Alchemy is an adaptable Reverse Supply Chain software solution.

When Alchemy is implemented, it allows process manufacturers to optimise their internal reverse supply chain processes and gain insight into the comparative value of alternative re-use pathways.

Situation

For most organisations, materials are returned through the reverse logistics function – whether they are product returns, damaged goods or warehouse returns. In most instances, the reverse logistics model employed is designed to minimise costs, allowing materials to accumulate over time and eventually be disposed of in an environmentally friendly manner, or at the very least, in an environmentally compliant manner.

For the Process Manufacturing industry the process of recovering value from returned products can be frustrated by the fact that materials cannot be broken down into their component parts, and also by the fact that ERP solutions do not cater well for this function.

Opportunity

There is a significant opportunity for recovering value from returned products with a carefully designed process and toolset designed to identify hidden value before scrapping. Even though companies try to minimise loss through careful disposal or selling on, we have found that they cannot fully evaluate the best options or take advantage of the opportunities.

Solution: Alchemy

Alchemy works by doing a few things very well. Alchemy will help by:

• making a moving target clearer
• capturing knowledge
• focusing attention on what is important
• making complex tasks simple
• consolidating activities
• measuring performance
• driving improvement

It is non-invasive. That means that we do not:

• Flood you with consultants
• Modify your ERP systems
• Customise your tables
• Change your data

How it works

Alchemy takes key data from your ERP system via interfaces you already may have. It requires simple flat file data. Alchemy provides quick, smart and cost-effective ways to apply business rules to that data to create workflows

Based on these rules and workflows we present only the relevant data to the user, so that they can operate efficiently and on-time.

Given this context, Alchemy provides users with:

• Clear understanding of priorities
• Action items based on the priorities
• Ability to be agile with the re-use opportunities
• Visibility of the full process flow with large sets of materials

What Alchemy delivers for the organisation is:

• Clear concise reports
• Data on re-use opportunities and their execution
• Information in context
• Knowledge to make informed decisions

Alchemy Modules

We have developed four specific modules that can be added and combined to achieve optimal value as and when you need them for the following functions

• Transform
  Distressed inventory re-use/remanufacturing
• Elixir
  Aging Inventory Monitoring and use optimisation
• Alum
  Second Grade Evaluation
• Petra
  Information Discovery, Analysis and Value

It may be that you are already active in these areas, if so Alchemy has the ability to support and enhance these activities, as well as making the information involved much more manageable.

Alchemy Transform: returned inventory re-use

Transform will optimise the consumption of returned inventories in a way that cannot be easily done in ERP systems. It will generate value by streamlining the re-use opportunities, and make the whole task much easier for the users. In addition it will provide important business data for informed strategic decisions.

Why do you need Transform?

This module will allow Rework Options to be allocated to materials or batches, depending on the underlying product complexity. We can then make recommendations for the re-use opportunities that exist. It tracks changes in all the variables, and informs the user if opportunities are missed and for what reason. Re-use, Re-work, Re-manufacturing, whatever we call it, can be very complex in ERP systems as it impacts on so many other work-streams. These systems were inherently not designed to deal with this ‘negative’ flow.

Transform will manage many of the extra data requirements and/or link into existing data structures, to allow the proper management of the reverse flow. In fact the Transform application also has its own Reverse flow to allow users to step backwards through the Reverse Supply Chain workflow, in case of user error.

Alchemy Elixir: aging inventory monitoring

Aging materials use can be further optimised by Alchemy’s custom monitoring of the aging inventory. This supports and compliments built-in aging methods, but enhances the efficiencies by offering the user a single workspace to manage the flows and monitor the use easily.

Why do you need Elixir?

This module will help your organisation to actively monitor up-coming aging issues, recommend testing schedules if applicable, and recommend consumption opportunities. It can also link into purchasing modules to manage the monitoring of impacted purchasing records, so that incoming orders can be modified in a timely way.

Most ERP systems have aging inventory modules, but they do not link directly to opportunities, so that we can reduce and optimise retesting, and also reduce the impact on the purchasing departments. Alchemy Elixir does this.

Alchemy Alum: Second Grade evaluation

Identifying the best alternative uses for a material that does not match the original target specification is a challenge for many companies. So much so, that they see little advantage in spending time on the task.

Why do you need Alum?

We determine second grade materials as products that are not within the target specification, but could be used in another way, or are acceptable to another customer.

Working with customers who have used ‘dumping’ strategies for second grade materials, which often barely cover cost, prompted us to look at this in another way and try to generate value from the task.

We found that by engaging with the sales force, we could help them find extra sales by being more proactive with stock that could still be used.

This is a process that requires direct input from your sales people to identify the potential clients and also the potential uses for the second grade materials.

It is akin to oil extraction, certain sources can only be exploited when conditions are right. So in this way, we construct algorithms that will help your people make best use of second grade stock.

We can work with your sales departments to develop a second grade allocation function, so that we can determine the best Second Grade sales opportunities. This is the most customised part of the application, as it relies on specific customer relationships and requirements to be monitored.

Alchemy Petra: Information Discovery and Value Module

Petra works by using the data from other modules to leverage your ROI from returned inventories. It looks at the overall cost of goods sold for each re-use or disposal pathway, and reports on the optimum use going forward. It can even be set up to prompt the user of the best choices.

Why do you need Petra?

This extra module that can be added to the suite, which will allow you to draw in-depth understanding of savings made and value created depending on the choices made. It will take data from each module and compare it to give a dashboard overview of the overall processes. Finally, tying-in with your ERP product costing, it allows more strategic decisions to be made regarding the overall Reverse Supply Chain strategy.

In addition, this data and information can be used to drive other Lean, Six Sigma and other Quality Improvement Projects in your organisation.

How we work

We will work with you to define your business rules and processes which can be bespoke to your organisation. Implementation of the Alchemy toolset is carried out based on your business focussed requirements. Improvements in processes and understanding go hand in hand with Alchemy.

Our team will work with you to facilitate your discussions with stakeholders concerning any new processes. We can manage the change on your behalf or, alternatively, we can work in partnership with you.

Once processes and business rules have been developed, Alchemy is implemented in your organisation, and monitoring the Reverse Supply Chain performance is started.

As Alchemy is system neutral, all data remains on your servers and any additional data that is generated is stored on the customer network. All data from your existing ERP system is unmodified .

Benefits

Alchemy gives organisations opportunities to help:

• Decrease distressed inventories, unlocking capital

• Increase revenues by optimising reworking opportunities

• Increase cost-effectiveness by providing information on optimal disposition

• In addition, it can do this more effectively, reducing variable costs.

With our data module, analysis of the most cost effective re-use pathways is possible, providing insight that can feed strategic decision making when managing returns reprocessing.

Our people: your team

Alchemy is supported by a team of world class consultants at Penumbra who know ERP systems like the back of their hand.

We are an international team, largely based in Europe. We do not outsource our process or development work.

We all have years of real-world consulting experience, some of them with the big 4 consultancies, and all of them with world-class organisations.

All of us work together because of our passion to outperform others and our desire to work in a creative team delivering value for the client.

Most importantly, we want you to take ownership, and so we build capacity within your organisation to make the use of Alchemy seamless and fully integrated.

Contact us

To get up to speed on Alchemy contact us. for a no-obligation discussion.