal of unnecessary buffers and
reduction of the inventory investment
Lower inventory levels (combined with improved availability)
 Up to six times quicker inventory turns
 Availability up by as much as several
Improved service levels percentage points
 Significant increase in sales (in stores)
Better process  Significant reduction of the total cost of
efficiency freight, handling, and inventory
Savings of several hundreds of thousands of Euros per year!
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vrijdag 10 december 2010

6. DIY retail and wholesale: Case Rautakesko
• Company specifics
– Sales 3 953 M€, 8 operating countries, 400 stores
– The largest DIY/Hardware chain in North-Europe and 5th largest in Europe
• Initial situation:
– Replenishment purchasing de-centralized to product manager’s
– Different tools utilised (SAP, Excel, Logisticar)
– Goal to systematize and increase process efficiency and decrease stock
levels
• Project
– Integration to SAP, Finland wholesale into production use in 2008, stores
and remaining other countries 2009 – 2011
• Results:
– Significant reduction on purchasing staff
– Avalability has risen to a record high level
– Inventory turns increased by 37%
– Process quality has increased
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vrijdag 10 december 2010

7. Book and stationaries trade:
Case Suomalainen Kirjakauppa
• Basic facts:
– Finlands market leader in book retail, 62 stores, average 10 000 assortment per
store
– 70% of sales from books, 30% from stationaries
– High assortment turnover in books (over 85% yearly)
• Project starting point and goals:
– ERP-based automatic replenishment and order proposal handling in the stores
– Goal: totally centralised automatic replenishment – all ordering work out of the
stores
• Project:
– After piloting, roll out of whole store chain in five months
• Results:
– One central planner handles replenishment orders for the whole chain (600 000
SKU’s)
– Shelf availability increase 91% -> 98%
– Inventory turnover increase by 16%, while good visual shelf lookout maintained
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vrijdag 10 december 2010

8. RELEX’s competitive advantage is advanced
functionality combined with lean use and
implementation
Efficiency in daily use &
Compared to best
actual roll-out speed
RELEX
competitors, RELEX
Slimstock offers
Oracle • at least matching
JDA E3
functionality
SAP F&R • leaner and faster
implementation
Lawson projects
• lower risk
MS Dynamics AX
ERP
SAP ERP RELEX offers risk
free piloting – try us
Functionality, forecasting &
out!
replenishment
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vrijdag 10 december 2010

9. RELEX pushes the boundary of automation and
supply chain efficiency over ERP-functionalities
RELEX ERP-functionality
 Advanced statistical modelling  Simple time series models
(seasonal, trend, intermittent) supported
Forecasting  Causal models (e.g.
promotions)
 Advanced inventory policies  Basic MRP calculation and
and optimization reorder point policies
Inventory
optimization  Coordinated replenishment
 Supply chain synchronization
 Advanced optimization and  Limited possibilites for
self-learning models exception management
Level
of automation  Exception based management
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vrijdag 10 december 2010

10. Key functionalities: Accurate forecasting
• Advanced statistical modeling
– Several mathematical models for base, trend, seasonal and
intermittent demand
– Intelligent demand classification algorithms for selecting and
optimizing the most appropriate model with minimum human input
– Automatic decomposition to base demand, promotional demand and
special sales
• Promotional forecasts and events
– Several different models and ways to use causal factors (prices,
promotions etc.) to complement sale history
• Forecasting on different hierarchy levels
– Manage at any level of product, location or time
– Flexible hierarchical forecast creation, reconciliation and allocation
to item/location-level
• Flexible and efficient manual adjustments
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vrijdag 10 december 2010

11. Accurate forecasting: example
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12. Key functionalities: Inventory optimization
• Logical replenishment policies and optimization
– Different ordering models for products with for example low demand
or seasonality
– Time phased optimizations that use desired service levels,
replenishment cycles and cost information to determine safety
stocks and economic order quantities
• Coordinated replenishment
– Can-order, cyclic and full-truck models can be used for creating
optimal orders when many products are ordered from the same
supplier
• Synchronized supply chain
– Future order proposals and inventory balances can be estimated
and also used in forecasting and ordering (e.g. the forecasted orders
for stores can be used as a forecast for DC.)
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vrijdag 10 december 2010

13. RELEX use process
Order proposal
acceptance
Daily actions Exception management
Follow-up
Daily calculation of Goal and resctrition setting
forecasts and order (Availability goal, cost information,
proposals order restrictions)
Regular updates Automatic update of Update based on
(for example once a parameters need (for
(Safety stocks, forecast
week) example once a
models,order batch sizes,
order cycle) month)
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vrijdag 10 december 2010

14. Key functionalities: High degree of automation
• Parameter optimization and self-learning models
– Intelligent algorithms for selecting the best forecast models and
optimizing safety stocks and order quantities
– Automated and scheduled optimization runs that use self-tuning
algorithms and can be flexibly configured to react to exceptions and
changes
• Exception based management and flexible reporting
– Complete flexibility to use any parameters and metrics at any
aggregation level for defining exceptions
– Possibility to automatically assign different actions (e.g. raise safety
stock or optimize forecast model) to exceptions
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vrijdag 10 december 2010

15. Exception management with RELEX
• RELEX solutions are based on exception management from scratch
• Especially in high volume business exception management is powerful
tool
– Important to define exceptions as situations, that can be acted on
– Key is to act automatically / semi-automatically on exceptions, as human
interference ís limited
Exception
Weekly exceptions
• Over-stock situations
• High spoilage
• Forecast errors
• Order automation surveillance
Daily exceptions
• Out of stock
• Forecasted OOS
•
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vrijdag 10 december 2010

16. RELEX exception management is unique
• User can define exceptions with total flexibility
– Basis information, classification or metrics can be used as conditions
– Can be changed even on daily basis to suit current available human
resource to handle exceptions
• Possibility to connect automatic actions to exceptions
– Especially in large product quantities more efficiency and much
speedier actions
• User interface allows user to manually view root causes of
exceptions and act on them efficiently
– Based on graphical design and flexible jumps from screen-to-screen
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vrijdag 10 december 2010

17. RELEX can deliver – and prove it beforehand
• You can quickly access
– Yearly labour savings of over ten man year
– Significant reduction of lost sales and increased customer
satisfaction by better shelf availability
– Free about 20% of the capital tied to your inventory
• We can ensure with minimum risk before systems investments
are needed with our three step process
1. History-data based analysis to ensure the applicability of RELEX’s
science-based forecast- and order algorithms
2. Practical pilot with few stores or limited product areas – test the
whole improved process!
3. SaaS –based operating model – pay as you go
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18. Minimising risk by three implementation phases
Current status
Ensuring Moving to
and
practical continuous
improvement
applicability operation
potential
Phase 3:
Phase 1: Phase 2:
Full
RELEX X-Ray, Process and
Implementation
analysis project system pilot
and roll-out
- Implementation
- Goal setting - New improved
of RELEX
- Achievable operations
- Full trial of in
direct results - Roll-out and
practise
- Duration 6 – 8 change
- Set-up 4-8
weeks from management
weeks
star to - Duration 3-8
- Pilot duration 3
reporting months
months
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vrijdag 10 december 2010