1.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 1 “Best Practices” Inventory Management Grant W. Howard (734) 428-0529 ghoward@gwhco.org www.gwhco.org ICSR ICSP ICSD ICSL ICAMM ICAR ICAI ICSW WTERR POERA POERR ICAMU WTERA ICRIS ICRIG Sx Enterprise Setting it Up, Getting Good Data, How to Use it, and How to Get Results ICRIR ICRIF ICRIT

2.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 2 Sx.e - Getting Results n Overview of the Replenishment Process n How to Set it up, How to Use it, How to Get Results - 10 Steps: –The Numbers: »Step 1: Parameters/Set up9 »Step 2: Data Accuracy33 »Step 3: Forecasting - OP, LP and EOQ38 »Step 4 : Stock Level Accuracy42 –The Tools: »Step 5: Replenishment47 »Step 6: Timeline (Too Late and Too Early)59 »Step 7: Excess/Surplus Inventory63 –Getting Better Results: »Step 8: Proactive Maintenance71 »Step 9: Monitoring and Measuring Results91 »Step 10: Controlled Replenishment97 n Final Thoughts Through Step 8 Today. Steps 9 & 10 and Final Thoughts are Self Explanatory.

3. Order Point: Usage Buckets Usage Method Trending Path/Roll up LT Buckets LT Method Safety Method OP Adjusters Line Point: Target & Type RC/OC/XF Calc. or Manual EOQ: “K” and “R” Cost Min and Max Surplus Points: Internal (LP+EOQ) External (X months) Misc: Status Freeze Usage Method, Path Replenishment Method Level: On-hand Committed Incoming Parameter Set-Up Data Collection, Accuracy and Proper Use of Data Forecasting Stock Level Accuracy Replenishment: When, What and How Much Time Line: Too Late and Too Early External Surplus Maintenance Measurement Controlled Replenishment To Be a Profitable Company Forever Availability, BO Handling, Accuracy, OTD Sales, Cogs, Freight, C to C, C to P When to Replenish?

4.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 4 Inventory Manager/Buyer’s Day n “Smart” Continuos Parameter Set Up - Daily n Data Collection, Accuracy and Proper Use of Data - Daily n Forecasting: Safety, Order Point, Line Point, EOQ - Daily/Monthly n Stock Level/PNA Accuracy - Daily n Replenishment: Worthy Items Below Order Point - Daily n Timeline Analysis: –“Too Late” Report - 2X/Week –“Too Early” Report - 2X/Week n Surplus Inventory - 1X/Week n Proactive Maintenance - Daily –Good Proof Reports for Start Up –While doing Replenishment –Good Exception Control Center –Information from Other Sources (Internal, Customers and Vendors) n Monitoring and Measurement - Continuos Improvement n Controlled Replenishment - Critical

5.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 5 Inventory Management 10 Step Process The Numbers: 1. Parameters/Setup: –“Smart” - ICSR –Company/Warehouse - ICSD –Product Line - ICSL –Product Master - ICSP –Product Warehouse - ICSW 2. Data Collection: –Usage - OE/WT –Lead Time - WT/PO –Level: On-hand and Paperfloat - BIIS –Purchasing History 3. Forecasting: –Rank - ICAI –Replenishment Cycle - ICAR –Usage, LT, Safety, Order Point, Line Point, Surplus Point, Order Quantity - ICAMM 4. Stock Level Accuracy: –On-hand - CC’s –Paperfloat - BIIS The Tools - Inventory Management: 5. Replenishment: –Use Priority Reporting - POERA –Purchases - POERR, POEAR –Transfers - WTERR, WTERA 6. Timeline Analysis: –“Too Late” - ICRIG –“Too Early” - ICRIG 7. Excess/Surplus: –Prevention –Disposition - ICRIS The Tools - Getting Results: 8. Proactive Maintenance: –Proofs –While Replenishing - POERA –Exceptions and Mass Updates - ICAMU 9. Measurement and Improvement: –Fill Rates, BO, OTD, Accuracy - ICRIF –Inventory Mix (Safety, Excess, Defective) –Turns and ROI (GMROI and/or T&E) - ICRIT/R 10. CONTROLLED REPLENISHMENT

6.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 6 Inventory Management is at the Time of Replenishment - the “When, What, and How Much”, Everything Else is Inventory Correction.

