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Webinar On Demand
Recession Proofing Your Supply Chain
The chaos of the pandemic years and the resulting supply chain crisis have made predicting customer demand more challenging. In this webinar, we discuss both tactical and strategic paths to supply chain resilience. Maria Marchesi, Sr. Solution Advisor and Chris Marshall, Director of Professional Services will share real techniques that GAINS customers have used to help manage the higher rates of volatility, disruption, inflation, lead time extensions, interest rates affecting working capital and inventory, etc.
Speaker 1 (00:02):
Good afternoon, everybody. Welcome to our vendor presentation today by GAINSystems. Couple of things I need to let you guys know before they get started. You are muted. You will be muted throughout the whole entire session. We’ll have time for questions and answers periodically during the session. So if you think of anything, just go ahead and type it real quick into the questions box. Or you could also type it into the chat box and send it to the organizers and panelists only, and we’ll see it in real time. All right, that’s all I need to let you guys know. So I’m gonna let them go ahead and get started. Thank you.
Thank you, Susan. So I’m glad to be here. Thank you for the opportunity. We are presenting in name of GAINS. My name is Maria Angelica Marchesi. I am on the product team, product management, and I’m co presenting with Chris Marshall. He is part of our professional services team. It’s one of one of our directors and very experienced guys. So if you want to know everything about GAINS, he is one that you can contact from experiences with customers directly. So we want to share with you something about recession proofing the supply chain. So this is a topic that, it’s a trend topic. All of us had seen what are the things that have changed recently and then all the opportunities that we have as supply chain professionals in how we can provide more resilience to our companies within the supply chain network. So we are going to share one methodology that some of our customers are adopting, and we have really good success about this. Also thinking that all this changes in the past years and, and recently time also about the raw material, shortages and the unprecedented supply delays. And all this disruptions are also opportunity to change the way that we have work and to really get more value of our profession and the opportunity that we have to provide a different perspective to the stakeholders within our companies.
So this specific framework has four stages. The first one, and it’s where usually most companies begin are, is talking about how do you really react to the change. So this is happening really a lot of changes that you are not expecting and you don’t know how to manage. So the first stage to begin flesh and resilience is just to learn how to react to those. How do you really begin to far fight all the things that are changing and that you didn’t have the tools to react. So when you begin that like reaction cycle, the first thing that you begin to realize is that there are changes in the demand. So how are you really understanding the declining of the demand, those strengths but also sometimes just declining, but it’s also a higher demand in some SKUs. So Chris is going to share with us some of the tactics that our customers have used within this first stage.
Yeah, thanks Maria. So we’re gonna walk through a few tactics that quite a few of our customers have actually already used are in the process of using. These are gonna be levers that are readily available within our software. Might be available just in general outside of the software. But in games we’ve recommended a few things that such as determine those higher risk uses, deployment rationalization, skew rationalization in order frequency hedging. These are all tactics that we can actually address real time. There, there this rapid fire reaction, how can you do it strategically still versus doing a knee-jerk reaction, having some kind of planned intelligence behind everything. So the first one is determining higher risk skews. This sort of relates to your segmentation as it is. A lot of times during ABC classification, you have your A items trying to hit a certain service level of 95, 98, your B items, maybe 90% C items, et cetera.
And you create this segmentation. And a lot of times that segmentation is simply based on sales velocity or a frequency of hits or a weighted average of that is a pretty common approach of how we see a lot of our customers determining what service stock and stock and policy should be assigned for a given skew. Now, one thing that you could change when you go into this process, when, especially during a recession or declining in demand or more sporadic rare demand, is add in some additional classification or attributes such as what is your diversification of the customer demand of a given skew. You might have one skew that is one of your top performers maybe top 10%, but it’s really driven by one or two customers versus you have another customer that might be a little bit less sales, but is a very well diversified view.
And it goes from different customers, different industries, different areas in the US or even global. It’s gonna be that kind of aspect that we want to actually sort of provide a higher ranking to higher ranking sense that those should have higher service levels. There’s actually less cost associated with holding it. And by cost I’m gonna be talking about obsolescence or disposal risk. That is a very common cost that comes into our caring cost calculations. So when you start factoring in customer classification or diversification, some a skews maybe should be penalized because they’re no longer, yes, they’re higher high sales but there’s only one or two customers, and so you have a lot more risk there if that one or two customer all of a sudden stops buying, yes, they’re selling a very high clip if they, if just they stops buying it, all of a sudden that a item becomes a C or D.
