Smart Inventory Planning Optimization Solution Overview Smart Inventory

Smart Inventory Planning & Optimization: Solution Overview

Smart Inventory Planning & Optimization IP&O Platform includes: • Demand Planning • Inventory Optimization • Operational Analytics • ERP Integrations • Hosted by Amazon (AWS) 2

Platform functionality • • • Common Data Model Auto Item Classification based on volume and frequency User Roles & Authorizations Job scheduling to manage import/exports Multi-Language ERP Integrations System Configurations Custom Groupings Alerts 3

Smart Demand Planner (SDP) • Automatically Forecast Demand • Account for trends, seasonality, intermittency • User Overrides and User Defined Methods • Multi-level Hierarchical Planning • Import Forecasts from external sources • Collaboration & Consensus Planning • Reporting vs. Actuals • Role Based Authorizations & Access 4

Smart Inventory Optimization (SIO) • • Predicts metrics and costs associated with current planning parameters Calculates optimal planning parameters based on “total lowest cost” Recommends optimal service levels targets Develop, share, and compare collaborative “what if” scenarios Identify exceptions when chosen policy will yield different metrics and/or costs Auto tracks exceptions between actual ordering and planned ordering Exports min/max, R/Q, Safety Stock to client ERP Role Based Authorizations & Access 5

Smart Operational Analytics (SOA) • Monitor actual state of operations • Measure Supply Chain KPI’s such as service level, fill rate, time to ship • Measure and Compare Supplier Performance • Identify Excess/Shortage/Order Cancellations/Transfers • Analyze inventory levels and metrics over any time frame • Custom Reporting within days • Exports all report in variety of formats 6

Demand Planning & Inventory Optimization Workflow Service Level Targets, Inventory Budgets Business Knowledge Statistical Forecasting Collaboration Inventory Optimization Consensus Forecast SMART INVENTORY PLANNING & OPTIMIZATION Orders, Receipts, Shipments, History, Inventory Levels, Inventory Policy ERP Current Safety Stocks and Min/Max Optimal Forecasts, Safety Stocks, and Min/Max 7

Why Smart IP&O • Automating business processes is not enough to compete in a data driven world • Winners leverage their data for prescriptive solutions to core business problems. • Smart IP&O provides data driven predictive & prescriptive analytics proven to: Reduce inventory - Improve service levels - Provide Executive visibility and Control over Demand Inventory Planning 8

Simulate Replenishment: Don’t wait and See Automatically Simulate demand replenishment cycles to stress test existing policy and predict metrics • • Service Level Fill Rates Turns Average Inventory Value Holding Costs Ordering Costs # Orders Is performance/cost acceptable? If not, optimize 9

Why Smart IP&O It is mission critical for managing inventory • You use ERP to generate anywhere from dozens to hundreds of order recommendations, material transfers, and production jobs each day and these suggestions are based exclusively on the forecasts & Min/Max/Safety parameters • You must calculate these values for MRP to work and likely rely on rule of thumb methods in ERP or manual approaches in Excel. Poorly calculated planning inputs contribute disproportionally to excess inventory and poor customer service. It also contributes to a lack of trust in the ERP outputs with buyers interrogating the system to “double check” each order substantially reducing employee productivity. 10

Smart Operational Analytics (SOA) • • Monitor actual state of operations Measure Supply Chain KPI’s Measure and Compare Supplier Performance Identify Excess/Shortage/Order Cancellations/Transfers Identify Items likely to breach Reorder Points Analyze and trend over any time frame Custom Reporting within days Exports all report in variety of formats 11

Driving Business Value • Complements Epicor ERP system – seamless integration • See results in 10 -12 weeks • Fills a major need for organizations that struggle with § § § Proactively shaping inventory to achieve desired metrics Measuring actual service and delivery performance Predicting future inventory costs, orders, and performance Assessing the potential impact of policy changes Understanding how inventory got to where it is today Customers see a 10 -25% reduction in inventory and a 5 -20% increase in service level © Smart Software, Inc. 2018 – Proprietary & Confidential 12

Forum Energy Technologies Smart. Forecasts impact • 15 -20% average revenue growth with no increase in inventory • Increased Inventory Turns from 1. 8 times to 3. 0 times “Smart gives us good information to work with. The service level planning method has led to productive conversations between sales and supply chain and given us a common ground from which we base our discussions. People are feeling comfortable with numbers, and through our S&OP process we’ve been able to create buy-in across the company. ” - Rod Cardenas, Purchasing Manager, Forum Energy 13

NKK Switches Smart. Forecasts Impact • Provided Demand visibility to Suppliers enabling suppliers to build to forecast • Reduced supplier lead times 50% • Reduced lead time to customers • 15% reduction in inventory “Its easy for us to give suppliers information they never had before. Our suppliers can plan their production and work with their suppliers. That visibility has been invaluable. That’s where the real payoff will come. Not just reducing inventory or saving time on people managing the inventory but being more responsive to customers’ needs. To me, that’s the overarching benefit of this software” Bud Schultz – Vice President of Finance 14

Rev-A-Shelf Smart. Forecasts Impact: • Significantly increased return on inventory assets: 22% sales growth with just a 4% inventory increase • Maintained 99% Service Levels during a period of growth “Smart gave us the analytical tools necessary to make informed decisions rather than taking a best guess approach. Overall, it allowed us to condense hours and hours of inventory calculations into minutes simply by changing parameters within the system, enabling us to do scenario analysis quickly and efficiently. ” John Engelhardt - Director of Purchasing 15

CR Laurence Smart. Forecasts impact: • Inventory Reduction of 5% despite expanding product line • Inventory Reduction resulted in ~ $400 K in first year saving • Stock-outs occur less often, since the trends are properly picked up “Smart enabled us to apply appropriate inventory model to each SKU, rather than the simple averaging method we used to use in the past. Moreover, with the intermittent demand we have for many SKUs, the software helped us make a more accurate forecast and resulted in fewer stock outs and lowered our carrying cost. ” Mazdak Vaezpour – VP of Manufacturing 16

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