7.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 7 Data, Set up, and Generating the Numbers It All Starts Here Better Numbers

8.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 8 Inventory Management 10 Step Process The Numbers: 1. Parameters/Setup: –“Smart” –Company/Warehouse –Product Line –Product Master –Product Warehouse 2. Data Collection: –Usage –Lead Time –Level: On-hand and Paperfloat –Purchasing History 3. Forecasting: –Rank –Replenishment Cycle –Usage, LT, Safety, Order Point, Line Point, Surplus Point, Order Quantity 4. Stock Level Accuracy: –On-hand –Paperfloat The Tools - Inventory Management: 5. Replenishment: –Use Priority Reporting –Purchases –Transfers 6. Timeline Analysis: –“Too Late” –“Too Early” 7. Excess/Surplus: –Prevention –Disposition The Tools - Getting Results: 8. Proactive Maintenance: –Proofs –While Replenishing –Exceptions and Mass Updates 9. Measurement and Improvement: –Fill Rates, BO, OTD, Accuracy –Inventory Mix (Safety, Excess, Defective) –Turns and ROI (GMROI and/or T&E) 10. CONTROLLED REPLENISHMENT

9.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 9 Step 1: The Set Up - Parameters n “Smart” Parameters MaintenanceICSR n Warehouse MaintenanceICSD n Product Line MaintenanceICSL n Product MaintenanceICSP/ICSW At start up and as needed

10.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 10 ICSR - IC Setup Replenishment

11.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 11 ICSR - Ranking

12.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 12 ICSR - Ranking

13.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 13 ICSR - Usage Months

14.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 14 ICSR - Usage Monitoring and Adjusting

15.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 15 ICSR - Lead Time

16.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 16 ICSR - Safety Stock and Analysis

17.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 17 ICSR - Order Point Adjusters

18.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 18 ICSR - Exceptions

19.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 19 ICSR - BCC Priority

20.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 20 ICSR - Transfer “Smart” Rounding

21.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 21 ICSD - IC Setup Warehouse

22.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 22 ICSL - Prod. Line Maint. (Order)

23.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 23 ICSL - Prod. Line Maint. (Required)

24.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 24 ICSP - Prod. Maint. Master (Req’d) 6” Disney Princess Doll - Belle Belle 6” Doll A1Toys

25.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 25 ICSW - Required

26.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 26 ICSW - Ordering

27.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 27 ICSW (Ordering) - Usage and Hits

28.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 28 ICSW (Ordering) - Trending

29.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 29 ICSW (Ordering) - LT Maint

30.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 30 ICSW (Ordering) - ASQ

31.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 31 ICSW - Frozen 12” Aluminum Shovel

32.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 32 ICSW - Seasonality (Trending) 12” Aluminum Coated

33.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 33 Step 2: Data Collection n Usage Buckets: Sales, Transfers, Lost Sales, Exceptional Sales, and Manual/Automated Overrides n Lead Time Buckets: P/Os, Transfers, and Manual Overrides n Stock Level Accuracy: Onhands and Paperfloat - Will discuss in Step 4 Where Does Most of this Data Come From?

34.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 34 Who’s Involved? - TEAM

35.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 35 Usage/Demand The Cornerstone Sales/Transfer History Lost Sales Exceptional Sales/Xfer Human Input Usage/Demand What is Demand Planning? Lost Sales: –Ask what they want –Canceled B/O’s –Directs to fill in –Substitutes –Ship from another whse Three Methods to Enter LS: 1. While in Sales/Order Entry 2. Lost Sales open order 3. Sheet, then to LS open order What about the fill rate report? What is an Exceptional Sale/Transfer?

36.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 36 OEET- Lost & Exceptional Sales

37.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 37 Lost Sales Tracking- Usage Logging

38.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 38 Step 3: Forecasting n Rank(Rank and Class)ICAI n Review/Order/Xfer CycleICAR n Usage, Safety, OP, LP, OQICAMM n Exception Reporting*ICAMU Monthly and as needed * Discussed With Maintenance Section

39.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 39 ICAI - Rank (and Class)

40.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 40 ICAR - Review Cycle Min, Max, Exception RC Analysis & Basis

41.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 41 ICAMM - Review Cycle Basis

42.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 42 Step 4: Stock Level/PNA The Other Cornerstone n On-hand IntegrityWMS, CC n Paperfloat ControlBIIS Daily

43.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 43 Paperfloat Control - BIIS

44.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 44 Paperfloat Control - BIIS

45.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 45 Profitability, Asset Management, and Efficiency “Getting Results” Better Tools

