E-Flite Power 25 Outrunner
E-Flite Power 25 Outrunner
HorizonRc.com How-To: Assemble the E-flite DHC-2 Beaver 25e (Part 2)
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E-Flite Power 25 Heli Brushless Outrunner Motor, 1000Kv $69.99 Purpose-built for JR® Vibe⢠500E Pro Heli… |
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E-Flite Power 25 Brushless Outrunner Motor, 1250Kv $69.99 Brushless Outrunner Motor ideal for airplanes requiring up to 850 watts of input power…. |
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Topstar 3720 Series 25-Size Brushless Outrunner Motor $49.95 This 25-size brushless outrunner motor provides quiet, efficient power from a small and light-weight package for sport and scale 25-size glow airplanes weighing 3 to 5.5 pounds, 15-size 3D airplanes up to 3.5 pounds, or models requiring up to 750 watts of power. Also a good match for 4- to 5-pound scale airplanes. * KV: 850 * Dimensions: 30×20mm * Weight: 140g * Shaft Diameter: 5mm * Battery: 3S … |
Dynamics Ax 2009 Sp2
Dynamics Ax 2009 Sp2
Dynamite Kid
Dynamite Kid
Soccer Drills – Teach Your Young Soccer Players to Shoot Like the Pros
What makes a great striker or centre forward? Surely it is the ability to score goals. Nobody remembers how hard a striker worked off the ball, or how they pressured the opposition defence. Everyone remembers the goals they scored, or the ones that they did not score. Traditionally as players grow towards senior ranks there will be fewer goal scoring opportunities for strikers, and so they must be able to take the ones that they get. Balance, speed, agility and power are the key characteristics that make a great young striker. The soccer drills that you use at training should develop these attributes in your young strikers.
When using shooting drills at training, the first thing I do is make clear areas in the goal in which I want them to shoot. I use hats or cones, which I usually place about 2 metres inside of each post. As players become more proficient move the hats closer to the goal posts. To start I encourage the players to shot along the ground, and as they become more proficient I encourage them to shoot into the top corners. As strikers mature I also encourage them to take into consideration the strengths and weaknesses of the opposing goalkeeper. If it is a tall keeper that is strong in the air I encourage them to shoot along the ground, or if I know the keeper is not strong in the air I encourage them to shoot at the top corners.
Power and coordination are key attributes of a good striker. I use tennis balls at training to help develop these attributes. Using a small ball encourages the players to watch the ball more closely. They will find this frustrating at first and there will be some funny moments at training, but I guarantee that a striker that can shoot well with a tennis ball will be dynamite with a soccer ball. I particularly like to use a tennis ball for first time shot drills, and volley drills as I find it most effective.
Strikers will face many different situations in a game. It is important that you practice these at training with a variety of soccer drills. A good striker must know when to hit a shot first time and when to take a touch. A good striker will know when to have a shot themselves and when to lay the ball off to a teammate. Practice different types of shots including volleys, first time shots, lobs, shooting with their weaker foot, shooting with their head, and shooting on the turn are a few of the different situations that you can practice at training to improve the proficiency of your strikers.
The final element that I like to include at training is always an element of realism. Make them beat a defender and then take a shot. Make them beat the goalkeeper. I always watch my strikers closely to see how many times they hit the goalkeeper with their shot. If this is happening frequently you will see that they look directly at the goalkeeper when taking a shot. Encourage them to look at the spot where they want the ball to go and not to look at the goalkeeper. You will need to reinforce this many times at training if you have a striker that consistently hits the goalkeeper with their shot. If they are shooting over the bar consistently encourage them to keep their head down over the ball, and to place the ball into the net. Trying for too much power tends to make the head go up and the ball go over the bar. The other thing I watch for is how strong they are on their weaker foot. A one footed striker is much easier to defend against.
If you want your young strikers to shoot like pros your training drills must focus on the key aspects which make a good striker. These are power, speed, agility and balance. Teach them to shoot in different situations at training so they make good decisions on the field. Make sure the training drills have an element of realism. Give them targets to aim at in the goals, develop their power and coordination, and practice, practice, practice.
About the Author
Are you looking for soccer coaching resources. Looking to get more out of your young soccer players. I have coached young soccer players for a number of years. Check out my website for more soccer drills and soccer coaching info. Subscribe to my free weekly coaching newsletter and get a free copy of my 12 favourite soccer drills for coaching young soccer players at Soccer Drills Review.
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Exceed Rc
Exceed Rc
Rewinding the pull starter on a Nitro RC vehicle?
I have an Exceed RC Extreme Offroad 4wd buggy and my Dad pulled the string out too far. we fixed it, but the spring is not wound all the way so that I have about 6 inches or so of slack in the string now. I only need some methods for winding the string tighter without uncoiling the spring in the starter cord. Also, after we took the engine off and put it back on, the gears/ clutch seem to be grating together. I’ve only had it for 2 days, so this might be normal, but it doesn’t hurt to be safe.
you need to take the pull start assembly off and wind the steel coil manually.. sorry! thats the only way or buy another pull start assembly .. as for the gears you may have not aligned the gears correctly when you put the engine back on,.. so take off the engine, review the gears for stripping cause you may need to replace those and put the engine back on while making sure your teeth on your gears are aligned.
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Dynam Simulator Cable
Dynam Simulator Cable
INVENTORY MANAGEMENT
I
NVENTORY MANAGEMENT
1. INTRODUCTION
DEFINATION AND MEANING
Inventory is a list of goods and materials, or those goods and materials themselves, held available in stock by a business. Inventory are held in order to manage and hide from the customer the fact that manufacture/supply delay is longer than delivery delay, and also to ease the effect of imperfections in the manufacturing process that lower production efficiencies if production capacity stands idle for lack of materials.
The reasons for keeping stock
All these stock reasons can apply to any owner or product stage.
Buffer stock is held in individual workstations against the possibility that the upstream workstation may be a little delayed in providing the next item for processing. Whilst some processes carry very large buffer stocks, Toyota moved to one (or a few items) and has now moved to eliminate this stock type.
Safety stock is held against process or machine failure in the hope/belief that the failure can be repaired before the stock runs out. This type of stock can be eliminated by programmes like Total Productive Maintenance
Overproduction is held because the forecast and the actual sales did not match. Making to order and JIT eliminates this stock type.