And that’s a lot of risk when it comes to obsolescence. So we wanna penalize that more. And so adding this additional segmentation, this view, gives you a better and more robust ABC classification when, especially during times of recessions or declining demands we have that gained
quite a bit of technology or abilities to be able to create that segmentation. We create customer hierarchies, customer groupings, and this could all then give you that visibility of this skew has x amount diversification, this skew has y amount of diversification, and that metric is easily implemented into this ABC calculation. The other thing here that we wanna talk about was collaborating with sales marketing to identify truly what is a high risk skew, what might be a skew that is medium velocity or slow velocity might have a lot more importance when it comes to sales or marketing. If this is sort of like your, your bread and butter, yes, it might not be selling a whole lot, but it sort of your, the one SKU that you really use in marketing presentations or other aspects that this skew cannot go out of stock.
You can also incorporate that kind of information by working closer with your sales and marketing team of knowing what are those higher risk skews. The other aspect we wanna talk about is deployment rationalization. I think this is a pretty common trick if you will, that during times of more of lower sales of sporadic sales, that in general the entrenching of your your stocking policy is a pretty common aspect. So rather than having stocking policy at every single branch you might want to consolidate that into one hub or DC and we see a general rule, I think statistics as well as some other some reports show that it is close to a 30% reduction service doc requirements if you start centralizing your your service doc into one comment allocation. One thing to think about this is that if you have 10 different branches and each branch has very sporadic demand for the same skew and you have to hit a certain service level, you might need a hold quite a bit of service stack at each branch to make sure that you get a 95% service level at each one of those branches.
But by consolidating into a hub, you’re diversifying that risk when it comes to location, yes, it might be sporadic here in this branch, sporadic in this branch, but at the hub level it’s gonna be much smoother demand, much more predictable demand. And when it becomes more predictable demand, you have to, you can hold less service stock. So we, we typically see that as a common move is to deploy the service stock policy closer to the hub and away from the, the edges or the branches. One way of doing this is by increasing or carrying costs, what we talked about before for those higher risk uses this would be another trick for certain branches saying there is more of a obsolescence or disposal risk when trying to hold service doc at an individual branch because all of a sudden you don’t have 10 units every day day, you might be only having 10 units every week, and that becomes much more sporadic and much more prone to having a risk that sales or history or forecast is dying out.
So by increasing the caring cost that risk of obsolescence, it’s gonna naturally drive your process to say, we should not stock at this location. It’s too expensive to do that, and that’s gonna drive it naturally to say you should have better stock and policy at the hub. So this could either be forced via a network design, but obviously during these rapid fire moments where you’re just trying to put out fires a quick and easy way is just updating that caring cost at the branch to drive that type of behavior naturally. The other point here is skew rationalization, again, just like deployment rationalization, where there is a benefit of having sporadic demand across several different branches and having it smoothed out via one common DC or hub. You can think of it the same way of skew rationalization you might have, and this is gonna be a very sort of a high level approach here, but I would say you have one SKU and it has 20 different colors.
Each color might have its own sporadic demand, and that becomes even more problematic when demand itself is declining even more. So one way to centralize that demand and make it a little bit more predictable about how much service stock you should have is by rationalizing your selection or your, your product line. So one SKU might be replaceable for another sku, and if you can determine that you don’t need a held service doc for two SKUs, you can hold service doc for just one. Sometimes we even see scenarios where you have two SKUs, one is slightly more premium, there’s a slightly better profit margin. Ideally you would wanna sell that, but there is a benefit of saying, you know what, instead of holding service stock for that higher profitable skew and holding surface stock for the slightly mid-tier skew of that variety, it might make sense to really just have service stock for the higher one and fulfill that mid-tier demand with inventory out of your higher profit margin skew.
Yes, you might be losing margin there, but we’ve seen actual benefits by having that centralized service doc being able to rationalize those two skews into one inventory position. So yes, you might be losing margin on one side, but you’re reducing the risk when it comes to general obsolescence inventory policy. And more importantly, you’re saving time and amount of management hands on activities of having, ordering, trying to put up fires because you are centralizing it and that becomes more predictable, less ordering, et cetera. I used to work in, in a business where we looked at assortment optimization where you have limited amount space in your shelf and based on that shelf, what are the skews that you should have? And this really comes into that skew rationalization cuz the common example is milk. If you go to the milk aisle, you have 1%, 2% whole milk, skim milk, soy milk, strawberry milk, chocolate milk.
