Managing Bailment Inventory (A Boat Load Of Money!) NABCA Administrators Conference Philadelphia, PA Friday, October 26th, 2007
Outcome (When This Presentation Is Over) Demonstrated the importance of Managing Bailment Inventories Show new NABCA tools for Managing Bailment Inventories Call To Action!
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
Panelists NABCA Amy Grollman Sazerac Company Paul Maier
Panelists Sazerac Company Paul Maier Paul 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.
Panelists NABCA Amy Grollman Amy 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!
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
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
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?
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
Is There A Problem? Er, Yes!
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
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
What Causes The Problem?
Problem Cause? Murphys law? Mercury in retrograde? Supplier neglect? Broker neglect? Control state neglect? Unpredictable sales? Poor forecasting? Communication / Disconnected / Invisible
What To Do About It? Technology Based Solution
Two Solutions Make the bailment inventories part of your own inventory management system Use SAM I AM to manage bailment inventories more effectively
Bringing It In House From the Control States to NABCA From NABCA to Sazerac What happens inside Sazerac
NABCA System File Transfer (FTP) ID MI MT NH PA WV MS Control State Inventory Data Format data to common layout NABCA Inventory Data Warehouse From the Control States to NABCA
NABCA Data feed from West Virginia
NABCA Data feed from Mississippi
NABCA Data feed from Pennsylvania
NABCA Formatted Inventory data in Data Warehouse
Sazerac AS400 Product Exception Report Product Exception Report NABCA Warehouse File Inventory Product File Inventory Transaction File Automated File Transfer Format Trans File & cross ref our item codes Create Category tables Build Cognos data linking in our depletions Cognos Cube
RPG Language Polls The NABCA Computer To Get Data
When We Get The File It Looks Like..
RPG Language Formats Data For Use In COGNOS
NABCA Bailment Inventory Data Viewed Through Our Own System
Right There With Our Other Inventories
Cognos view showing last 5 days of Inventory
Cognos view showing Estimated Days on Hand
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
Using SAM-I-AM Case Study: NABCA
Time to Reorder?
Recap And Call To Action
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
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!
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
Call To Action Control States Provide scorecards on industry performance Provide bailment inventory information to NABCA State NameBailment Data AlabamaNone MississippiNightly West VirginiaNightly MaineNone VermontComing Soon North CarolinaNone IdahoNightly WyomingComing? VirginiaComing Soon Montgomery CountyNone UtahComing Soon WashingtonNone IowaComing Soon MichiganDaily OregonComing Soon PennsylvaniaWeekly OhioComing Soon MontanaDaily New HampshireDaily