Lot delay stock is held because a part of the process is designed to work on a batch basis whilst only processing items individually. Therefore each item of the lot must wait for the whole lot to be processed before moving to the next workstation. This can be eliminated by single piece working or a lot size of one.
Demand fluctuation stock is held where production capacity is unable to flex with demand. Therefore a stock is built in times of lower utilisation to be supplied to customers when demand exceeds production capacity. This can be eliminated by increasing the flexibility and capacity of a production line or reduced by moving to item level load balancing.
Line balance stock is held because different sub-processes in a line work at different rates. Therefore stock will accumulate after a fast sub-process or before a large lot size sub-process. Line balancing will eliminate this stock type.
Changeover stock is held after a sub-process that has a long setup or change-over time. This stock is then used while that change-over is happening. This stock can be eliminated by tools like SMED.
Where these stocks contain the same or similar items it is often the work practice to hold all these stocks mixed together before or after the sub-process to which they relate. This ‘reduces’ costs. Because they are mixed-up together there is no visual reminder to operators of the adjacent sub-processes or line management of the stock which is due to a particular cause and should be a particular individual’s responsibility with inevitable consequences. Some plants have centralized stock holding across sub-processes which makes the situation even more acute.
The basis of Inventory accounting
Inventory needs to be accounted where it is held across accounting period boundaries since generally expenses should be matched against the results of that expense within the same period. When processes were simple and short then inventories were small but with more complex processes then inventories became larger and significant valued items on the balance sheet. This need to value unsold and incomplete goods has driven many new behaviours into management practise. Perhaps most significant of these are the complexities of fixed cost recovery, transfer pricing, and the separation of direct from indirect costs. This, supposedly, precluded “anticipating income” or “declaring dividends out of capital”. It is one of the intangible benefits of Lean and the TPS that process times shorten and stock levels decline to the point where the importance of this activity is hugely reduced and therefore effort, especially managerial, to achieve it can be minimised.
LIFO V/S FIFO
When a dealer sells goods from inventory, the value of the inventory reduces by the cost of goods sold(CoG sold). This is simple where the CoG has not varied across those held in stock but where it has then an agreed method must be derived. For commodity items that one cannot track individually, accountants must choose a method that fits the nature of the sale. Two popular methods exist: FIFO and LIFO accounting (first in – first out, last in – first out). FIFO regards the first unit that arrived in inventory the first one sold. LIFO considers the last unit arriving in inventory as the first one sold. Which method an accountant selects can have a significant effect on net income and book value and, in turn, on taxation. Using LIFO accounting for inventory, a company generally reports lower net income and lower book value due to the effects of inflation. This generally results in lower taxation. Due to LIFO’s potential to skew inventory value, UK GAAP and IAS have effectively banned LIFO inventory accounting.
SUPPLY CHAIN MANAGEMENT
A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.
Supply chain management is typically viewed to lie between fully vertically integrated firms, where the entire material flow is owned by a single firm and those where each channel member operates independently. Therefore coordination between the various players in the chain is key in its effective management. Cooper and Ellram [1993] compare supply chain management to a well-balanced and well-practiced relay team. Such a team is more competitive when each player knows how to be positioned for the hand-off. The relationships are the strongest between players who directly pass the baton (stick), but the entire team needs to make a coordinated effort to win the race.
Below is an example of a very simple supply chain for a single product, where raw material is procured from vendors, transformed into finished goods in a single step, and then transported to distribution centers, and ultimately, customers. Realistic supply chains have multiple end products with shared components, facilities and capacities. The flow of materials is not always along an arborescent network, various modes of transportation may be considered, and the bill of materials for the end items may be both deep and large.
To simplify the concept, supply chain management can be defined as a loop: it starts with the customer and ends with the customer. All materials, finished products, information, and even all transactions flow through the loop. However, supply chain management can be a very difficult task because in the reality, the supply chain is a complex and dynamic network of facilities and organizations with different, conflicting objectives.
Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.
Unlike commercial manufacturing supplies, services such as clinical supplies planning are very dynamic and can often have last minute changes. Availability of patient kit when patient arrives at investigator site is very important for clinical trial success. This results in overproduction of drug products to take care of last minute change in demand. R&D manufacturing is very expensive and overproduction of patient kits adds significant cost to the total cost of clinical trials. An integrated supply chain can reduce the overproduction of drug products by efficient demand management, planning, and inventory management.
Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. These organizations have their own objectives and these are often conflicting. Marketing’s objective of high customer service and maximum sales dollars conflict with manufacturing and distribution goals. Many manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities. Purchasing contracts are often negotiated with very little information beyond historical buying patterns. The result of these factors is that there is not a single, integrated plan for the organization—there were as many plans as businesses. Clearly, there is a need for a mechanism through which these different functions can be integrated together. Supply chain management is a strategy through which such integration can be achieved.
Supply Chain Management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain with the purpose to satisfy customer requirements as efficiently as possible. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption.
According to the Council of Supply Chain Management Professionals (CSCMP),
A professional association that developed a definition in 2004, Supply Chain Management “encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities”. Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers. In essence, Supply Chain Management integrates supply and demand management within and across companies.
According to Cohen & Lee (1988)
Supply Chain Management is “The network of organizations that are having linkages, both upstream and downstream, in different processes and activities that produces and delivers the value in form of products and services in the hands of ultimate consumer.” Thus a shirt manufacturer is a part of supply chain that extends up stream through the weaves of fabrics to the spinners and the manufacturers of fibers, and down stream through distributions and retailers to the final consumer. Though each of these organizations are dependent on each other yet traditionally do not closely cooperate with each other. An integrated supply chain management streamlines processes and increases profitability by delivering the right product to the right place, at the right time, and at the lowest possible cost.
According to Ganeshan & Harrison (2001)
Supply Chain Management is a “systems approach to managing the entire flow of information, materials, and services from raw materials suppliers through factories and warehouses to the end customer.”
Supply chain event management (abbreviated as SCEM) is a consideration of all possible occurring events and factors that can cause a disruption in a supply chain. With SCEM possible scenarios can be created and solutions can be planned.