Given the allow space, you might wanna say, let’s remove strawberry milk cuz it’s minimum STAs. It doesn’t actually add a whole lot to the revenue when in all actuality, it’s sometimes better to just actually condense and consolidate that 1%, 2% milk and only offer one of ’em. You don’t lose additional sales because usually people are not gonna walk away if there’s not 1% milk, they will get to 2% milk, strawberry milk, chocolate milk. And now this is sort of a, a story here, but it’s chocolate milk, strawberry milk, those are additive sales. Those are, are their own segmentation. And so it’s actually beneficial if you need to consolidate and focus on which skews you want to actually hold stock for. It does make sense to rationalize in this example one or 2% milk because you can replace them in the demand and use the same inventory source.
So that’s just an example for that. I think it really hit home when I started working through that project. And so hopefully it gives you a little bit more familiarity with this kind of tactic. Finally, we have order frequency hedging. One trick here is that’s obviously if, if there’s a spora demand, declining demand, you don’t wanna be committed to very large orders by increasing your caring costs, that’s gonna naturally say, Hey, it’s pretty expensive, the whole lot of inventory, and that’s gonna drive a little bit more of an order frequency. But what you should also use this as an opportunity is to reevaluate your default fault order sizes. A lot of times minimums or increments have just been legacy based. That’s when you started implementation. Some we put that in, they made an override and a lot of this data was just there because it was put in years ago and during times that are very profitable, when their demand is booming, this kind of issue is not exposed.
It’s like, fine, we’ll we’ll order for 1000. I I’m not sure why we need to, we don’t need to anymore, but it’s not something that you need to clean up at that time. But when you get into a scenario where you’re really being stressed tested, this is a quick win because we’ve seen a lot of customers, they look back at the minimums or their increments that they’re using and they start saying, you know what? We were just always ordering to that because that’s what was in the system. We don’t actually need to do that. And that helps reevaluate and quickly adjust it. So sometimes data cleanup is a very big win here. So these are key tactics when specifically coming to declining demand in Maria going to the stage one B. Thank you.
So talking about demand, usually people get, the first word that they get in their minds is forecast and, and why forecast is important. So we also wanted to share the tactics because for GAINS really the, the vision is to allow the people to actually take short term actions to ensure an agile response to those fast moving events. So that, that’s our all concept around the man. So moving forward to the stage one B, it’s the demand is not the only thing that is changing right now. We only, we also need to react to this cost changes and inflationary pressures that just changes the way that we sell the cost, the way we buy, the way we make all the negotiations, and how we can really begin to adopt our supply chain network based on those new factors that before maybe they change twice a year, but now those changes are more frequently and unexpected. So this is part of the one B stage where you also need to react to those costs.
Great, thanks Maria. So we’re gonna go through a few tactics here. Again, these are tactics that can be done immediately so you don’t have to do additional scopings. These are options least within GAINS what you can do. And so we’ll, we’ll walk through how some of our customers are handling these inflationary pressures. And the first one are doing selective bulk buys. We have ways of identifying good opportunities, strong opportunities for this. And we do this by looking at the demand variance is low. So obviously if you’re gonna go out into the future and you’re gonna be going, you might only need 1000 units within lead time right now, but there might be a benefit to ordering three four lead times from now just to bring in net inventory and capturing the current right before an inflation keeps on going up, reducing that certainty.
And sometimes you get benefit from the supplier by being able to commit to these type of bulk buys. So A, you might get price discount. B, you’re locking in a certain cost right now without having to worry about the certainty going on with inflation. And then d like these are gonna be things where having that inventory is gonna be very good because as other customers might have struggle with opportunities with, with purchasing down the road, you have that inventory available. So when we have identifying high diversification items we’re talking about, these are more predictable. You don’t have to worry about demand of sudden dropping off. We look at specific amount of air, we look at it dollarized and we say, Hey, if this is a pretty consistent low air skew, this is very low risk because the demand that we’re forecasting three or four months out beyond lead time is fairly consistent.