46.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 46 Inventory Management 10 Step Process The Numbers: 1. Parameters/Setup: –“Smart” –Company/Warehouse –Product Line –Product Master –Product Warehouse 2. Data Collection: –Usage –Lead Time –Level: On-hand and Paperfloat –Purchasing History 3. Forecasting: –Rank –Replenishment Cycle –Usage, LT, Safety, Order Point, Line Point, Surplus Point, Order Quantity 4. Stock Level Accuracy: –On-hand –Paperfloat The Tools - Inventory Management: 5. Replenishment: –Use Priority Reporting –Purchases –Transfers 6. Timeline Analysis: –“Too Late” –“Too Early” 7. Excess/Surplus: –Prevention –Disposition The Tools - Getting Results: 8. Proactive Maintenance: –Proofs –While Replenishing –Exceptions and Mass Updates 9. Measurement and Improvement: –Fill Rates, BO, OTD, Accuracy –Inventory Mix (Safety, Excess, Defective) –Turns and ROI (GMROI and/or T&E) 10. CONTROLLED REPLENISHMENT

47.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 47 Step 5: Replenishment n “When” to Replenish - Order Point: –Service: Below Order Point Trigger –Profits/Cost: Target and/or Timeframe Trigger n “What” to Replenish - Line Point: –Replenishment Options: »Line Buy (Make Target/Review Cycle) »Fill In Transfer/Emergency Buy »Do Nothing –Replenish all items that will go BOP before the next replenishment cycle (Balance the Line) n “How Much” to Replenish - Line Point/EOQ: –Up to Line Point/Remaining Cycle (Cycle Coverage - Freight/C to P) –Compare to Suggested Order Quantity (EOQ/Class - CtoC and CtoP) –Minimum Run –Vendor/Transfer Package Rounding PNA/Level Surplus Point Line Point or Max/EOQ Order Point or Min EOQ Order Cycle Lead Time Safety

48.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 48 Replenishment Buying and Transferring Generate RARR’s/ReportPOERR Merge P/OPOERM Edit P/OPOET Generate RARR’sPOERR* Review/Accept/Merge P/OPOERA (BCC) * Schedule to run nightly if using the POERA. Setup to run to a file. ERR - Generate RRAR - Print (ERM)/Online(ERA) ERA - Review/Acceptance/Merge - Online RRAR (BCC) ERM - Merge - Printed RRAR ET - Edit Recommended Replenishment Action Report (RRAR) Warehouse Transfers follow the same except “WT”

49.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 49 PO/WTERR

50.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 50 POERA- Line Summary (Buyer’s Control Center)

51.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 51 POERA - Item Summary (BLP/BOP/Suggest WT)

52.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 52 POERA - Item Detail (Drill Down/Maint)

53.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 53 Making Targets Properly General rules of thumb: n Days n Dollars n 1/2 way through OC/RC Cost to Carry vs Freight, Price, and Service: n Key is Equal Days Supply n Increase or Decrease n Use for Meeting Targets and Emergency Fill-ins

54.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 54 POERA - Making Target Header Tab - Increase/Decrease Tab

55.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 55 $Discount/Increase $C to C $Discount/Increase Quantity Negative Positive Break Even Max. Potential Discount/Price Increase versus C to C Break Even (Days): (2 x Discount% / Monthly C to C) x 30 Maximum Potential Savings (Days): (Discount% / Monthly C to C) x 30

56.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 56 Discount/Increase: 5% (This could also be Freight) Cost to Carry “K” cost: 24% Break Even (Days): (2 x Disc% / Monthly C to C) x 30 = 150 days Maximum Potential (Days): (Disc% / Monthly C to C) x 30 = 75 days

57.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 57 Price Increases/Discounts Remember, this is total days supply to on the shelve, not necessarily buy. Use the “up to vendor target logic” (change order cycle days) to meet the days supply.* *This method works well for periods less than 90 days supply (seasonal or large swing items - be careful). Be aware of future freight, minimum considerations, fill ins, NS and OAN items. If targets are involved, be sure to fill in the entire line not just the fast movers or work a deal.

