Overcoming the challenges of the travel money market Presented by: Dr Andrea Donafee, Managing Director
We don’t just do stock management
Presented by: Dr Andrea Donafee, Managing Director
About CMS
1991 CMS was founded
Skilled team of consultants & mathematicians
Industries we work with
Foreign Currency
Cash ordered/sold by our systems every year
$56BN
25,000 Sites managed including FX bureaux, ATMs, vaults, banks & shops.
ATMs
Financial Institutions
Vaults/Cash Centres
CMS manage sites across
28 Countries
Challenges & difficulties
Challenges & difficulties
Volatile market
Lack of control
Initiatives
No visibility
Risk challenges
Challenges & difficulties
Volatile market
Lack of control
Initiatives
No visibility
Risk challenges
Volatile market On the face of it, the FX industry is an extremely volatile market. However, with the appropriate application of expert analysis, it is possible to consider and quantify key factors such as;
Rate fluctuation
Historic trends
Demand fluctuation
Current trading levels
Events
Economic factors
Volatile market Multi currency demand 80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
MXN
AUD
EGP
AED
THB
CAD
BGN
HRK
CHF
NZD
NOK
DOP
CZK
PLN
JMD
ZAR
Volatile market Single currency demand 80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0 Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Challenges & difficulties
Volatile market
Lack of control
Initiatives
No visibility
Risk challenges
Visibility and control Business analytics and reporting are the key to obtaining better visibility and control of your estate
Challenges & difficulties
Volatile market
Lack of control
Initiatives
No visibility
Risk challenges
Initiatives Online Growth
New distribution channels
Jan
Feb
Mar
Apr
May
Sales initiatives
Jun 2013
Jul 2014
Aug 2015
Sep
New locations
Oct
Nov
Dec
Challenges & difficulties
Volatile market
Lack of control
Initiatives
No visibility
Risk challenges
Risk challenges Cash availability
Reputational damage
Missed Sales
Theft
Rate fluctuations
100.0% 98.0% 96.0% 94.0% 92.0% 90.0%
88.0% 86.0% Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Simulate, Simulate, Simulate
More than just forecasting Forecasting Supplier
Forecasting
Supplier
CIT
CIT
Store
Cash Cycle Management Forecasting Supplier
Supplier
CIT
CIT Store
Forecasting Forecasting Supplier
Historical Data
Supplier
CIT Trends CIT
Monthly Volatility Store Seasonality
Supplier Forecasting Supplier Currency Availability Lead Times
Supplier
CIT Distribution CIT Pricing Store Ordering Rules
CIT CIT Transit Limits
Forecasting Supplier
Reliability
Scheduling
Supplier
CIT Pricing CIT
Emergency Order Policy Store Depot-by-Depot Performance Levels
Store Site Type
Forecasting
Safe Limits
Supplier
Currency Profile Availability Levels Supplier
CIT
Risk Policy Denominations
CIT
Recycling Store
Promotions/Pricing Competitors
CIT Forecasting Supplier CIT Transit Limits
Crew Monitoring
Supplier
CIT Route Management CIT Time Windows
Store Collection Profiles
Supplier Forecasting Supplier
Supplier
CIT Reconciliation CIT Re-banking Analysis Store Re-banking Costs
Other initiatives: Case study
Case study The challenge
Our client was fulfilling orders placed online for collection in store from vault stock Could any of these orders be fulfilled from existing store stock?
Would any customers not be able to receive their order?
CMS do not manage the stock for these stores so needed a rule based, decision making approach.
Case study The CMS approach
By using historic data we were able to construct a model for every store and analyse these orders. Simulating demand and growth of this channel. CMS was then able to devise algorithms that could be used to determine how these orders could be fulfilled.
These new algorithms improved the findings identified in the initial business case.
CMS reduced the number of customer failures.
Other initiatives Due to security reasons I can only hold a certain level of stock. What currencies should I hold? What would be the impact on sales if a wider range of stock could be held? Availability is the most important thing to me. What is the cost impact of 100% availability across all currencies? How can I hedge future positions? My supplier contacts are out to tender but they have all come back with different operating models. How can I model the impact of each response?
Final thoughts
Final thoughts Accurate forecasting alone will not solve all problems
Measure each part of the cash cycle
Use business analytics & arm yourself with as much data as possible
Simulate, simulate, simulate
Thank You
Presented by: Dr Andrea Donafee, Managing Director