Some experts distinguish supply chain management and logistics management, while others consider the terms to be interchangeable. From the point of view of an enterprise, the scope of supply chain management is usually bounded on the supply side by your supplier’s suppliers and on the customer side by your customer’s customers.
Supply chain management is also a category of software products.
2. SIEMENS
SIEMENS is one of the world’s largest companies and Europe’s largest engineering firm. Siemens has six major business divisions: Communication and Information; Automation and Control; Power; Transportation; Medical; and Lighting. Siemens’ international headquarters are located in Berlin and Munich, Germany. Siemens AG is listed on the Frankfurt Stock Exchange, and has been listed on the New York Stock Exchange since March 12, 2001. Worldwide, Siemens and its subsidiaries employ 480,000 people in 190 countries and reported global sales of €87.325 billion in fiscal year 2006
HISTORY
Siemens was founded by Werner von Siemens on October 1, 1847, based on the telegraph he had invented that used a needle to point to the sequence of letters, instead of using Morse code. The company – then called Telegraphen-Bauanstalt von Siemens & Halske – opened its first workshop on October 12.
In 1848, the company built the first long-distance telegraph line in Europe; 500 km from Berlin to Frankfurt am Main. In 1850 the founder’s younger brother, Sir William Siemens (born Carl Wilhelm Siemens), started to represent the company in London. In the 1850s, the company was involved in building long distance telegraph networks in Russia. In 1855, a company branch headed by another brother, Carl von Siemens, opened in St Petersburg. In 1867, Siemens completed the monumental Indo-European (Calcutta to London) telegraph line.
In 1881, a Siemens AC Alternator driven by a watermill was used to power the world’s first electric street lighting in the town of Godalming, United Kingdom. The company continued to grow and diversified into electric trains and light bulbs. In 1890, the founder retired and left the company to his brother Carl and sons Arnold and Wilhelm. Siemens & Halske (S&H) was incorporated in 1897.
In 1919, S&H and two other companies jointly formed the Osram lightbulb company. A Japanese subsidiary was established in 1923.
During the 1920s and 1930s, S&H started to manufacture radios, television sets, and electron microscopes.
Before World War II Siemens was involved in the secret rearmament of Germany. During the Second World War, like most big companies in Germany at the time, Siemens supported the Hitler regime, contributed to the war effort and participated in the “Nazification” of the economy. Siemens had many factories in and around famous extermination camps such as Auschwitz and used slave labor from concentration camps to build electric switches for military uses. In one example, almost 100,000 men and women from Auschwitz worked in a Siemens factory inside the extermination camp, supplying the electricity to the camp.
In the 1950s and from their new base in Bavaria, S&H started to manufacture computers, semiconductor devices, laundry machines, and pacemakers. Siemens AG was incorporated in 1966. The company’s first digital telephone exchange was produced in 1980. In 1988 Siemens and GEC acquired the UK defense and technology company Plessey. Plessey’s holdings were split, and Siemens took over the avionics, radar and traffic control businesses — as Siemens Plessey.
In 1991, Siemens acquired Nixdorf Computer AG and renamed it Siemens Nixdorf Informationssysteme AG. In 1997 Siemens introduced the first GSM cellular phone with colour display. Also in 1997 Siemens agreed to sell the defence arm of Siemens Plessey to British Aerospace (BAe) and a UK government agency, the Defence Analytical Services Agency (DASA). BAe and DASA acquired the British and German divisions of the operation respectively.
In 1999, Siemens’ semiconductor operations were spun off into a new company known as Infineon Technologies. Also, Siemens Nixdorf Informationssysteme AG formed part of Fujitsu Siemens Computers AG in that year. The retail banking technology group became Wincor Nixdorf.
In February 2003, Siemens reopened its office in Kabul.[3]
In 2004, Siemens took over the mantle of official Formula One timekeeper, replacing TAG Heuer.
In November, 2005, Siemens signed a 12 year agreement with the Walt Disney Company to sponsor attractions in its Florida and California parks.
In 2006, Siemens announced the purchase of Bayer Diagnostics, which was incorporated into the Medical Solutions Diagnostics division officially on 1 January 2007.
In March 2007 a Siemens board member was temporarily arrested and accused of illegally financing a business-friendly labour association which competes against the union IG Metall. He has been released on bail. Offices of the labour union and of Siemens have been searched. Siemens denies any wrongdoing.
In April 2007, the Fixed Networks, Mobile Networks and Carrier Services divisions of Siemens merged with Nokia’s Network Business Group in a 50/50 joint venture, creating a fixed and mobile network company called Nokia Siemens Networks. Nokia delayed the merger due to bribery investigations against Siemens.
Through an American sub-organisation known as the Siemens Foundation, Siemens also devotes funds to rewarding students and AP teachers. One of its main programs is the Siemens Westinghouse Competition in maths, science, and technology, which annually grants scholarships up to US$100,000 to both individual and team entrants. According to the foundation website, Siemens awards a total of nearly US$2 million in scholarship money every year.
MAJOR CLIENTS OF SIEMENS
-KCR
-Novartis
-Edmonton Transit System
-Calgary Transit
-Deutsche Bahn AG ( German rail transport company)
-METRORail (Houston, Texas)
-Sacramento Regional Transit District
-Regional Transportation District TheRide (Denver, Colorado)
-LACMTA (Los Angeles County, California)
-Pittsburgh Light Rail
-San Diego Trolley
-MAX Light Rail (Portland, Oregon)
-Nederlandse Spoorwegen (the Dutch railways) (The Netherlands)
-Port of Rotterdam (Rotterdam, The Netherlands)
-Balkim Muh. Elk. Ltd. Sti.
-BBC
-Indian Railways
-Airtel
-Powergrid Corporation of India
Products
-Industrial Instrumentation (Sensors and Controls)
-Telecommunication Service Platform, the TSP 7000
-Combino, ULF, and Avanto trams
-Siemens-Duwag U2 LRV
-ER20 locomotive – MTR
-LHB/Siemens M1/M2/M3 Metro Mar. Pair
-Siemens-Adtranz LRV
-Duewag/Siemens 1435 mm Combino Low Flr LRV
-MX3000 Metro car for Oslo (SGP Wien works)
-S4000 metro
-Schindler/Siemens ABB Be 4/8 Low Floor LRV
-Metro 5001
-SWBSiemensr NGT 6D LRV
-Eurosprinter locomotive
-Desiro, ICE, and Transrapid trains
-Gigaset, Home entertainment products, including Gigaset M740 AV, a set-top box to receive -TDT and integrate it in a domestic network (using WLAN or cable), i.e. for home streaming media.
