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Consumer durables
Production and design: Global Sales and Marketing department IBS, ASW and IBS VIRTUAL ENTERPRISE are registered trademarks of IBS AB, in the European Union and in other countries. IBM, AS/400, iSeries, Lotus Notes, and WebSphere are registered trademarks of International Business Machines Corporation. All other trademarks or registered trademarks mentioned herein are the property of their respective holders. The information contained in this document is summary in nature, subject to change and intended for general information only. The details pertaining to functionality and routines are based on IBS software, post release 5.50. For updates of this information, please contact your local IBS representative. Copyright IBS 2005.
Content
Introduction Market situation and trends
Global economic factors Commercialisation of consumer durables Seasonal influences on supply Customer dynamics
IBS software - a competitive advantage Tailored for the consumer durables industry
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Introduction
In the 1990s, ERP software solutions catered to a broad range of requirements, including manufacturing, order processing, distribution and financial accounting. As the decade drew to a close, many companies had to replace their old legacy software systems with ERP solutions that were Y2K-compliant, while others were caught in the dash to become dot.com-enabled. ERP implementations took much longer than planned, consuming more staff time and resources. The objectives and expectations of many companies were not met, because the ERP functionality did not match specific business requirements without extensive modifications, which had negative impacts on both costs and timelines. Companies have become more cautious with their IT spending, looking for a faster ROI and solutions that are attuned to critical business needs. They now want a payback in less than twelve months, requiring a better fit without time for extensive customisation. What is required is a software solution aligned to business requirements that can actually solve business problems. Companies want to partner with people who really understand what their business is about. This vertical industry brief highlights some best practices and current trends specific to the consumer durables distribution sector. It is directed toward distributors who are faced with industry-specific challenges and opportunities and who are looking for solutions. It focuses on competitive advantages to be gained from a fully integrated, demand-driven business solution specifically designed for consumer durables distribution.
Global indicators: Diverse manufacturing and distribution patterns Production is increasing in line with disposable incomes and health and fitness trends Manufacturing and distribution are spread worldwide Many companies have moved production to Southeast Asia.
The focus that IBS has on the wholesale distribution environment will allow us to move our systems forward in line with our business goals. Lawrence Jennings,
Chief Operating Officer, Enesco
Commercialisation: Film industry closely aligned with toy industry Growth of X Sports sector Product lifecycle management is essential Three-way collaboration between retailers, distributors and manufacturers is crucial Short window of opportunity Sales forecasting is vital.
Product and services management: Two emerging concepts: PLM and PSA Tighter control of time, materials, processes, costs Margin protection along with value-added revenue possibilities Project planning, product engineering and service integrated into supply chain.
Seasonal influences: 70% of consumer goods sold during Christmas season Plans are made 12 months in advance Unsold items are returned Requires extended payment terms Need for efficient receiving and dispatch operations Fast pace requires efficient software solution.
Customer dynamics
Most consumer durables customers are retail operations, both large and small, requiring outstanding service, just-in-time product availability and customised value added services. The customers can be grouped into four main categories: Major retail chains, many of which have separate toy, craft, sport and fitness and jewellery departments Mail order companies which sell through catalogues, direct mail and internet web stores Tele-commercial operations, using third-party logistics (3PL) operations to manage their order fulfilment Smaller specialist retail stores, typically gift shops, toy and hobby stores and jewellery outlets. All expect outstanding service, but larger customers will inevitably get special attention, especially when consumer demand for a new product exceeds supply and some form of rationing is unavoidable. Efficient technology solutions play a key role in catering to the needs of consumer durables customers. Products must be labelled and packaged to customers' individual requirements, including bar coding and retail price labelling. Most of the major retail chains interact with their supply chain partners electronically, via EDI or XML messaging. Customer delivery forecasts (efficient consumer response), purchase orders, pricing and catalogue information, advanced shipment notifications and POD payments are normally transmitted electronically. Wholesale distribution companies that are unable to process business transactions electronically and deliver as promised will not survive in today's competitive marketplace.
Customers demand: Outstanding service Just-in-time product availability Customised labelling and packaging Communication via EDI or XML Consumer demand forecasting.