We don’t have any concerns of it dropping off or we haven’t seen it historically, or there’s additionally no signs of it. This might be somebody you wanna still work with, your, your, your sales and your marketing team as well as your budget team. But this is something that historically we can get some and gleam some information from it. So characteristics of this are just demand variances. Low growth is obviously greater than zero. Life cycles are long. We don’t want things to have short life cycles, but then also prices are rising right now. And again, by being able to capture the current cost. Now inflation might go up and down a little bit, but it’s more of that stability of having to remove that uncertainty, that risk. That’s gonna be a massive thing. And you will also get benefits of GAINS both by probably transportation costs when it comes into it, as well as maybe getting a price discount as it is by doing a certain amount of bulk buying here.
The other aspect here is net observed inflation from carrying cost rate. So the way I look at this is that if inflation is greater than interest rates, you wanna take the net of that and actually reduce your caring costs because it’s, there is a benefit of locking into the cost right now, sort of look at it as an opportunity cost. If it was the other way around where there’s deflation, there would be a benefit of holding off. And so you would wanna make it more expensive to be purchasing now, but as it gets more and more expensive in the future, you wanna be able to drive GAINS to say, Hey, it makes sense to hold more inventory and to purchase more inventory. And the quick way here is by decreasing the, the caring cost rate for a given skull at a specific location. And when I say skull, it’s skewed by location, but this is something that is not gonna be uniform across all items.
So in GAINS, you can do this at a skull level. So again, your SKU could be in one industry or one have one different customer base at another sku. They might all have different inflation pressure. So you can actually drive this kind of caring cost at the skull level. Geographically too, we have global customers, inflation is different at different locations, so being able to pull that lever at different branches, different locations at the skewed level is also a very useful process to drive your inventory levels previous for seasonal or project driven products, this is similar to selecting both buys, but it’s also looking into the future saying if the season’s coming up and it’s outside of lead time, it still might be beneficial to take that consideration saying, you know what? I’m gonna actually pull in that order that is not only gonna purchase maybe a few weeks from now, a few months from now.
Take advantage of that opportunity if you know it’s gonna be a large purchase you might as well do it. Now, again, this is gonna be for more a little bit more predictable seasonable items, but this will also be for project driven products. And this is why it’s important to, and it’s gonna be the last point here, a multi enterprise vertical collaboration is to really have a good relationship with your customers, gain that information on product driven products. So finding out that this customer’s gonna have a large project coming up, having that kind of communication so that you know that it’s gonna be very pivotal because if you have that kind of conversation dialogue, you can get ahead of it and start ordering today rather than having to find out when it sort of a knee jerk reaction again when they first send it. So always build your relationships. This is gonna be one of the talking points in the next few stages. Things that might not be able to be built right away, but something that you can plan for in advance or start laying the infrastructure in advance before the next downturn or any other demand changes occur.
So let’s say that you adopt a solution and also with all the internal process you get to this stage where you have everything handled from a tactical perspective, you now know from a short term how to react to those changes. Well, now you need to think about strategic way to have a more flexible supply chain so you can really react to all these changes. So the first stage within the strategic base is this of integrate and streamline operations. This is around internal team collaboration to manage a proactive response. That’s the key of all this stage. To do so, the idea of this framework is that you begin to address the extreme operations, the extreme disruptions. So begin to identify what is the risk of those changes that are the ones that are going to impact the business the most, and to really begin to take out actions based on that.
So for example, begin to order components that are riskier earlier than you used to to do or to allow extra time for delivery for a specific or keys modes of transportation or maybe specific providers that are more exposed to that risk. Also begin to think about risk scheduling activities that are, that overcome, expected, the short ages. So understanding really what it’s, where it’s going to be, the impacts and how to address those. But these are very pointed as I mentioned, the extreme piece is the specific, because this is the first step to really begin to think about other tactics that we are going to, to talk leaders. So based on that, Chris, I’m, I’m going to let you talk about this.
Great. Yeah. So the, the first source of value here is gonna be the enabled internal collaboration alignment. And so what we’ve seen very successful customers of ours handle is they’re, they’re having these committees where it’s not just a supply chain group that have talk about history or forecast and everything like that. There’s actually what we call sort of a, a network of sort of, if you think of the, your spinal cord, it receives all the information throughout your body where it’s looking at not just supply chain, but it’s also bringing in hr. It’s bringing in your sales team, your marketing team, your finance team, and getting inputs from the entire organization. Something as simple as just the sales team seeing sale is decreasing ahead of schedule. They’ll be able to get that activity much sooner. They’ll be able to provide that kind of information that maybe your supply chain might not be as reactive right now.
