Retailers Can Enhance Inventory and Distribution Management With i2 Allocation and Replenishment Solution

Kurt Peters

Next-generation solution maximizes investments in inventory and reduces out-of-stocks

NRF ANNUAL CONFERENCE AND EXPO – NEW YORK CITY -- January 16, 2006 Shorter product lifecycles and constantly evolving fashion trends combined with complex supply chains that include international vendors and long lead times present many challenges for today’s retailers. They must allocate and replenish thousands of products by style, color, and size, in potentially thousands of stores across a variety of demographics and regions, all at the price and time desired by fickle customers.

Now, i2 Technologies Inc., (NASDAQ: ITWO), offers a next-generation solution to help retailers meet those inventory and distribution challenges. i2 Allocation and Replenishment Management is a comprehensive inventory management and distribution solution for retailers. Based on i2’s industry-leading supply chain management solutions, i2 Allocation and Replenishment Management is designed with underlying business logic for scalable, multi-period constraint-based plans. The solution has the next generation capabilities retailers need to maximize inventory productivity while simultaneously reducing out-of-stocks in pursuit of a superior shopping experience.

“i2 has a wealth of experience in the areas of inventory management and distribution through its work with world-class retailers around the globe,” said i2 Vice President of Retail Strategy, Chuck Kramer. “We have applied the best practices of many of these retailers to build an allocation and replenishment solution that can set companies apart from the competition and keep them at the top of their game.”

Business Challenge
According to a December 2005 research study by AMR, “Retailers: Well-Stocked Store Shelves Brighten Everyone’s Holidays,” product availability is two to three times more influential than any other factor when it comes to determining the quality of the shopping experience. Additional research from AMR in August 2005, “The 21 Century Store Tech Trends Survey: Targeted Investments to Enhance Customer Interactions,” indicates that after 2.3 negative shopping experiences, customers will go elsewhere. Companies must deliver a high level of customer service while also satisfying Wall Street, which demands superior inventory productivity to drive strong financial performance and deliver shareholder value.

The traditional retail approach to allocation and replenishment, using extensive manual processes and legacy systems, cannot deliver the accuracy needed to meet plan objectives. As a result, retailers struggle with inaccurate demand forecasts, poor synchronization between distribution centers (DCs) and stores, and sub-optimal use of transportation and warehousing assets.

Retailers are seeking solutions to help them strike the delicate balance of delivering supply chain efficiency improvements while simultaneously reducing out-of-stocks. i2 Allocation and Replenishment Management is designed to offer the next-generation capabilities necessary to meet increasing expectations for product availability and inventory productivity. The i2 solution is designed to help retailers work from a single system that consistently optimizes inventory levels across the supply chain, providing:
o Multi-period, synchronized DC ordering and store replenishment
o A robust exception management framework to prioritize and minimize planner workload
o Sophisticated order planning and size optimization capabilities, for both musicals (mixed-size pre-pack) and solids (same item pre-pack) ordering and store-level allocation and replenishment
o A constraint model that includes storage, handling, container load building and vendor capacity constraints.

These capabilities drive business value through:
o Improved sales and margins due to better store in-stock performance and reduced markdown risk
o Better inventory productivity through optimized inventory deployment and stocking levels
o Reduced warehouse handling costs through the use of case pack configurations that are optimized to meet store sales and stocking requirements
o Improved planner productivity due to better management of exceptions and the ability to rapidly re-plan.

Allocation and Replenishment at a Leading Footwear Retailer
One world’s leading family footwear retailers implemented i2 solutions to better manage its inventory, provide international business capabilities and deliver a competitive advantage. Together with i2, the company worked to create a closed loop planning and execution process that encompasses pre-season planning, order creation and in-season allocation and replenishment. This leading edge solution manages the entire product lifecycle.

Using i2 solutions, the retailer has been able to bring sophistication to its profiling, forecasting, inventory and size management processes and more tightly integrate business processes across the entire organization. The company uses the i2 Allocation and Replenishment solution to manage and distribute inventory to more than 4600 stores in 11 countries.

Since implementing i2 solutions, the company now leverages connected processes and common data for integrated planning and execution. The retailer now benefits from clear inventory visibility throughout the entire supply chain.

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.

About i2
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; 20 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.

i2 Cautionary Language
This press release may contain forward-looking statements that involve risks and uncertainties, including forward-looking statements regarding i2’s Next-Generation SCM solutions, a customer`s ability to implement or integrate those solutions successfully and in a timely fashion, receive expected functionality and performance, or achieve benefits attributable to i2 solutions. These forward-looking statements involve risks and uncertainties that may cause actual results to differ from those projected. For a discussion of factors which could impact i2`s financial results and cause actual results to differ materially from those in forward-looking statements, please refer to i2`s recent filings with the SEC, particularly the Quarterly Report on Form 10-Q filed November 9, 2005 and the Annual Report on Form 10-K/A filed August 9, 2005. i2 assumes no obligation to update the forward-looking information contained in this news release.

For further information, please contact:
Kirsten Monberg
i2 Corporate Communications


distribution center, I2 Technologies, I2 Technologies Inc., inventory, supply chain