-Hicom Trading E
-Hicom 300
-HiPath
-HiQ 8000 Softswitch
-MSR32R
-EWSD telephone exchanges
-SPX 2000 small digital telephone exchange (rural)
-Siemens Gigaset cordless telephones
-Siemens Mobile Phones – divested to BenQ in 2005
-Siemens SPPA-T2000 Control System (formerly Teleperm XP)
-Siemens SPPA-T3000 Control System (For Electrical Power Generation Control)
-SIMATIC PCS 7 Process Automation System for Process and Hybrid industries
-Radio and core products for 2G and 3G Mobile Networks (GSM, UMTS, …)
-Gas & Steam Turbines
-Industrial programmable controls (including Simatic PLC, and Logo! microcontrollers)
-The Siemens Servo life support ventilator line
-MAGNETOM(TM) Espree
-SOMATOM(R) Definition CT
-SOMATOM(R) Sensation CT
-SOMATOM(R) Emotion CT
-AXIOM Artis
-AXIOM Sensis
-E.Cam Signature Series Gamma Camera
-Symbia TruePoint SPECT-CT
-Biograph TruePoint PET.CT
-Magnetom C!, a low field open MRI
-Magnetom Avanto, a Tim system MRI
-Magnetom Espree, a Tim system, open bore MRI
-Magnetom Trio, A Tim System, ultra high field MRI
-Windturbines, 1.3 MW, 2.3 MW, 3.6 MW
-Sinorix(TM)
-Sistore(TM)
Main competitors of Siemens are:
-ABB
-Alcatel-Lucent
-Alstom
-Automated Logic
-Bombardier
-Cisco Systems
-Computrols
-Eaton
-Ericsson
-General Electric
-Honeywell
-Johnson Controls
-Lantronix
-Nortel
-Philips
-Reliable Controls
-Rockwell Automation
-Samsung
-Schneider Electric
3. OBJECTIVES AND NEED OF SUPPLY CHAIN MANAGEMENT
Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. These organizations have their own objectives and these are often conflicting.
Marketing’s objective of high customer service and maximum sales dollars conflict with manufacturing and distribution goals. Many manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities. Purchasing contracts are often negotiated with very little information beyond historical buying patterns.
The result of these factors is that there is not a single, integrated plan for the organization—there were as many plans as businesses. Clearly, there is a need for a mechanism through which these different functions can be integrated together. Supply chain management is a strategy through which such integration can be achieved.
Moreover, shortened product life cycles, increased competition, and heightened expectations of customers have forced many leading edge companies to move from physical logistic management towards more advanced supply chain management. Additionally, in recent years it has become clear that many companies have reduced their manufacturing costs as much as it is practically possible. Therefore, in many cases, the only possible way to further reduce costs and lead times is with effective supply chain management.
In addition to cost reduction, the supply chain management approach also facilitates customer service improvements. It enables the management of:
- inventories,
- transportation systems and
- whole distribution networks
so that organizations are able to meet or even exceed their customers’ expectations.
The major objective of supply chain management is to reduce or eliminate the buffers of inventory that exists between originations in chain through the sharing of information on demand and current stock levels.
Broadly, an organization needs an efficient and proper supply chain management system so that the following strategic and competitive areas can be used to their full advantage if a supply chain management system is properly implemented.
1. Fulfillment of raw materials:
Ensuring the right quantity of parts for production or products for sale arrive at the right time. This is enabled through efficient communication, ensuring that orders are placed with the appropriate amount of time available to be filled. The supply chain management system also allows a company to constantly see what is on stock and making sure that the right quantities are ordered to replace stock.
2. Logistics:
The cost of transporting materials as low as possible consistent with safe and reliable delivery. Here the supply chain management system enables a company to have constant contact with its distribution team, which could consist of trucks, trains, or any other mode of transportation. The system can allow the company to track where the required materials are at all times. As well, it may be cost effective to share transportation costs with a partner company if shipments are not large enough to fill a whole truck and this again, allows the company to make this decision.
3. Smooth Production:
Ensuring production lines function smoothly because high-quality parts are available when needed. Production can run smoothly as a result of fulfillment and logistics being implemented correctly. If the correct quantity is not ordered and delivered at the requested time, production will be halted, but having an effective supply chain management system in place will ensure that production can always run smoothly without delays due to ordering and transportation.
4. Increase in Revenue & profit:
Ensuring no sales is lost because shelves are empty. Managing the supply chain improves a company flexibility to respond to unforeseen changes in demand and supply. Because of this, a company has the ability to produce goods at lower prices and distribute them to consumers quicker then companies without supply chain management thus increasing the overall profit.
5. Reduction in Costs:
Keeping the cost of purchased parts and products at acceptable levels. Supply chain management reduces costs by increasing inventory turnover on the shop floor and in the warehouse controlling the quality of goods thus reducing internal and external failure costs and working with suppliers to produce the most cost efficient means of manufacturing a product.
6. Mutual Success:
Among supply chain partners ensures mutual success. Collaborative planning, forecasting and replenishment (CPFR) is a longer-term commitment, joint work on quality, and support by the buyer of the supplier’s managerial, technological, and capacity development. This relationship allows a company to have access to current, reliable information, obtain lower inventory levels, cut lead times, enhance product quality, improve forecasting accuracy and ultimately improve customer service and overall profits. The suppliers also benefit from the cooperative relationship through increased buyer input from suggestions on improving the quality and costs and though shared savings. Consumers can benefit as well through higher quality goods provided at a lower cost.
4. ACTIVITIES/FUNCTIONS OF SCM IN SIEMENS
Supply chain management is a cross-functional approach to managing the movement of raw materials into an organization and the movement of finished goods out of the organization toward the end-consumer. As corporations strive to focus on core competencies and become more flexible, they have reduced their ownership of raw materials sources and distribution channels. These functions are increasingly being outsourced to other corporations that can perform the activities better or more cost effectively. The effect has been to increase the number of companies involved in satisfying consumer demand, while reducing management control of daily logistics operations. Less control and more supply chain partners led to the creation of supply chain management concepts. The purpose of supply chain management is to improve trust and collaboration among supply chain partners, thus improving inventory visibility and improving inventory velocity.