IBS solution for consumer durables distribution Solution: Software: ASW 5.50+ Modules: ASW DISTRIBUTION ASW FINANCIALS ASW INVENTORY CONTROL ASW NETSTORE ASW SERVICE ASW SUPPLIER MARKETING SUPPORT ASW WAREHOUSE MANAGEMENT IBS BUSINESS INTELLIGENCE Hardware: IBM eServer i5
The system paid for itself in the first year. Chuck Wright,
VP of Operations Roland US
Nautor has had a 15-year association with IBS. When we had a need for new solutions to cope with increased requirements for flexibility and process orientation, it was very natural for us to turn to IBS again. Mikael Still,
Financial Director, Nautors Swan
We can track product now from purchase order to warehouse, to bin location, to customer order - with just a few simple inquiries. We need tools and a good infrastructure to be successful. IBS software is part of that infrastructure, without it, we could not operate as a business. John Henkel,
CFO and VP Logistics, Zwilling J.A. Henckels
Full text notes - These can be entered as either internal or external comments on returns. External text is visible to the customer should they log on to view the order status via web-enabled ASW NETSTORE. Internal text might contain discrete confidential information that the customer should not see. Incident time - The amount of time spent on any incident with each person working on its resolution can be recorded. This information is invaluable when evaluating the true cost of a returns request. Automatic request routing - Requests can be automatically routed to other departments or levels if they require specific attention or if they are delinquent. This ensures that the customer does get the best attention and prompt follow-up to their issues. Return credit updates - When products are returned, credits can be raised and sales statistics updated. These credits can be matched and settled against customer debit notes that have been deducted from customer payment remittances. This process can save time and effort when trying to reconcile customer accounts and their claims. Return batching - Returned products can be batched together for return to suppliers or for resale to secondary markets.
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Warehouse management
IBS software supports advanced, automated warehousing to increase response times, helping to manage throughput velocity while keeping errors and inventory to a minimum. The IBS solution helps you control warehousing operations and inventory levels throughout both the internal and external internal supply chain, ensuring that products can be easily located and dispatched to where they are needed. The automated warehousing solution handles all phases of product distribution, from reception all the way through put-away, picking and dispatch. Specific warehouse management advantages for durable goods distributors include: Full pallet and package tracking with information on inner and outer configurations from reception to warehouse location and out to dispatch. Whether you handle pallets or break-bulk to forward pick locations, warehouse management will help you automate your operations, maintaining visibility of inventory movements and your warehouse staff. Bar code and radio frequency (RF) support - Fully integrated support for bar coding and RF handling automates the recognition, tracking and communication of serial and batch codes. This helps to avoid pick and put-away errors, provide labelling accuracy and, ultimately, promotes higher customer satisfaction. Repackaging and labelling - You can benefit from customer-specific value-added services like repackaging and the printing of customer labels. Simple assembly to dispatching can be handled using order structures. Item serial number tracking provides total support for serial numbered products, required by the jewellery industry. IBS can also provide automated support for servicing or repairs, which helps you keep a complete service history during the lifetime of an item. Full support for inbound shipments and landed costs, as part of the receiving process. Outbound shipment preparation with route planning and shipment documentation enables you to build outbound loads. Both of these functions enable you to move product quickly, helping to avoid bottlenecks during peak periods.
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Procurement
The IBS solution is built to allow procurement on a wide-ranging basis, including strategic sourcing, to help your business secure products at the best price. Coupled with automated warehousing and inventory routines that maintain optimal stock levels, IBS' procurement measures help your business to minimise total supply chain costs through lower inventory holding costs, operating costs and the most efficient purchasing methods. The IBS solution gives you access to advanced purchasing methods, such as automated sourcing categories, that drive down costs through better procurement processes and reduced overheads. The IBS procurement solution includes: Advanced purchase simulation - Based on current information from throughout the system, this analysis helps you to determine real procurement costs. It also gives you the capability for direct automatic replenishment based on the analysis results. Purchase suggestion management - The IBS solution provides suggestion management capabilities with automatic review codes for product lines, helping to ensure accuracy, maximum line value, stock levels and optimised reorder values. Functions include special buy evaluation and interactive line buying to help you benefit from supplier discounts or to fill a container. Automated purchase order creation - Purchase orders can be created automatically, based on system suggestions when user-defined criteria are satisfied. The automated routine enables you to reduce labour costs and errors. Landed cost - IBS software automates the calculation of landed cost, which can be spread over several purchase order lines in a container or a reception. This helps to lower indirect overhead through more accurate inventory costing at goods reception. Advanced RFQ capabilities - Requests for quotations can be generated automatically and sent to suppliers through EDI, XML, web-service communications, fax or email. This quick creation and transmission can result in lower administrative costs, better prices and the ability to negotiate more favourable conditions and agreements. In addition, the IBS solution includes other automated solutions for strategic sourcing, including powerful reporting that helps you to follow up rejected deliveries, back-orders, discounts and prices as well as provide information on supplier lead-times and service level analysis.
