i2 Next-Generation Supply Chain Management Solution Can Help Companies Manage Inventory Policies for Optimal Business Performance. i2 Inventory Optimization designed to help companies adjust inventory to changing market conditions and supply chain constraints to determine what inventories to carry, where, in what form, and how much.

Continuous management of inventory and deployment policies is a core competence behind the best performing supply chains in today's dynamic and global marketplace. To excel in this volatile economic environment, companies can turn to i2 Technologies, Inc. (NASDAQ: ITWO), for next-generation supply chain solutions designed to help them optimize supply chain performance through superior inventory operations.

"Our next-generation solution for inventory optimization is designed to help companies turn the process of managing inventory policies into a competitive weapon, to improve service, reduce costs and gain market share. These new strategies can be developed quickly and deployed across the business," said Michael McGrath, i2 chief executive officer. "Furthermore, the solution can mobilize continuous learning through cross-functional visibility for collaborative problem solving across the organization."

i2 Inventory Optimization is the first of an expanding software suite and consulting practice being developed at i2, offering a series of optimization solutions that leverage the i2 Agile Business Process Platform. i2 Inventory Optimization helps companies manage their supply chains while simultaneously having the ability to tune their supply chain configuration and policies based on performance. Previous generations of supply chain tools, such as ERP, are static systems and do not allow for the continuous adjustments necessary in a dynamic supply chain environment. The next generation of i2 Inventory Optimization enables businesses to manage the supply chain as they tune specific parameters.

Customers can adapt as the business environment and risks change with visibility to the complete supply chain. This visibility accompanied with decision support tools for scenario modeling, quantitative or subjective characterization of risk, pricing evaluations, transportation adjustments and other potential corrective actions, can adjust business processes for more efficient supply chain operations.

The Business Challenge

Supply chain operations are becoming more complex as consumer demand changes. Companies must adapt to the increasing sophistication of consumer preferences, localization needs and the trend toward mass customization. These pressures require businesses to have increased inventory visibility, higher service levels and availability due to shrinking order lead times, quicker responsiveness to volatile demand, and the ability to keep up with real-time data as business speeds ahead.

Added issues such as increased outsourcing, consolidation of distribution centers, more complex channel relationships, and product transitions including promotions, mark-downs and a diverse product portfolio can be costly as a result of frequent stock-outs, the need for excessive mark-downs and write-offs, and the loss of market share due to poor visibility.

i2 Inventory Optimization is designed to help companies better manage inventory variability to maximize their business potential. By leveraging these solutions companies may increase customer service levels and inventory turns and build higher margins from differentiated service levels, improve market-share through better fulfillment, reduce logistics costs and inventory, and prioritize the most profitable products and customers. i2's next-generation offering includes new capabilities such as total landed cost analysis, budget and space constrained optimization, and inventory redistribution. Additionally, i2 provides standard integration interfaces from ERP systems such as SAP and Oracle to i2 Inventory Optimization.

Smart companies know that maximum value is realized not just by implementing software, but through improving business processes. That is why i2 offers companies software, strategic consulting and business outsourcing services for a total inventory optimization solution. i2's inventory optimization solution is designed to deliver companies rapid value with low risk by enabling:

- Monitoring of customer buying behavior

- Customer segmentation capabilities

- Optimization of postponement capabilities

- Optimization of inventory levels

- Continuous learning and performance improvements from monitoring supply chain performance

Improved effectiveness of product launches at a leading cosmetic company

i2 customers across various industries including consumer products, semiconductor, high technology, consumer electronics and automotive are i2 Inventory Optimization customers. This includes one of the world's leading cosmetic companies, which turned to i2 when faced with a significant inventory obsolescence problem.

After just a few weeks of analysis, i2 concluded that an ineffective new product launch process was one of the major causes of this problem. Among its findings, i2 determined that the sales organization traditionally pushed multiple weeks of supply into the retail stores for a launch to ensure product availability. This practice combined with the normal promotional practice of offering a gift with a purchase in order to attract attention to the new product launch resulted in excessive inventories at most retailers and shortages at others with no ability to replenish them.

As a result of these findings, a revised product launch process consisting of three key changes was developed. First, custom launch profiles were created by category based on historical information. Second, a postponement strategy was introduced - deploying only a few weeks worth of inventory to stores and the remainder retained at a centrally located distribution center. Third, the introduction of a closed loop process by using sell-through data during the launch to drive replenishments to the stores. By applying its inventory optimization solution to the business challenge, i2 could re-engineer the company's business processes to improve launch effectiveness while eliminating the root causes of excess inventory.

i2 Next-Generation Solutions and the i2 Agile Business Process Platform

Today's announcement is part of the i2 Next-Generation Supply Chain Management (SCM) solution approach designed to help businesses address their most pressing business challenges. i2 Next-Generation SCM solutions are built on the i2 Agile Business Process Platform, a unique service-oriented architecture (SOA) that includes a layer of technology services and a business process workflow engine. The platform is business process management (BPM) compliant and interoperates with legacy, ERP and other enterprise architectures.

i2 Next-Generation SCM Solutions feature a series of workflows based on i2's industry and supply chain expertise combined with easy-to-use visual programming capabilities designed to enable companies to automate solutions. Using i2 Studio, these workflows can be modified to adjust to changing business processes allowing for capabilities to be expanded, and changes delivered to users through a common integrated user interface.

i2 helps business leaders make better supply chain decisions. i2's flexible next-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; 19 of the AMR Research Top 25 Global Supply Chains belong to i2 customers. Learn more at www.i2.com.

i2 is a registered trademark of i2 Technologies U.S. Inc. and i2 Technologies, Inc