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Leading Electronics Manufacturer Achieves Supply Chain Excellence with i2 Channel Management Solution
[May 01, 2007]

Leading Electronics Manufacturer Achieves Supply Chain Excellence with i2 Channel Management Solution

DALLAS --(Business Wire)-- In today's demand-driven consumer market, one of the challenges facing large consumer goods companies is price competition from smaller rivals. Since many consumer goods are non-durable and price-elastic, small players tend to take advantage of their lean operations and low brand equity to slash costs, then putting a smaller price tag on a competing product. This competition has often meant slim margins and poor sales for big, brand-name companies. One counter strategy for larger players is to create supply chain efficiency through advanced technology.

Reducing Price Erosion

Panasonic Consumer Electronics, a household name in the global consumer electronics market, has succeeded in beating the price competition with effective channel management. While evaluating the performance of its fast growing plasma TV business Panasonic realized that the rapid price erosion of both the finished products and components left it with razor-thin margins. Panasonic executives evaluated the company's partner processes and mandated a redesign, which was aimed at improving the company's collaborative relationship with key retail partners nationwide.

Redefining Channel Strategy

As a supply chain partner of Panasonic, i2 Technologies, Inc. (NASDAQ: ITWO) helped design a new supply chain planning and fulfillment strategy for channel management. As a result, the new process utilizes distribution center (DC)/store-level point-of-sale trends for forecasting and replenishment, allowing Panasonic to gain greater visibility into retail supply chains and avoid stock-outs at store level. Also as part of a redefined collaboration process, i2's competency center in India works closely with Panasonic and its channel partners to analyze forecasts, replenishment and promotional data, and then provides detailed analysis to all parties. This outsourced planning service, coupled with tighter coordination between Panasonic and its retail partners, has improved the supply chain performance at Panasonic.

"We selected i2 for this supply chain initiative because the company is not just anther solution vendor, but also a trusted service provider," said Mike Aguilar, executive vice president of Supply Chain Strategic Initiatives, Panasonic. "Their consultant role and managed service are critical to the success of our new supply chain process. We are extraordinarily happy with what we have been able to achieve to date."

Reaping Fiscal Gains

The combination of i2's consulting group, IT group, and the India competency center helped to complete this project within six months. Both Panasonic and its retail partners are seeing benefits in terms of sales, profit margins, inventory control, and customer relationships. Some key results include:

-- Increase in plasma TV sales - ahead of increasing industry numbers

-- Led the plasma TV market with a market share between 35 to 40 percent

-- Decreased inventory levels at channel partners' distribution centers

-- Lowered the order lead time to ship a retail order

-- Increased response and turnaround time for changes in customer demand

"We value Panasonic as a customer because we admire its bold and innovative approach to using technology," said Steve Estrada, senior vice president of Consumer Industries, i2. "At i2, we pride ourselves in being a true partner and service provider to our customers, making efforts in bringing superior performance to their supply chains."

About Panasonic

Based in Secaucus, NJ, Panasonic Corporation of North America markets a broad line of digital and other electronics products for consumer, business, and industrial use. The company is the principal North American subsidiary of Matsushita Electric Industrial Co., Ltd. of Japan, and the hub of Panasonic's U.S. branding, marketing, sales, service, and R&D operations.

About i2

i2 helps business leaders make better supply chain decisions. i2's flexible new-generation solutions are designed to synchronize demand and supply across ever-changing global business networks. i2's innovative supply chain management tools and services are pervasive in a wide cross-section of industries; 20 of the AMR Research Top 25 Global Supply Chains belong to i2 customers. Learn more at

i2 is a registered trademark of i2 Technologies US, Inc. and i2 Technologies, Inc.

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