Several models have been proposed for understanding the activities required managing material movements across organizational and functional boundaries. SCOR is a supply chain management model promoted by the Supply-Chain Council. Another model is the SCM Model proposed by the Global Supply Chain Forum (GSCF). Supply chain activities can be grouped into strategic, tactical, and operational levels of activities.
(a) Strategic:-
-Strategic network optimization, including the number, location, and size of warehouses, distribution centers and facilities.
-Strategic partnership with suppliers, distributors, and customers, creating communication channels for critical information and operational improvements such as cross docking, direct shipping, and third-party logistics.
-Products design coordination, so that new and existing products can be optimally integrated into the supply chain.
-Information Technology infrastructure, to support supply chain operations.
-Where to make and what to make or buy decisions.
(b) Tactical:-
-Sourcing contracts and other purchasing decisions.
-Production decisions, including contracting, locations, scheduling, and planning process definition.
-Inventory decisions, including quantity, location, and quality of inventory. Transportation strategy, including frequency, routes, and contracting.
-Benchmarking of all operations against competitors and implementation of best practices throughout the enterprise.
(c) Operational:-
-Daily production and distribution planning, including all nodes in the supply chain.
-Production scheduling for each manufacturing facility in the supply chain (minute by minute).
-Demand planning and forecasting, coordinating the demand forecast of all customers and sharing the forecast with all suppliers.
-Sourcing planning, including current inventory and forecast demand, in collaboration with all suppliers. Inbound operations, including transportation from suppliers and receiving inventory.
-Production operations, including the consumption of materials and flow of finished goods.
-Outbound operations, including all fulfillment activities and transportation to customers.
-Order promising, accounting for all constraints in the supply chain, including all suppliers, manufacturing facilities, distribution centers, and other customers. Performance tracking of all activities.
INTEGRATED SUPPLY CHAIN MANAGEMENT
An integrated supply chain management streamlines processes and increases profitability by delivering the right product to the right place, at the right time, and at the lowest possible cost. Unlike commercial manufacturing supplies, clinical supplies planning is very dynamic and can often have last minute changes. Availability of patient kit when patient arrives at investigator site is very important for clinical trial success.
This results in overproduction of drug products to take care of last minute change in demand. R&D manufacturing is very expensive and overproduction of patient kits adds significant cost to the total cost of clinical trials.
An integrated supply chain can reduce the overproduction of drug products by efficient demand management, planning, and inventory management. Implementation of ERP system (such as SAP) in R&D can have major ROI by an efficient supply and inventory management system and also by reducing overproduction.
-How Integration Is Achieved In Supply Chain?
Stage 1:
Complete functional independence where each business function such as production or purchasing does its own thing in complete isolation from other business function. For instance, production function seeking to optimize its unit cost of manufacture by long production runs with out regard for build up of finished goods inventory and advance impact it will have on the warehousing as well as working capital.
Stage 2:
Companies recognize the need of limited integration between adjacent functions such as distribution and inventory management or purchasing and material control.
Stage 3:
A natural extension of stage two, leading to establishment and implementation of end- to-end integration. A concept of linkage and coordination is achieved.
STAGE 4:
The linkage achieved in stage three is extended upstream to suppliers and down stream to customers. It represents true supply chain integration. This concept is also called ‘co-managed inventory’ (CMI).
Force of supply chain management is on trust and cooperation and the recognition that is properly managed ‘the whole cane be greater then the sum of its part’.
Inventory Decisions:
These refer to means by which inventories are managed. Inventories exist at every stage of the supply chain as either raw material, semi-finished or finished goods. They can also be in-process between locations. Their primary purpose to buffer against any uncertainty that might exist in the supply chain. Since holding of inventories can cost anywhere between 20 to 40 percent of their value, their efficient management is critical in supply chain operations. It is long term in the sense that top management sets goals. However, most researchers have approached the management of inventory from short term perspective. These include deployment strategies (push versus pull), control policies — the determination of the optimal levels of order quantities and reorder points, and setting safety stock levels, at each stocking location. These levels are critical, since they are primary determinants of customer service levels.
5. INVENTORY CONTROL MANAGEMENT
Inventory database
An important component of inventory planning involves access to an inventory database. It is a structured framework that contains the information needed to effectively manage all items of inventory, from raw materials to finished goods. This information includes the classification and amount of inventories, demand for the items, cost to the firm for each item, ordering costs, carrying costs and other data.
The task of inventory planning can be highly complex. At the same time it rests on fundamental principles. In doing so we must understand and determine the optimal lot size that has to be ordered. The EOQ (economic order quantity) refers to the optimal order size that will result in the lowest total of order and carrying costs and ordering costs. By calculating the economic order quantity the firm attempts to determine the order size that will minimize the total inventory costs. In examination of the two curves reveals that the carrying cost curve is linear i.e. more the inventory held in any period, greater will be the cost of holding it. Ordering cost curve on the other hand is different. The ordering costs decrease with an increase in order sizes. The point where the holding cost curve i.e. the carrying cost curve and the ordering cost curve meet, represent the least total cost which is incidentally the economic order quantity or optimum quantity.
PRODUCTIVITY
In the industries there will be a competitor who will be a low cost producer and will have greater sales volume in that sector. This is partly due to economies of scale, which enable fixed costs to spread over a greater volume but more particularly to the impact of the experience curve.
It is possible to identify and predict improvements in the rate of output of workers as they become more skilled in the processes and tasks on which they work. Bruce Henderson extended this concept by demonstrating that all costs, not just production costs, would decline at a given rate as volume increased. This cost decline applies only to value added, i.e. costs other than bought in supplies. Traditionally it has been suggested that the main route to cost reduction was by gaining greater sales volume and there can be no doubt about the close linkage between relative market share and relative costs. However it must also be recognized that logistics management can provide a multitude of ways to increase efficiency and productivity and hence contribute significantly to reduced unit costs.