58.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 58 Vendor Performance and Negotiations - It’s not just Price n Lower COGS n Lower Freight Minimums n Multiple Drops for Freight n Combined P/O’s for Minimum n Freight Paid Fill-ins n Fill Rates n Consistent Lead Times and OTD n Accurate Shipping (Blanket Receiving) - Product, Quantity, Price n Good Backorder Handling n EDI/VMI/2-Way Information Flow - B2B n Automated Product and Pricing Updates n RGA’s on New Items n Excess Inventory Returns n Win/Win - Partnership

59.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 59 Step 6: Time Line Analysis Identification and Prevention are the Key Out 0-30 days In Out 30/+ days Too Early Incoming and will be early or not needed Out Incoming and will be late 0/- days Too Late

60.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 60 ICRIG - Time Line Analysis

61.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 61 ICRIG - “Too Late/Gap”

62.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 62 ICRIG - “Too Early”

63.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 63 Step 7: Excess/Surplus Inventory Responsibility Coordination Prevention Identification Disposition Goals/Plan CONTINUOUS

64.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 64 ICRIS - “Smart” Surplus n Short Term/Internal (EB, GAP): Surplus = Available > LP + EOQ n Long Term/External (Take Action, Gone): Surplus = Available > X Months Usage* Smart Logic: 1. Frozen or LP + EOQ > X Month Usage: Surplus = Avail > LP + EOQ 2. Order as Needed, N/S, Discontinued: Surplus = Avail 3. New Items: No Surplus n Must have Visibility and Utilization Monitoring

65.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 65 ICRIS - Surplus

66.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 66 ICRIS - Long Term Surplus

67.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 67 Surplus Inventory Disposition BOP/GAP - Put of the fire: Short or Long Term BLP/Sugg Xfers - Use it where you can: Long Term Teach branches to use LT first. Don’t borrow stock and put branch in “need”. 1. Stock Balance: (“X” Months Supply) - With “To” branch approval/Before Buy 2. Sell Above Cost: Customer, Other Distributor 3. At Cost: Sell at cost, Return at cost with no charges (freight, restock) 4. Below Cost: Sell below cost, Return below cost and/or with charges 5. Sell Above “Write-off” Cost: Garage/Fire Sale, Flea Market, Auction House, Liquidation House 6. Dump at “Write-off” Cost: Donate, Scrap, Dump

68.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 68 PNA/Level Surplus Point Line Point or Max/EOQ Order Point or Min EOQ Order Cycle Lead Time Safety Inventory Reductions - The Proper Way to Turns Understand the Impact Areas: n n Excess and Defective: – –No one wants or needs – –Control the Feelings – –Let it Roll, Let it Go – –Be Careful - C to C/Mix – –Cost of Disposition n n Line Point and Order Quantity: – –“What” and “How Much” – – Be Careful - C to P Departments n n Order Point - Safety Stock: – –“When” – –Be Careful - Customer Service Low Risk High Risk

69.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 69 Proactive Maintenance Keeping it Working

70.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 70 Inventory Management 10 Step Process The Numbers: 1. Parameters/Setup: –“Smart” –Company/Warehouse –Product Line –Product Master –Product Warehouse 2. Data Collection: –Usage –Lead Time –Level: On-hand and Paperfloat –Purchasing History 3. Forecasting: –Rank –Replenishment Cycle –Usage, LT, Safety, Order Point, Line Point, Surplus Point, Order Quantity 4. Stock Level Accuracy: –On-hand –Paperfloat The Tools - Inventory Management: 5. Replenishment: –Use Priority Reporting –Purchases –Transfers 6. Timeline Analysis: –“Too Late” –“Too Early” 7. Excess/Surplus: –Prevention –Disposition The Tools - Getting Results: 8. Proactive Maintenance: –Proofs –While Replenishing –Exceptions and Mass Updates 9. Measurement and Improvement: –Fill Rates, BO, OTD, Accuracy –Inventory Mix (Safety, Excess, Defective) –Turns and ROI (GMROI and/or T&E) 10. CONTROLLED REPLENISHMENT

71.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 71 Step 8: Proactive Maintenance n Good Proofing Reports (Pline, Product) - Get a Clean Start n While doing the Inventory Management Functions: –If Change a Quantity, Remove a Line, or Add a Line - Do the Maintenance –If Items Go BOP or Gap Before Expected and Not an Exceptional Spike, Adjustment or PNA Change - Do the Maintenance –If Items are Not at BOP or are on “Too Early” and Not a Return, Adjustment or PNA Change - Do the Maintenance n Good Exception Center/Reports are a Must! n Good Company Understanding and Eyes and Ears with Communication n Use Hits and Cost logic to Review, to Prioritize, and for Action Order PointLine PointStock LevelFour More 1. AMD/U4. OC/RC/XC5. On-hands7. SOQ/EOQ 2. ALT6. Paperfloat8. Status 3. Safety Stock9. Paths 10. Freeze/Tmins

72.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 72 Service and Profit - A Quick Method HitsHHLL CostLHLH

73.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 73 Spend your days reacting to the fires... you may be efficient, but will you be effective? Fire Prevention...

