How to Use this Slide Deck Personalization Any time the word “supplier” is used, think about adding your company name/logo Personalize your goals/statistics for the program in slides with a green border, then delete the border

Vendor Managed Inventory Date Vendor Managed Inventory Subtitle Edit Template

Vendor Managed Inventory Leveraging Greater Information Sharing to Reduce Supply Chain Costs, Improve Sales, and Increase Customer Satisfaction Vendor Managed Inventory is the process where the supplier generates orders based on mutually agreed objectives and demand information sent by the customer.

Executive Summary The internet has made sharing data easier, increasing the flow of data within and between organizations Effective supply chains leverage information from as much of the chain as possible Sellers need to be more closely aligned with distributors, creating a seamless buying process There is an opportunity to turn Supply Chain into a revenue driver rather than a cost center TrueCommerce Datalliance VMI provides a dramatic ROI: many benefits, low risk, modest investment Distributor Quote

The Problem The distributor and supplier have different sets of information Both spend time and money trying to predict what the other will do DISTRIBUTOR SUPPLIER The problem with traditional replenishment is that the distributor takes the information they have access to and places the order with the supplier. The supplier, in turn, has to produce in anticipation of what the distributor will order. There are employees at the distributor trying to guess how long it will take the supplier to get the new inventory to them and there are employees at the supplier trying to guess how much the distributor is going want. No matter how good these people are, they are operating with incomplete information and occasionally they are going to get it wrong. When that happens, it will be expensive for both organizations. SALES PUTAWAY EVENTS INVENTORY PROMOTION LEADTIME PACKAGE SIZES ITEM NUMBERS

The Solution Communicate between supplier and distributor to create better orders and smoother demand pattern Tighten relationships and align business goals Increase visibility throughout supply chain to enable better resource planning Use cloud-based solution to eliminate hardware costs DISTRIBUTOR SUPPLIER In a perfect world one group of people would be in charge of this business interaction; one group with access to all of the data. Vendor Managed Inventory helps us do this. It does this by increasing our access to information. The first step is to get the product activity data from the distributor to build the orders. By combining our information, the distributor can reallocate resources to more value-added processes and we get greater visibility into the supply chain, improved efficiency, and increased sales.

Increase Customer Satisfaction Both immediate and end customer Reduces distributor effort to order, the right product shows up on time Increases brand loyalty, ease of ordering is a differentiating factor Products on shelf more often for end customer This is a value-added service we offer to the distributor. From the distributor’s perspective, with little effort from them our products show up on a schedule. The right products, in the right amounts. This means our end customers see the right products on the shelves.

88% Productivity Reworked Orders Datalliance Customer Analysis The impact on human capital is equally as impressive. Datalliance, our VMI software provider, recently compiled insight from a number of their customers across industry groups and found that their planners physically re-work as much as 40% of their non-VMI generated orders. Compare that to their VMI-generated orders that require only 5% manual manipulation. That’s a productivity gain of 88%! Datalliance Customer Analysis

The Value of Collaboration Enter your metrics then delete this bar Average Location Distributor In Stock % Number of SKUs Stocked Weekly Sales Traditional Replenishment 97% 300 $20,742 After One Year of VMI 98% 318 $26,456 Source: actual data from software vendor Using more data allows for a higher in stock percentage Greater customer service encourages Distributor to stock more items These factor combine to increase sales By making the ordering process smarter we see that the distributor is in stock with our products more of the time and the ease of ordering encourages them to stock a wider range of our product. These factors combine to make our sales higher at the distributors who are in our VMI program than they were before joining. We want to increase the number of distributors in the program so that we can gain a bigger benefit. [Use the Period Comparison report to generate these numbers for your program.]

Leveraging Expansion The Datalliance fee structure means program expansion decreases costs for each Distributor Because of the fee structure of our software supplier, expanding the program is less expensive than starting. There are volume discounts and the annual fee is fixed, no matter how many partners we have. Expanding the program allows us to amortize that cost across a larger distributor base. Increasing the distributor base would also give us greater sales insight into a wider range of our customers.

Program Expansion Benefits Adjust this slide for your situation and then delete this bar Increased collaboration with key Distributors Smoother, more predictable demand pattern Fewer reworked orders Better customer service Increased brand loyalty Improved downstream visibility Free sales force time for selling Amortize fixed costs across greater Distributor base Turn supply chain into a revenue driver In summary there are a lot of benefits to expanding our VMI program. We will develop closer ties to our most important customers, see a smoother demand pattern, handle transactions with our customers more smoothly, and increase sales. Ultimately, broadening our program can help shift supply chain from a cost center to a revenue driver through more visibility downstream.