In today’s more turbulent environment there is no longer any possibility of manufacturing and marketing acting independently of each other. It is now generally accepted that the need to understand and meet customer requirements is a prerequisite for survival. At the same time, in the search for improved cost competitiveness, manufacturing management has been the subject of massive renaissance. The last decade has seen the rapid introduction of flexible manufacturing systems, of new approaches to inventory based on materials requirement planning (MRP) and just in time (JIT) methods, a sustained emphasis on quality.
Equally there has been a growing recognition of the critical role that procurement plays in creating and sustaining competitive advantage as part of an integrated logistics process.
In this scheme of things, logistics is therefore essentially an integrative concept that seeks to develop a system wide view of the firm. It is fundamentally a planning concept that seeks to create a framework through which the needs of the manufacturing strategy and plan, which in turn link into a strategy and plan for procurement.
Inventory Flow:
The management of logistics is concerned with the movement and storage of materials and finished products. Logistical operations start with the initial shipment of a material or component part from a supplier and are finalized when a manufactured or processed product is delivered to a customer. From the initial purchase of a material or component, the logistical process adds value. By moving inventory when and where needed. Thus the material gains value at each step. For a large manufacturer, logistical operations may consist of thousands of movements, which ultimately culminate in the delivery of the product to an industrial user, wholesaler, dealer or customer. Similarly for a retailer, logistical operations may commence with the procurement of products for resale and may terminate with consumer pickup or delivery.
The significant point is that regardless of the size or type of the enterprise, logistics is useful and requires continuous management attention.
INVENTORY- related costs
Inventory carrying cost (ICC):
-Tax
-Storage
-Capital
-Insurance
-Obsolescence
-Ordering:
-Communication
-Processing, including material
-handling and packaging
-Update activities, including
-receiving and date-processing
Basic Inventory Decisions
There are two basic decisions that must be made for every item that is maintained in inventory. These decisions have to do with the timing of orders for the item and the size of orders for the item.
RELEVANT INVENTORY COSTS
Item Costs, Holding Costs, Ordering Costs, Shortage Costs,
Direct cost for getting an item. Purchase cost for outside orders, manufacturing cost for internal orders. Costs associated with carrying items in inventory. Storage and other related costs. Fixed costs associated with placing an order (either a purchase cost for outside orders, or a setup cost for internal orders). Costs associated with not having enough inventory to meet demand.
EOQ:
The EOQ can be calculated with the help of a mathematical formula. Following assumptions are implied in the calculation:
1. Constant or uniform demand- although the EOQ model assumes constant demand, demand may vary from day to day. If demand is not known in advance- the model must be modified through the inclusion of safe stock.
2. Constant unit price- the EOQ model assumes that the purchase price per unit of material will remain unaltered irrespective of the order offered by the suppliers to include variable costs resulting from quantity discounts, the total costs in the EOQ model can be redefined.
3. Constant carrying costs- unit carrying costs may very substantially as the size of the inventory rises, perhaps decreasing because of economies of scale or storage efficiency or increasing as storage space runs out and new warehouses have to be rented.
4. Constant ordering cost- this assumption is generally valid. However any violation in this respect can be accommodated by modifying the EOQ model in a manner similar to the one used for variable unit price.
5. Instantaneous delivery- if delivery is not instantaneous, which is generally the case; the original EOQ model must be modified through the inclusion of a safe stock.
6. Independent orders- if multiple orders result in cost saving by reducing paper work and the transportation cost, the original EOQ model must be further modified. While this modification is somewhat complicated, special EOQ models have been developed to deal with it.
These assumptions have been pointed out to illustrate the limitations of the basic EOQ model and the ways in which it can be easily modified to compensate for them.
The formula for the EOQ model is:
2 M Co
S Cc
Where M = is the annual demand
Co is the cost of ordering
Cc is the inventory carrying cost
S = is the unit price of an item.
Limitations of the EOQ formula-
1. Erratic changes usages- the formula presumes the usage of materials is both predictable and evenly distributed. When this is not the case, the formula becomes useless.
2. Faulty basic information- order cost varies from commodity to commodity and the carrying cost can vary with the company’s opportunity cost of capital. Thus the assumption that the ordering cost and the carrying cost remains constant is faulty and hence EOQ calculations are not correct.
3. Costly calculations: the calculation required to find out EOQ is extremely time consuming. More elaborate formulae are even more expensive. In many cases, the cost of estimating the cost of possession and acquisition and calculating EOQ exceeds the savings made by buying that quantity.
4. No formula is a substitute for common sense- sometimes the EOQ may suggest that we order a particular commodity every week (six-year supply) based on the assumption that we need it at the same rate for the next six years. However we have to order it in the quantities according to our judgment. Some items can be ordered every week; some can be ordered monthly, depends on how feasible it is for the firm.
5. EOQ ordering must be tempered with judgment- Sometimes guidelines provide a conflict in ordering. Where an order strategy conflicts with an operational goal, order strategy restrictions should be developed to permit honoring the goal.
Quantity discounts: In the EOQ analysis, it has been assumed that material prices and transportation costs were constant factors for the range of order quantities considered. In practice, some situations occur in which the delivered unit cost of a material decreases significantly if a slightly larger quantity than the originally computed EOQ is purchased. Quantity discounts, freight rate schedules and price increases may create such situations. These additional variables can also be included in the formula.
Cost of carrying inventory:
Carrying material in inventory is expensive. A number of studies indicated that the annual cost of carrying a production inventory averaged approximately 25% of the value of the inventory. The escalating and volatile cost of money has escalated the annual inventory carrying cost to a figure between 25% – 35% of the value of the inventory. The following five elements make up this cost:
1) Opportunity cost (12% -20%)
2) Insurance cost (2% – 4%)
3) Property taxes (1% – 3%)
4) Storage costs (1%- 3%)
5) Obsolescence and deterioration (4% – 10%)
Total carrying cost (20% – 40%)
Let us briefly look into these costs:
Opportunity cost of invested funds
When a firm uses money to buy production material and keeps it in the inventory, it simply has this much less cash to spend for other purposes. Money invested in external securities or in productive equipment earns a return for the company. Thus it is logical to charge all money invested in inventory an amount equal to that it could earn elsewhere in the company. This is the opportunity cost associated with inventory investment.