74.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 74 Product Line Proof Report

75.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 75 Product Proof Report

76.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 76 POERA While Replenishing - Be Proactive!

77.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 77 How to Make it Work Items Below Order Point Sooner then Expected Items Show on the “GAP” n Spike (customer or branch) - Teach Smart Selling/Transferring, Did you Expect to Cover (Safety, ASQ, 5HI, Tmin) n Stock Adjustment and/or Changed/Deleted Incoming (P/O or Transfer) n Knocking Line Out of Cycle: Topping Truck Incorrectly, Special Buys on Fast Movers n Not Putting Order/Transfer on when getting the Commitment n Bad OP/LP/OQ/Level: Demand, Lead Time, Safety, Order/Review Cycle, Level Wrong n Not Replenishing up to OP - Playing the Game n Not Replenishing up to LP - Playing the Game CHECK THE LEDGER INQUIRY - Spike or Adjustment CHECK OLD P/O and TRANSFER - Changed Incoming CHECK BAD DATA/PARAMETERS - Usage, LT or Safety Low OTHERWISE - Playing the Game

78.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 78 ICAMU

79.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 79 ICAMU - Exception Selection

80.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 80 ICAMU - OAN Products with Hits

81.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 81 ICAMU - Tmin Low Activity

82.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 82 ICAMU - Trending Exception

83.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 83 ICAMU - Lead Time Exceptions

84.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 84 ICAMU - 5HI ASQ

85.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 85 ICAMU - Tmins to Expire

86.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 86 ICAMU - Value Change Inquiry

87.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 87 ICAMU - Mass Update

88.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 88 ICAMU - Mass Update

89.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 89 Monitoring and Measuring Getting Results!

90.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 90 Inventory Management 10 Step Process The Numbers: 1. Parameters/Setup: –“Smart” –Company/Warehouse –Product Line –Product Master –Product Warehouse 2. Data Collection: –Usage –Lead Time –Level: On-hand and Paperfloat –Purchasing History 3. Forecasting: –Rank –Replenishment Cycle –Usage, LT, Safety, Order Point, Line Point, Surplus Point, Order Quantity 4. Stock Level Accuracy: –On-hand –Paperfloat The Tools - Inventory Management: 5. Replenishment: –Use Priority Reporting –Purchases –Transfers 6. Timeline Analysis: –“Too Late” –“Too Early” 7. Excess/Surplus: –Prevention –Disposition The Tools - Getting Results: 8. Proactive Maintenance: –Proofs –While Replenishing –Exceptions and Mass Updates 9. Measurement and Improvement: –Fill Rates, BO, OTD, Accuracy –Inventory Mix (Safety, Excess, Defective) –Turns and ROI (GMROI and/or T&E) 10. CONTROLLED REPLENISHMENT

91.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 91 Step 9: Measurement & Improvement Customer Service: n Fill Rates/Availability (ICRIF) n Accuracy - Product, Quantity, Price (CM%) n On-Time-Delivery - OTD n Backorder Handling (ICRIN) Profits and ROI: n Surplus - Disposition (ICRIS) and Prevention n Safety Analysis (ICAMU) n Review/Order Cycle: –Freight Dollars - As Percentage of Sales –Turns - Really CtoC and CtoP (ICRIT) –Turn and Earn - ROI (ICRIR) Replace Inventory with Information Do better on both sides!

92.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 92 If there is no measurement, then it is all hearsay. Data-free conversations and decisions will cause lots of frustrations, cost lots of money and result in lots of disappointments...

93.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 93 Service - Fill Rates n How well a business meets its customer’s needs - pulse of customer’s happiness/loyalty. n What to Measure: Fill Rates = Shipped/Ordered Quantity: 9 out of 10 = 90% Line Item SC: 9 out of 10 = 0% Order Ship Complete? n What Should Fill Rates Be? n The Report is Broken - Look at “First Pass” Orders - EDI, Fax, Internet, etc for true fill rates and backorder retention n Only one way to better Fill Rates - The Right Inventory. Two ways to the Right Inventory...