Your supply chain groups, your planners, your buyers, they might just say, oh, history looks fine. They don’t have visibility maybe to the feel of what the sales team is seeing, which is that they’re looking at orders a month, two months, three months in the future, trying to drum up that business. They have much better or a little bit, they’re much closer to that sort of, that signal, if you will, of whether there is is a downturn or upturn. So bringing them into the table and having their input is a very important budget purposes. If you hear that the budget is saying, oh, we’re we’re already being constrained based on these levers, these levers, et cetera, that’s another valuable input for understanding how should you adjust your forecasts based on their information, their visibility that they’re seeing. And a little bit, sort of a lesser thought of is hr.
HR has a lot of visibility to whether there are internal struggles, if there’s a retention issues, if there’s people are leaving, if there’s those kind of aspects. And they can also provide a feed into what does the outlook look like. Are we gonna be constrained internally? Are we at risk in other areas? So so HR is a very valuable, useful, but the whole purpose of this is bringing in people who might not be purely supply chain related, but having them bring into that not only supply chain is just a centralized area that you’re exposing the knowledge across the entire entire company. And I think not only would the entire company get better benefits as also supply chain, the forecasting side of things, we’ll be able to get information from maybe lesser used resources within the company. The other one here is enhanced decision making within insights and specific range scenarios.
So within GAINS, we have many different ways to create these type of scenarios. After talking with the maybe your internal collaboration from budget, from all these sales activities, you might say, well, right now, sales activities, things that there might be a dip between 20 and 50% in our forecasted sales based on what they’re hearing. So based on what you get from your your group conversation, you might wanna set up a scenario where you want to test what would happen if I were to decrease 20%, 50% x amount within certain product groups. This is really stress testing your, your different capabilities, finding out which product groups, which raw materials are at risk. The other things that this will help test is not only on your demand side to see where your demand’s gonna be reallocated, it’s also gonna be testing your supplier your supplier and your supply chain network.
If you were to increase demand, would your the lead times, or if your lead times were to actually go longer or become less, how would that impact your inventory positions? So if your lead time offset went from five weeks to 10 weeks, how much are you at risk? If that component was falling into one finished good or if that component was falling into a hundred finished goods, this kind of stress testing will show you which components are probably the most valuable or most at risk. And that might a tell you you need to have a better stocking policy for that service stock to buffer for varying links of the time that might change. Or b, it might show you, hey, you should have a backup supplier in this case just in case if, if one supplier goes down, you would have a backup. And we did this actually with one of our customers where especially that was, it was based in Asia and they were their manufacturing plant was in Japan.
And so there’s a lot of obse, some weather that could cause issues over there. And they actually had a down period, I forgot which year it was, but they were immediately exposed to that manufacturing plant down, went down. That manufacturer was a sole supplier for key components across many different finished goods. And so they were able to see what would their actual revenue impact be if their manufacturer was down for one week, three week, five weeks. And we can do this instantaneously. We have the entire bill material, we have everything of how the components are tied, and so we can easily run these scenarios of how many weeks of supply or how much revenue is at stake if a supplier goes down for a certain amount of weeks. So we have a lot of flexibility on how you run these simulations. The key ones that we typically see is what happened if costs increase, what if the time changes either expands or decreases?
And this really gives input onto supplier analysis. And our final thing here is optimizing inventory strategy. This is really, this really shows or encompasses a lot of the findings that you’ve already come across, either through the tactical changes. So after you go through all these tactical changes, there might be a reevaluation of what went right, what is actually something that we should keep, or what things should we actually let go back to the pre rationalization. If you see that demand was sustained after doing a lot of your product or branch rationalization, maybe you should just keep it there. If there’s, if there wasn’t any complaints or any kind of service level drop or any kind of demand, that might be something that you could keep as part of that policy. If you do see that demand did go down as part of this rationalization, then you might wanna reroll it back and also do more product offerings.