Insurance cost
Most firms insure the assets against possible losses from fire and other forms of damage.
Property taxes
This is levied on the assessed value of a firm’s assets, the greater the inventory value, the greater the asset value and consequently the higher the firm’s tax bill.
Storage costs
The warehouse is depreciated every year over the length of its life. This cost can be charged against the inventory occupying the space.
Obsolescence and deterioration
In most inventory operations, a certain percentage of the stock spoils, is damaged, is pilfered, or eventually becomes obsolete. A certain number always takes place even if they are handled with utmost care.
Generally speaking, this group of carrying costs rises and falls nearly proportionately to the rise and fall of the inventory level.
The ABC Classification:
Indicators that classifies a material as an A,B or C part according to its consumption value .The classification process is known as the ABC analysis.
The three indictors have the following meanings:
A-important part , high consumption value
B-less important , medium consumption value
C-relatively unimportant part , low consumption value
The ABC classification system is to grouping items according to annual sales volume, in an attempt to identify the small number of items that will account for most of the sales volume and that are the most important ones to control for effective inventory management.
Reorder Point: The inventory level R in which an order is placed where R = D.L, D = demand rate (demand rate period (day, week, etc), and L = lead time.
Safety Stock: Remaining inventory between the times that an order is placed and when new stock is received. If there are not enough inventories then a shortage may occur.
Safety stock is a hedge against running out of inventory. It is an extra inventory to take care on unexpected events. It is often called buffer stock. The absence of inventory is called a shortage.
ABC Inventory Classification
The ABC classification process is an analysis of a range of items, such as finished products or customers into three categories: A – outstandingly important; B – of average importance; C – relatively unimportant as a basis for a control scheme. Each category can and sometimes should be handled in a different way, with more attention being devoted to category A, less to B, and less to C.
Inventory Control Application: The ABC classification system is to grouping items according to annual sales volume, in an attempt to identify the small number of items that will account for most of the sales volume and that are the most important ones to control for effective inventory management.
Break-even analysis depends on the following variables:
1. Selling Price per Unit: The amount of money charged to the customer for each unit of a product or service.
2. Total Fixed Costs: The sum of all costs required to produce the first unit of a product. This amount does not vary as production increases or decreases, until new capital expenditures are needed.
3. Variable Unit Cost: Costs that vary directly with the production of one additional unit.
Total Variable Cost The product of expected unit sales and variable unit cost, i.e., expected unit sales times the variable unit cost.
4. Forecasted Net Profit: Total revenue minus total cost. Enter Zero (0) if you wish to find out the number of units that must be sold in order to produce a profit of zero (but will recover all associated costs)
Break-Even Point in siemens: Number of units that must be sold in order to produce a profit of zero (but will recover all associated costs). In other words, the break-even point is the point at which your product stops costing you money to produce and sell, and starts to generate a profit for your company.
where:
Q = Break-even Point, i.e., Units of production (Q),
FC = Fixed Costs,
VC = Variable Costs per Unit
UP = Unit Price
Therefore,
Break-Even Point Q = Fixed Cost / (Unit Price – Variable Unit Cost)
Stock control and inventory
Stock control, otherwise known as inventory control, is used to show how much stock you have at any one time, and how you keep track of it.
It applies to every item you use to produce a product or service, from raw materials to finished goods. It covers stock at every stage of the production process, from purchase and delivery to using and re-ordering the stock.
Efficient stock control allows you to have the right amount of stock in the right place at the right time. It ensures that capital is not tied up unnecessarily, and protects production if problems arise with the supply chain.
Supply chain vendor management inventory:
Allows supply chain partners to share critical order, demand and inventory information in real-time and uses both integrated and web based applications to reduce administration costs, shortening cycle times and help lower inventory levels. Our unique, managed supply hub requires little upfront investment, yet quickly starts delivering high performance in real time
Inventory Control Overview
Normal Inventory
As it sounds, this type of inventory item will be used for the majority of your parts. It will correctly track the inventory received and sold on a first in first out basis, will handle cost of sales, and will warn you when you’re out of stock.
Non-Inventory Type
This is used for selling things that are not really inventory items. For example, you could be selling warranty, but because you don’t have warranty in a box to sell, and you’ll never run out of stock, you won’t need to keep inventory control on it. As well, there is no cost of sale adjustments with non-stock items. The system will not calculate how much you paid for the item, and therefore will not try to remove that value from inventory in the general ledger. If you are selling something that does cost you money, you will have to handle these details manually.
Labor Parts
You (probably) don’t have technicians hanging from hooks in your back room, so like non-inventory items, the system will not try to remove them from inventory when you sell a labor item. The two differences between Non-Inventory items an Labor items are that you can optionally have the system ask you for the technician code that did the work so that you can print reports showing who did what work. As well, the system will optionally ask for a comment to explain what was done so that the description of the service work can be printed on the invoice.
Note too that you can optionally keep track of how much time was spent and how much time was billed for on a per job basis. At the end of the month, you can then print technician productivity reports to compare total time spent compared to billable hours. In the automotive industry, some mechanics can do the work faster than is what is billed because the billing is based on industry standards.
Consignment Items
Consignments can be used to keep track of inventory that you don’t own, but at the time you sell it, you must pay for it. You’ll be able to generate several reports, including a list of inventory that is on consignment but not sold and a list of inventory sold on consignment, but not yet paid for.
Floor Plan Inventory
Floor planning is very similar to consignment, except that you take possession and own the inventory when you receive it, but you don’t have to pay for it until it’s sold, or until it’s been in the store for a negotiated period of time. However, you do own the inventory and do have to pay for it sometime.
Some floor planning companies want the ability to check the inventory serial number by serial number for the larger items, and others may just want to count the number of each model number on hand. Regardless, Windward System Five can handle it.
On the accounts payable side, you will be able to keep track of who you owe the money too (Floor Planning Company) and who you actually bought the inventory from (Supplier) and generate proper histories of each.
Tire Inventory
Windward System Five has the ability to sort and categorize tires by their size, aspect ratio and rim size. In addition, you will also be able to search for the tires by just entering in some of the search criteria and having the system bring up a window of all matches.
When the list brings up a list of tires that can all fit the vehicle, the system can sort the list to show the items with the highest quantity in stock at the top of the list and the items that are out of stock at the bottom of the list. This will help you sell what you actually have to sell instead of creating special orders.
