managing bailment inventory (a boat load of money!) nabca administrators conference philadelphia, pa...
TRANSCRIPT
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Managing Bailment Inventory(A Boat Load Of Money!)
NABCA Administrators ConferencePhiladelphia, PA
Friday, October 26th, 2007
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Outcome(When This Presentation Is Over)
• Demonstrated the importance of Managing Bailment Inventories
• Show new NABCA tools for Managing Bailment Inventories
• Call To Action!
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Format
• 60m = Total Session
• 15m = Teeing Up The Issue
• 15m = Integrating NABCA Data
• 15m = Managing Bailment Thru SAM
• 05m = Recap and Call To Action
• 10m = Audience Questions
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Panelists
• NABCA – Amy Grollman
• Sazerac Company – Paul Maier
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Panelists
• Sazerac Company – Paul MaierPaul Maier is the MIS Director of Sazerac Company, Inc., which is located in Franklin County, Kentucky with additional responsibilities in New Orleans, Louisiana.
Maier started in the beverage alcohol industry in 1983 at the Frankfort, Kentucky; Ancient Age facility at the age of 20. He started out working with the President and Controller to develop hardware and software systems needed to run the operations.
In 1988, he became the DP Manager and handled all IT Systems and supervised all company data entry and processing activity.
He then became MIS Director in 2001 as his current role.
Maier holds an Associates Degree in Data Processing from the University of Louisville Speed School, a BS in Computer Science from Kentucky State University and has an IT Business Manager Certification from Belmont University. He and his wife Johnna have 3 daughters, McKenna, Marysa, and Miranda, and live in Simpsonville, Kentucky.
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Panelists
• NABCA – Amy GrollmanAmy is the IS Manager for NABCA, and she has been with NABCA for over 12 years.
During that time, Amy has worked directly with Supplier and Control State members to streamline the flow of data.
Amy has a BA from Dickinson College and MS in MIS from University of Maryland.
When Amy is not working, she loves spending time with her three daughters!
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So! What Is The Big Deal?
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So! What Is The Big Deal?
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So! What Is The Big Deal?
• At any time; 5.0 million cases are in storage
• In 27 different warehouses
• At least 7 states have built new warehouses
• At a cost of $70.0 million
• Space is tight everywhere
• More will build in the future
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So! What Is The Big Deal?
• 1.0% OOS results in $48.0 million in lost sales
• 1 day of extra inventory is 100,000 cases
• Could take at least 21,000 sq feet of space (enough space for 1,333 listings)
• 1 day of inventory is worth $7.0 million in WC
• 1 day of inventory costs $500,000 in interest
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So! What Is The Big Deal?
• What about management time?
• 16,066 SKUs to be managed
• 19 states
• 413 vendors
• 27 warehouses
• How many people involved in the process?
• How many labor hours are spent managing the process?
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So! What Is The Big Deal?(Conclusions)
• It is a boat load of money
• Complicated logistical challenge
• Capital spending implications of getting it wrong are big!
• Poor bailment inventory management affects consumer choice (listed SKUs)
• Managing problems takes a lot of time
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Is There A Problem?
Er, Yes!
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Example: Mississippi
• Example: MS; has great information!
• Problem peculiar to MS; Unlikely!
• 8 weeks inventory on hand
• 96,000 surplus cases
• 21,000 square feet of space
• = 10% of available space
• Yet, a 2.67% OOS rate
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Example: Mississippi
• 143 vendors (herding cats)
• 3,452 SKUs
• Large company with 22 weeks on hand
• Out of stocks, lack of availability, and less listed items = the restaurant association starts talking about the need to privatize
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What Causes The Problem?
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Problem Cause?
• Murphy’s law?
• Mercury in retrograde?
• Supplier neglect?
• Broker neglect?
• Control state neglect?
• Unpredictable sales?
• Poor forecasting?
• Communication / Disconnected / Invisible
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What To Do About It?
Technology Based Solution
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Two Solutions
• Make the bailment inventories part of your own inventory management system
• Use SAM I AM to manage bailment inventories more effectively
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Bringing It In House
• From the Control States to NABCA
• From NABCA to Sazerac
• What happens inside Sazerac
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NABCA System
File Transfer (FTP)
ID
MI
MT
NH
PA
WV
MS
Control State Inventory Data
Formatdata to
common layout
NABCA Inventory Data Warehouse
From the Control States to NABCA
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NABCA Data feed from West Virginia
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NABCA Data feed from Mississippi
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NABCA Data feed from Pennsylvania
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NABCA Formatted Inventory data in Data Warehouse
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Sazerac AS400
Product Exception Report
Product Exception Report
NABCA
Warehouse
FileInventory Product
File
Inventory Transaction
File
Automated File Transfer
Format Trans File & cross ref
our item codes
CreateCategory
tables
Build Cognos data linking
in our depletions
Cognos Cube
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RPG Language Polls The NABCA Computer To Get Data
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When We Get The File It Looks Like…..
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RPG Language Formats Data For Use In COGNOS
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NABCA Bailment Inventory Data Viewed Through Our Own System
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Right There With Our Other Inventories
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Cognos view showing last 5 days of Inventory
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Cognos view showing Estimated Days on Hand
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What Is Next For Us?
• Add additional States
• Perfect the matching of the codes between the states and our SKU #
• A plug for GTIN!
• Improve the look and feel of the reports
• Set Min / Max levels
• Set up an alert system on low / highs
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Using “SAM-I-AM”
Case Study: NABCA
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Time to Reorder?
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Adhoc Reporting
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Recap And Call To Action
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Recap
• It is a big, important topic
• Lots of money involved
• Lots of headaches
• Affects listings / consumer choice
• Affects customer service
• The implications of getting it wrong could be as large as to raise the privatization question
• There are solutions
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Benefits
• Reduction in working capital and financing costs
• Reduce pressures on warehouse space
• Increased listings and consumer choice?
• Improved relationships
• Less headaches
• One less reason to privatize!
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Call To Action - Suppliers
• Commit to excellent management of bailment inventories
• Integrate use of NABCA data into the management of your bailment inventories
• Start utilizing SAM I AM to improve management of bailment inventories
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Call To Action – Control States• Provide scorecards on industry performance
• Provide bailment inventory information to NABCAState Name Bailment Data
Alabama None
Mississippi Nightly
West Virginia Nightly
Maine None
Vermont Coming Soon
North Carolina None
Idaho Nightly
Wyoming Coming?
Virginia Coming Soon
Montgomery County None
Utah Coming Soon
Washington None
Iowa Coming Soon
Michigan Daily
Oregon Coming Soon
Pennsylvania Weekly
Ohio Coming Soon
Montana Daily
New Hampshire Daily
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Thank You!
Audience Questions