NewBenchmarksandPerformanceMetricsforProgressiveAssetManagement GrayWilliams VPWWSupplyChain LogitechAnnePatterson VPClientDelivery WCTbid Agenda TheProblemStatement TooMuchInventoryMyPrescriptionforInventoryHealthTargetedAssetManagementProcessesKeepingScore MetricsTools TechnologyReviewConclusions Recommendations Logitech Overview PersonalInterfaceProductsOff shorecontractmanufacturersSurfacetransportSupply demandsynchronizationisaconstantchallengeNeedforcontinuousprocessofproactivelyidentifyinganddispositioningat riskinventory TheProblemStatement TooMuchInventory Supply DemandSynchronization CostpressureContractManufacturingOff shoreproductionSurfacetransportation ProductTurnoverFocusisonNPI At RiskInventoryCategories ActiveProductsObsoleteProducts FactoryNew Returns WhiteBox D Stock Refurb MakingMattersWorse PriceErosion KeepingInventoryMoving ProgressiveDispositioning Std Cost FullMargin 50 75 25 100 125 150 Dispositionexcessinventorywhereveritis factory DC s andchannel Minimizetheadministrativeandoperationalcostsofdispositioning Strictlyadheretocompetitivebiddingforfinishedgoodsandcomponentshortagesandexcessdispositioning Ensureacompleteaudittrail 3StepstoInventoryHealth TuneupyourInventoryPolicy CleardefinitionClearlycommunicatedLinkProductLifeCycletoInventoryPolicySetGoals ofinventorybyagingcategoryMonitorprogress 3StepstoInventoryHealth TakeAction ProgressivelyDispositionExcessInventory ChannelIntranetAuctionSite BrokerExtranetAuctionSite SiteManagementDashboard PeriodCosts PriceErosionFactor ExcessinDC ExcessinChannel ExcessIndex Onthebasisofcurrentexcessinventoryof 40M theexcessindexiscalculatedasfollows WhseCosts 286kStdRevCosts 400kE OReserve 400kCostofCapital 300k 1 386k 1 40M 30M 1 386k 700kInotherwords thecostofinactionthismonthis 2M 3StepstoInventoryHealth DefineMetricsandMeasureSuccess Active Excess sampledata ExcessIndex ACompositeofMetrics Revenue RecoveryComponentThePriceErosionfactorDeltabetweensalesprice DistributorDiscount andWCTMarketIntelligence currentmarketprice IndexconsistsoftheabovedeltacalculatedforthetopnSKU swhichmakeup80 oftheexcess forthecategory linkto ThePriceErosionFactor Example slideforreturnscostcomponents Cost CostAvoidanceComponentWhereisthisexcess Channel costofreturnMemphis storageIndy storage 3pservicesThecostofreturningchannelinventoryishigherthancostofholdinginventoryatMemphis Thus thelocationoftheinventoryisafactorintheexposurecalculation linkto ExcessIndex CostComponent slideforreturnscostcomponents ThePriceErosionFactor Example LetussaythatofActiveInventoryattheUSDistributionCenter 12SKU smakeup80 oftheinventory atstandardcost CalculatingthePriceErosionFactorusingtheaboveformulaforthose12itemswillgiveareasonableindicationofpriceerosion ExcessIndex CostComponent Calculatetotalquarterlyreturncostperunitusingtheappropriatefactorssuchasthoselistedbelow Dividethiscostbythenumberofunitsinthechannelpendingreturnforthequarter ThisistheincreasedliabilityofexcesschannelinventoryandmustbeapartoftheExcessIndex ReturnScrapRate age COGSReturnsTransactionCostTransportationCost 1Way Re WorkCostTotalCostofReturns 000 000 TheProgressiveDispositioningCycle WCTbidChannelIntranetAuction WCTbidLiquidationAuction Scrap Recycle Routine monthly identificationofat riskinventoryPostedtointranetchannelauctionsiteFinancedeterminesminimumpricingSalesforceproxybidsonbehalfofretailers PrivateAuctionApprovedclose outpartnersonlyCompetitivebiddingTotaloperationalsupportfromWCTbid ControlleddestructionRecyclingCompliancereporting TheProgressiveDispositioningCycle WCTbidLiquidationAuction Scrap Recycle ProgressiveDispositioningisaninterlockprocessensuring Inventoryvisibility onereal timeviewforSales Finance SupplyChainBrandprotection onlyapprovedliquidatorsAdministrativeStreamlining overheadreductionControls Sarbanes Oxleytransactiontransparency closedloopinventorytracking audittrailMetricstodrivecontinuousimprovement WCTbidChannelIntranetAuction ProductRecoveryManagement CommercialEnd Users Distributors andHouseholdEnd Users ForwardSupplyChain ReverseSupplyChain ForwardSupplyChain ReverseSupplyChain Manufacturing Distribution Customer OEM s 3PL s 4PL s CM s ODM s Refurbish Repair ExpandingtheScopeoftheServiceSupplyChain Conclusions Recommendations Goafterat riskinventorybeforeitbecomesE OMetricsmatterOutsourcetheprocessPrepareforproductrecoverymanagement thesametoolsandprocessescanapply