But learning which products were good to be rationalized together, this is a good process of just reevaluating your product line. As I mentioned before, during the times of good years, your, your product line might have a lot of gaps in it. It might have a lobby and efficiencies, but they’re all masked because they’re not stress tests. You’re selling well, you don’t have any inventory issues. But immediately, once demand goes down a little bit, you start getting exposed to a lot of different areas that you were sure sort of taken for granted before. So this take a benefit in learning from this, this time period and finding out what kind of consolidation is needed. And really you don’t need to expand back if, if, again, if you don’t need a certain item because everybody just went to the other item anyways. Finding out that kind of analysis as very important. So try to as this at the very sub title here says, no, let no crisis go to waste. Try to learn something from this. Take those findings, reap reevaluate product line your supply chain and go from from there.
Thank you, Chris. So also a key part for this stage is that people realize that they need more resources. And one way to get those resources and increase efficiency is through automation. So the first steps to go really and automate your supply chain operation, it’s within this specific phase where you begin to understand what are the rules that you can automate or what are like the really stable SKUs or suppliers or things that actually a human, it’s not adding any value and you just can put a computer, make the, the homework. So this is also key because in this next stage that it’s also very key and it’s the last stage that’s the top of the mountain. It’s where you get that automation done so you begin to make some rules and understanding things that doesn’t have a lot of changes.
And then you move here to understand how to get to that letter stage, the replenishment and on portion or automation that it’s when usually our customers start in that journey. So stage three it’s to achieve really structural resilience and here is the, the main action is to begin to build scenarios and testing those scenarios and begin to also share data with external supply chain. So begin to share data with your customers so they can have a different perspective if they’re going to get an order on time or not, and, and make different negotiations based on that common visibility, but also in the other end of the supply chain with providers, when you can really begin to to understand how those two networks are connected and how that connection begin to make powerful enablers of the flexibility and annuity that you’re looking for.
Yeah, great. So, and again, the source of values here, building that long term structural resilience. And as we go through all this process here, a big takeaway is that if you get ahead of the schedule and you start planning this kind of resilience, you no longer have to do this process where when a recession again hits or a down turn exists, or even an upturn begins, you already have a planned approach. By doing all these simulations, all these testings in the prior phases, you already have a plan where you’re saying, once this occurs in this type of scenario, do X, Y, and Z. The amount of time savings that you get, rather than trying to do this in a reactive state before it might be the analysis and planning, then there’s the approval and then there’s the implementation. If you can do this ahead of, of schedule, by doing this on a more recurring basis, doing simulations, having a planned approach, and so that when the time comes, you can skip the analysis, skip the approval process and immediately go to action.
That amount of time, even if it’s one month or two months, can get you ahead of your, your competitors and which makes you a much better adapt to the process. Another part of this long term structural resilience is around network design scenarios. We, we actually acquired a company that specializes specifically on this, where it looks at your entire supply chain. It does this analysis, it looks at gaps, it looks at risks. A lot of times you don’t realize that this branch is servicing customers all the way onto other side of the us. This gives you a review of how should you start centralizing demand, should you look for another warehouse or DC should condense warehouses this process gain ahead of that so that you don’t react to the part of time when it’s a recession and you realize, I’m really overstretched here. I have way too many locations.
I don’t need this many. This is a process where you get ahead of that and have a more consolidated, more robust process. The other side here, as Maria mentioned, is transforming communication with customers and suppliers. This is sort of a plug for our Scott process here, where we are a big proponent of creating that kind of communication with your customers and suppliers where you feed data as much as possible, where the supplier knows what you’re looking at, you’re knowing what the customer’s looking at. And with all that additional input we can adapt based on inventory planning and forecast planning and also be able to manage, do we need a buy ahead of schedule because we can tell our supplier is gonna be constrained in the next few months or should we buy ahead because we see the customers are gonna be having a lot more demand in a few months?
We call this sort of leading indicator side of things. There’s many different ways that you can approach sort of that leading indicator process, but one component of this is having that communication with the supplier doesn’t even need to be a leading indicator. Just knowing your inventory position of the supplier, that is enough information for you to know that hey, there might be some kind of demand change, there might be some supplier risk coming up. Having that readily available is very, very applicable to having a robust structure. And I think the, the main point here I wanna say is for on the supplier side, it’s I think a lot of customers, a lot of people who on this call might have had a lot of issues with their suppliers were really valid tested against them. The times you’re changing on a daily basis and having this kind of approach reevaluating your supply network and most importantly re reviewing your your suppliers and having those options of saying, I need to have another, either a new supplier, I need to renegotiate with my supplier, or I need to have a backup supplier. These are I think some of the biggest takeaways that we’ve seen coming out of this and what I think a lot of our customers are gonna start reviewing even in good times just so that they prep for the next scenario. Just having that backup plan.