94.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 94 Profits - Turns? ROI? Cost to Carry, Cost to Purchase and Freight C to PTurns 80’s$10.002-3 90’s$5.003-6 00’s$2-3.006-10 EDI/VMI$0.13? Many companies are increasing the turns, but the infrastructure does not support it; bottom line, longevity and growth are all suffering! Customer Service, GM Improvement, Efficiency, Accuracy, Asset Management Profitability Turns

95.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 95 Turns vs Bottom Line Contribution Return 140 150 140 Turns 4 5 6 7 Margin 35 30 25 20 Customer Service Improvement - Availability, OTD, BO Handling Gross Margin Improvement - Sell Service (Price) and COGS Expense Reduction - Freight, Cost to Carry, Cost to Replenish Inventory Management is Not Only Turns… Inventory Management is Bottom Line, Longevity and Growth 7 Turns & 4% Bottom Line or 5 Turns & 7% Bottom Line Velocity Pricing?

96.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 96 Return on Investment GMROI: = Turns CGM% = COGSGM Ave InvCOGS =Sls TurnsGM% =SalesGM Ave InvSales =GM Ave Inv x x x x x x Turns: =COGS + $Transferred Ave Inv T&E: = Turns GM% = COGSGM Ave InvSales No Directs, Non-Stocks or Pass-Throughs How to Use T&E/GMROI

97.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 97 Step 10: CONTROLLED REPLENISHMENT Uncontrolled Replenishment Leads to Uncontrolled Results

98.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 98 Final Thoughts AWOA W

99.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 99 “Better Numbers and Tools” Top 10 Better Numbers: 1. Hits based Ranking 2. Smart Set-Up and Maintenance 3. Usage: Lost Sales and Exceptional Sales, Seasonal Trending, and Roll Up 4. Customer Buying Habits 5. RC and EOQ Control and Depth Better Tools: 1. Paperfloat Control 2. Buyer’s Priority, Targets Properly/Equal Days Supply, and One-Stop 3. Timeline Analysis “Too Late” and “Too Early” 4. Long Term Surplus 5. Exception Control Center and Mass Update

100.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 100 SX.enterprise Summary “Best Practices” Inventory Mgt n Better SKU Coverage - System and Buyers n Improved Time Management n Improved Priority Setting n Balances Technology and Core n Replace Inventory with Information n Rifle Approach vs. Shotgun Approach n Better Numbers and Better Tools n Better Service and Better Profits n Distributor of Choice: Owners, Customers, Employees and Vendors Now What? Go Back, Follow the 10 Steps, Execute and Get Results… The Door is Open!

101.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 101 Inventory Management 10 Step to Results The Numbers: 1. Parameters/Setup: –“Smart” - ICSR –Company/Warehouse - ICSD –Product Line - ICSL –Product Master - ICSP –Product Warehouse - ICSW 2. Data Collection: –Usage - OE/WT –Lead Time - WT/PO –Level: On-hand and Paperfloat - BIIS –Purchasing History 3. Forecasting: –Rank - ICAI –Replenishment Cycle - ICAR –Usage, LT, Safety, Order Point, Line Point, Surplus Point, Order Quantity - ICAMM 4. Stock Level Accuracy: –On-hand - CC’s –Paperfloat - BIIS The Tools - Inventory Management: 5. Replenishment: –Use Priority Reporting - POERA –Purchases - POERR, POEAR –Transfers - WTERR, WTERA 6. Timeline Analysis: –“Too Late” - ICRIG –“Too Early” - ICRIG 7. Excess/Surplus: –Prevention –Disposition - ICRIS The Tools - Getting Results: 8. Proactive Maintenance: –Proofs –While Replenishing - POERA –Exceptions and Mass Updates - ICAMU 9. Measurement and Improvement: –Fill Rates, BO, OTD, Accuracy - ICRIF –Inventory Mix (Safety, Excess, Defective) –Turns and ROI (GMROI and/or T&E) - ICRIT/R 10. CONTROLLED REPLENISHMENT

102.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 102 Back to Basics Many distributors DON’T: n Set the system up properly n Feed the system good data n Understand or Use the system properly n Clean up bad processes and procedures n Educate their people on the system or processes n Help departments work together n Help work towards common goals Yet they think it will all just magically work

103.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 103 The Foundation Plan of Improvement Back to Basics Proactive versus Reactive Replace Inventory With Information

104.   2006 Grant W. Howard Company   Infor, Inc (Sx screens only) 104 J D I It’s too hard to log lost and exceptional sales It’s too hard to keep the paper work clean It’s too hard to keep the on-hand correct It’s too hard to work excess inventory It’s too hard... It’s too hard..., The system is broken or doesn’t have it…, We will never get them to do that…, We don’t know how to do that… J D I !