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Andrea Donafee from Cash Management Solutions gives insight into the pitfalls of handling cash.
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Overcoming the challenges ofthe 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
1991CMS was founded
CMS manage sites across
28 Countries
Skilled team of consultants &
mathematicians
25,000Sites managed
including FX bureaux, ATMs,
vaults, banks & shops.
Industries we work with
ATMs
Foreign Currency
Financial Institutions
Vaults/Cash Centres
$56BN
Cash ordered/sold by our systems every year
Challenges & difficulties
Challenges & difficulties
Lack of controlVolatile market No visibility
Risk challengesInitiatives
Challenges & difficulties
Lack of controlVolatile market No visibility
Risk challengesInitiatives
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
Demand fluctuation
Events
Historic trends
Current trading levels
Economic factors
Volatile marketMulti currency demand
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
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 marketSingle currency demand
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Challenges & difficulties
Lack of controlVolatile market No visibility
Risk challengesInitiatives
Visibility and control
Business analytics and reporting are the key to obtaining better visibility and control
of your estate
Challenges & difficulties
Lack of controlVolatile market No visibility
Risk challengesInitiatives
Initiatives
New distribution channels Sales initiatives New locations
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2013 2014 2015
Online Growth
Challenges & difficulties
Lack of controlVolatile market No visibility
Risk challengesInitiatives
Risk challenges
Reputational damage
Rate fluctuations
Missed Sales
Theft
86.0%
88.0%
90.0%
92.0%
94.0%
96.0%
98.0%
100.0%
Jan Feb Mar Apr May Jun Jul Aug Sep
Cash availability
Simulate, Simulate, Simulate
More than just forecasting
Forecasting
Forecasting
CIT
CIT
Supplier
Supplier
Store
Cash Cycle Management
Forecasting
CIT
CIT
Supplier
Supplier
Store
Forecasting
Forecasting
CIT
CIT
Supplier
Supplier
MonthlyVolatility
Seasonality
Historical Data
Trends
Store
Supplier
Forecasting
CIT
CIT
Supplier
Supplier
Distribution
Pricing
Ordering Rules
Lead Times
Currency Availability
Store
CIT
Forecasting
CIT
CIT
Supplier
Supplier
Emergency Order Policy
Depot-by-Depot Performance Levels
Scheduling
Pricing
Reliability
CIT Transit Limits
Store
Forecasting
CIT
CIT
Supplier
Supplier
Store
Store
Competitors
Promotions/Pricing
Recycling
Denominations
Risk Policy
Availability Levels
Currency Profile
Safe Limits
Site Type
CIT
Forecasting
CIT
CIT
Supplier
Supplier
Time Windows
Collection Profiles
Crew Monitoring
Route Management
CIT Transit Limits
Store
Supplier
Forecasting
CIT
CIT
Supplier
Supplier
Re-banking Analysis
Re-banking Costs
Reconciliation
Store
Other initiatives:Case study
Case study
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.
The challenge
Case study
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.
The CMS approach
Other initiatives
Due to security reasons I can only hold a certain level of stock. What currencies should I hold?
How can I hedge future positions?
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?
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
Use business analytics & arm yourself with as much data as possible
Measure each part of the cash cycle
Simulate, simulate, simulate
Accurate forecasting alone will not solve all problems
Thank You
Presented by:Dr Andrea Donafee, Managing Director