Now, I think that just to close this framework, the main thing is that GAINS is here to provide a flexible solution when you can really manage a supply and network. So understanding that it’s not a supply chain anymore, it is a network with interconnected decisions and very different levels with different, different process inside the company. And we are here to provide all those sorts that will enable you a more informed and better decision making.
Yeah, perfect. And so just a little bit of a, a general overview of GAINS. GAINS is in the, in the business of doing demand planning, sensing and shaping inventory optimization, supply optimization, Sl&OP and continuous network strategy. So we are we have customers that use every single aspect of this. We have some customers that use components. The acronym GAINS is actually generally adaptive inventory solutions. And so that is one of our benefits that we can easily adapt to a lot of different customers and we can also easily adapt to scenarios like this where there is a recession now or there’s gonna be a booming sales in the next few years hopefully. But being able to handle these type of scenarios, our software can handle and help you automatically do this in many different ways. And so yes, some customers might just want inventory optimization.
We can use your demand, we can use your supply, we can have an inventory optimization based on how we would optimize it or we could do everything here. But the main thing is this multi enterprise trading partner network cuz we can get information across all of our supply chain network, our suppliers or customers. And we can include this as beneficial inputs into each and into every single component here. A little bit of a highlight on we’ve taken over 2,500 supply chain initiatives, over 500 global clients. We have optimized over 200 billion worth of revenue and we have five generations of innovation, customer excellence. Those are different things of going through iterative, going either from Java based to web based to now what we have our, our GAINS X is our newest user interface that has a lot more visual capabilities, a lot more of those automated processes included in that. So that is actually something that we just recently released and is our latest generation of GAINS
Just as a little bit of a sort of a scope of the different customers that we have. You might see a lot of distribution, you see a lot of manufacturers, you see CPG retail, some of our biggest customers in this case, Menards is one of them where we’ve optimized 35 million skulls on a nightly basis. So when it comes to scale, we definitely can handle a lot of processing, a lot of different inventory forecasting policies, but then we get some very intricate ones, especially when it comes to manufacturing and different type of production lines and capacity planning. So a pretty wide range of different customers in lots of different industries. I always sort of say when I, I tell people what I do for a living. I could be working with aluminum and steel distribution and then I go to, to work on a retail like Menards or I go to Yogasleep and start planning for the white noise machine.
So it goes a pretty wide spectrum. But the main thing here is granted they’re in different industries and they might have different requirements. There is still an underlying theme to allow their requirements, their forecasting and their inventory policy. So I would say 60 70% are very common. They can use our standard approach, but then we have some of the more, obviously stealing supply will have its own kind of struggle versus retail with dealing with Amazon. So different kind of things were there, but there is a lot of common themes here and a lot of the benefits that one customer in one industry might be requesting. We’ll build that enhancement, we’ll have that configuration because a lot of times the majority of all of our other customers, regardless of the different industry, can benefit from it as well. So having that kind of view, that kind of approach is from many different industries, actually has quite good cross pollination across all of our other customers.
And I know a philosophical comment here that from our, our CEO, it’s that the vision GAINS and tends to enable is that companies with flexible supply chains and the ability to rapidly adapt to unpredictable shifts and supply and demand will emerge with a competitive advantage. So yes, it sucks that we’re in a recession or in has a bad downturn here but really this can be an advantage for a lot of customers cuz we’ve seen a lot of times in the previous recessions, those customers who best handle it, that were able to go into it in the best and more structural sound way. Were the ones who were able to leave it and have a significantly more share afterwards. So GAINS wants to be there to help enable that kind of flexibility. That acronym generally adaptive inventory solution, is there for a purpose because we can help adapt to any type of unpredictable shift. So that’s, that’s the philosophy for, for the day and the sales pitch. Maria, any other comments?
No, thank you everybody for joining us.
Speaker 1 (40:55):
Awesome. All right. Well thanks everybody for coming out today. Thank you guys so much for presenting everybody. Have a great rest of your afternoon. Happy Thanksgiving.
You as well. Thank
You. Thank you. Bye.