The system gives us more timely management data. It allows our managers to identify and react to problems instead of pooling information together and crunching all the numbers to have a report. Mark Hester,
Implementation Manager, Maui Jim
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Service management
IBS provides an all-in-one service solution that handles both field service and internal service maintenance. The software's automatic functionality helps you to schedule and perform installations, preventive service and urgent maintenance both internally and out in the field. On-line call centre functions let you provide immediate responses to customer service requests. On-call engineers have instant access to all service information needed for the job, with the ability to enter reports and invoices from customer sites. Support for replenishing van inventory (work tools and spare parts) helps to ensure high levels of job quality and customer satisfaction, as well as reduced return visits. Transparency, scalability and easy-to-use features let your company integrate its service operations with the entire system. The IBS service solution includes agreement and warranty handling, extensive CRM functionality, graphical tools for resource planning, office-field entry and information updating, service kits handling, resource planning, flexible pricing and charging methods, advanced follow-up capability, time reporting and communications with EDI, XML, web services and other methods.
Financials
Consumer durable goods suppliers must be able to analyse costs and margins by customer and product. Complete accountability and control of internal and external costs and billable revenue is also vital. In addition to comprehensive General Ledger, reconciliation and banking functions, plus powerful reporting capabilities, ASW FINANCIALS handles specific problems that can help you improve your profitability and cash flow: Accounts receivable - Automated routines help your credit controllers manage their average days debt outstanding and their cash-tocash cycles. Automatic G/L journal creation. Every time inventory moves or changes in value, from receipt to sales and service, invoicing will trigger the creation of a G/L journal. Physical inventory will always reconcile to G/L stock. Invoice registration and authorisation with three-way supplier invoice matching, including matching of landed cost items. A/P payment scheduling to pay on time by cheque or electronic transfer, updating the cashbook for easy bank reconciliation. Full VAT analysis and reporting, country specific Intrastat reports, including plant and machinery movements across borders, and quarterly sales reports. Processing debit claims through the A/R ledger for returned product, without slowing down the cash posting and allocation process. Debit notes can be automatically cleared by credits raised when product is returned to the warehouse and examined.
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Business intelligence
IBS BUSINESS INTELLIGENCE uses information from throughout the system to
let you mine and use all the day-to-day transactions, suitably summarised to make the best informed decisions. Accurate, timely analysis is critical to the decision making process. All transactional information in the IBS data warehouse can be analysed according to your own requirements. IBS can deliver business intelligence to your desktop and lets you easily distribute reports and graphs to your organisation. The IBS solution includes many useful features to help you analyse and measure your business to the fullest: Customer and product net margin analysis, ranking your customers according to the contribution they are making to your profits. The cost information is generated as a by-product of daily transaction processing, so that costly, time-consuming, activity-based costing exercises can be avoided. Measure actual performance trends against set targets and industry standards, providing real metrics KPIs and ROI. Critical Success Factor panels provide a graphical and numeric presentation of current vital business factors. It can be used to monitor time-sensitive information such as number of sales orders entered today, orders on credit hold, aged debt balances and critical stock balances. Management Report Writer enables you to construct your own reports, which can be viewed on-line, letting you drill down to the underlying details and the original source documents. Single click download to spreadsheets, conversion to graphs or HTML format for emailing or web publication.
ASW has proved to be very flexible in coping with our ever-changing requirements. Mikael Leckstrm,
Logistics Manager, Duka
IBS has the right software for you, and the experience of worldwide installations. Are you interested in finding out more? Contact IBS today - consumerdurables@ibs.net or visit www.ibs.net
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IBS is a world leading provider of supply chain management solutions for distribution, demand-driven manufacturing, financials and business intelligence. IBS delivers measurable value through software solutions, services, hardware, outsourcing and financing. IBS offers industry solutions for electrical products and consumer durables with Cartier, Maui Jim, Maxell, Miele, Roland, Royal Scandinavia and Scribona among its 5,000 customers in 40 countries.