Summary Results • 2015

Vendor Managed Inventory Strategies

Summary Results • 2015

Program Overview

Between February and March of 2015, Gatepoint Research invited selected supply chain, logistics and operations executives to participate in a survey theme around Vendor Managed Inventory Strategies.

Candidates were invited via email and 100 executives participated.

Management levels represented were predominantly senior decision makers: 6% held the title CxO, 45% were VPs, 47% were Directors, and 2% were Managers.

Survey participants represented firms from a wide range of industries including General and High Tech Manufacturing, Retail, and Wholesale Trade.

Responders worked for firms with a wide range of revenue levels: 73% were from FORTUNE 1000 companies, another 20% work for companies in the $500 million ‐ $1.5 million revenue range. 4% were from companies $250 million to $500 million; 3% work for companies with under $250 million in revenue. 

100% of responders participated voluntarily; none were engaged using telemarketing. 

Summary Results • 2015

Observations and Conclusions

Vendor Managed Inventory (VMI) is not in use at all by 28% of survey respondents.

Using VMI on both buy‐side and sell‐side is relatively rare. Only 27% of those surveyed report this capability; most (51%) apply VMI only on the buy side.

A third of respondents rated their visibility levels between “average” and “none.” “Great” visibility into current inventory levels is only claimed by 26% of respondents.

Only 21% report B2B integration between inventory systems. Inventory information‐sharing between partners is usually limited to ERP or manual methods. 

33% of those surveyed felt their inventory management system achieved optimum cost and service levels.

59% report inventory turns are only on par or worse than industry averages.

There’s demand for better inventory management collaboration. Among those surveyed, 31% reported collaborating “poorly” or “not very well” with trading partners.

Summary Results • 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

What types of Vendor Managed Inventory (VMI) are you currently using or planning to use?

Almost half of respondents report their VMI strategy as “consigned inventory at buyer’s VMI location.” 28% had no VMI at all.

49%

30%

18%

16%

6%

6%

4%

0% 10% 20% 30% 40% 50% 60%

Consigned inventory at buyer’s VMI location

VMI at third‐partylogistics provider hub

Unallocated inventory stock at supplier “virtual” hubs 

None and no plans to implement

None, but planning to implementin 6‐12 months

None, but early stages investigatingoptions 0‐6 months

Other

Summary Results • 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

Where in your supply chain do you employ VMI programs?

Buy-side VMI programs outnumber sell-side programsmore than two to one. Only 27% employ both.

Buy-side with suppliers

51%

Sell-side with fulfillment partners

(distributors, retailers, etc)

22%

Both 27%

Summary Results • 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

How do you rate the visibility into your current inventory levels?

33% of survey respondents had none-to-average visibility into their current inventory levels.

4%

9%

20%

32%

26%

0% 5% 10% 15% 20% 25% 30% 35%

1

2

3

4

5

NO VISIBILITY

GREAT VISIBILITY

Summary Results • 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

How do you and your partners share inventory information?

Reliance on ERP systems or manual communication to share inventory information with partners is typical. Just 21% have moved up to B2B

integration between systems.

45%

44%

21%

14%

5%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Directly via our ERP system

Manually – email, fax, etc. 

B2B integration betweeninventory systems

VAN or other data network

Other

Summary Results • 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

For these types of information, how timely is the informationthat you and your partners share?

While 53% can share order information on a daily basis (or faster), two thirds can’t share daily forecast info.

34%

48%

53%

0%

10%

20%

30%

40%

50%

60%

Forecast Inventory Order Information

Daily batch (or faster)

Summary Results • 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

Assess your ability to manage inventory levels.

A range of inventory level problems were reported…only 33% felt that inventory levels reflected optimized cost and service levels.

36%

33%

29%

20%

20%

13%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Too much cash tied up in inventory

Costs and service levelsare optimized

Too much excess and/orobsolete inventory

Effective but too costly

No frequent stock‐outsand/or low service levels

Don’t know

Summary Results • 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

How do your inventory turns compare with your industry average?

For most respondents, inventory turns are only “on par” or “worse” than industry averages.

On par48%

Better24%

Don’t know17%

Worse11%

Summary Results • 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

How well do you collaborate with trading partners on inventory management processes?

31% report below-average collaboration results with trading partners.

12%

47%

26%

5%

9%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Very well Well Not very well Poorly Don’t know

Summary Results • 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

Profile of Respondents:Industry Sectors

Together, retail /wholesale trade and manufacturing (high tech and general) comprise 83% of respondents.

Mfg - General28%

Mfg - High Tech28%

Retail Trade16%

Wholesale Trade11%

Other 4%Mfg - Primary

4%

Mining3%

Telecom Services3%

Business Services

1%Financial Services

1%Healthcare

1%

Summary Results • 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

Profile of Respondents:Revenue

Almost three-quarters of survey respondents work for FORTUNE 1000 companies.

<$250 million3%

$250 - 500 million

4%

$500 million -$1.5 billion

20%>$1.5billion

73%

Summary Results • 2015Copyright © 2015 Gatepoint Research. All rights reserved. The information contained in this report is the sole property of Gatepoint Research and may not be

used, reproduced, redistributed in any form including, but not limited to, print and digital form without the express written consent of Gatepoint Research.

Profile of Respondents:Job Level

92% of those surveyed were senior management.

Manager2%

Director47%

VP45%

CxO6%

Summary Results • 2015

E2open is a leading provider of cloud-based, on-demand software solutions enabling enterprises to procure, manufacture, sell, and distribute products more efficiently through collaborative planning and execution across global trading networks. Enterprises use E2open solutions to gain visibility into and control over their trading networks through the real-time information, integrated business processes, and advanced analytics that E2open provides.

E2open is headquartered in Foster City, California, with operations worldwide.