Product Inventory
Products are items such as vehicles that you might service or repair after selling them to the customer. That is, they are an item in the database that can be sold, and when sold, are automatically added to the customer’s list of products that can be worked on.
Examples are vehicles, trucks, recreational vehicles, fridges, air conditioners, and chainsaws. The system will let you keep additional information on these products, such as make, model, year, and other comments, and will also be able to list all the work or repairs performed between two dates.
Windward System Five can also track whole goods such as recreational vehicles by keeping track of the cost of the item before the sale, add ones and pre-delivery inspection items. In addition, the system can generate a “wash out” report one level deep to show the costs and income associated with the trade in.
Serialized Inventory
Those items that need to be tracked by their serial numbers can be marked as serialized inventory. For example, fridges, stoves, computers, and chainsaws might all be serialized. Note that if you plan on servicing these items in the future and keeping track of all work you do on them, they should be entered as products instead of serial numbers.
TYPES OF INVENTORY
Several different types of inventories are conducted, depending upon the type of materiel involved and type of information needed. Bulkhead-to-Bulkhead Inventory
A bulkhead-to-bulkhead inventory is a physical count of all stock materiel within the ship or within a specific storeroom.A bulkhead-to-bulkhead inventory of a specific storeroom is taken when a random sampling inventory of that storeroom fails to meet the inventory accuracy rate of 90 percent when directed as a result of a supply management inspection (SMI). It is also taken when directed by the commanding officer or when circumstances clearly indicate that it is essential to effective inventory control.
Specific Commodity Inventory
The specific commodity inventory is a physical count of all items under the same cognizance symbol, FSC, or that support the same operational function, such as- boat spares, electron tubes, boiler tubes, or fire brick. This inventory is taken under the same conditions as a bulkhead- to-bulkhead inventory; however, prior knowledge of specific stock numbers and item location is required to conduct a specific commodity inventory
Special Materiel Inventory
A special materiel inventory requires the physical count of all items that, because of their physical characteristics, costs, mission essentiality, and criticality, are specifically designated for separate identification and inventory control. Special materiel inventories include, but are not limited to, stocked items designated as classified or hazardous. Special materiel inventories also include controlled equipage and presentation silver
Advantage Inventory Control
The Inventory Control gives you the ability to handle your inventory your way. As one of the most flexible and comprehensive modules in the Advantage, you can choose the level of control that best suits your specific business needs. Your inventory can be valued on a LIFO, FIFO or Average cost basis. You can choose to use parts explosions, serialized inventory, parts allocations, vendors, warehouses and an audit trail. The system can also track the quantity sold for each item for the last 12 months and, using this data, provides a sales analysis report to help you better manage your stock. Financing is aided by the serialized aged report that shows which serialized items have been in your inventory the longest and how much you have outstanding. Pricing can be standardized by rounding to a given factor or by being set to a specific suffix. With the Below Minimum report, reordering stock is automatic and accurate. Inventory Control is a stand–alone module that can also be integrated with Purchase Orders, Point of Sale, Billing/Order Entry, Job Cost, Time Billing and Quick Sale.
21–character alphanumeric item number field
Lookup on item number, item description (21 characters) and group (15 character) fields
Tracks serialized items
Allows for superseded, preceded and substitute items
Unlimited additional descriptions can be added to items
Handles markup and gross profit cost basis
Can automatically update item pricing and discounts
Handles core pricing
Produces a re–order report based on minimum stock quantities
Tracks unlimited vendors per item and recommends a ‘best’ vendor
Tracks allocations including explosion allocations
Up to 254 discounts per item, including quantity break discounts
Unit conversions can be defined for each item for both buying and selling quantities
Allows for warehouse transfers and other quantity adjustments
Set up special sale dates for item discounting
Produces physical inventory forms
Imports physical inventory and received quantities from data collected with hand-held computers
Provides up to 255 levels of parts explosion to allow you to identify all components of your assembled stock
Automatically updates cost and price on explosion items based on subassembly changes
• Reports the best and worst selling items in each of eight different categories
• Tracks items by location or quantity in multiple warehouses
• Can automatically generate items based on a template item
• Utilizes Rapid Entry to facilitate entry of item data
Disadvantages:
• conveyor needs to be slightly declined for carton movement (one way);
• may require addition of powered booster units in some applications;
• cannot be used for inter-floor movement except for down travel;
• goods need to be manually pushed when horizontal;
• no positive control over moving carton;
• produces line pressure when accumulating.
• Require efficiency of land
We propose a method for valuing new, recoverable, and recovered assemblies (products, components, parts, etc.) in production systems with reverse logistics. Values of assemblies influence their opportunity holding cost rates and are hence essential for comparing inventory strategies in average cost models. We argue that the proposed method is ‘correct’ from a discounted cash flow (DCF) point of view. We refer to some previous results on valuing assemblies in systems without disassembly of returned products that seem to confirm this. Furthermore, we test the method for a specific example with disassembly of returned products. The simulation results indicate that the method indeed leads to (nearly) DCF optimal inventory strategies.
Packaging
In siemens, with its large product volumes, low margins and fierce competition, is constantly seeking efficiency improvements in its supply chain. The grocery retail industry uses an immense amount of packaging and is directly affected by packaging logistics activities. There is, therefore, a potential for efficiency improvements in the grocery retail supply chain through the integration and development of new systems of packaging and logistics. Packaging handling is identified as one of the main activities that has a strong impact on the overall logistical cost of chain. This research article investigates packaging handling evaluation methods and discusses how these are employed to benefit the industry from the industry, have been used to evaluate packaging and logistics activities. This work, together with a literature review, was used to identify the need for evaluative methods and the present availability of such methods. The results indicated a lack of sufficient and usable packaging handling evaluation methods in today’s grocery and packaging industry especially from a logistical point of view. The paper also highlights the lack of systematization among the few methods used and discusses how these can be used to build a systematic and multifunctional evaluation model in order to utilize the information from different studies to build a knowledge base for the future
Vendor-Managed Inventory
Siemens is a leading global manufacturer, focused on delivering operational services to high-tech companies, needed to take advantage of vendor-managed inventory (VMI) postponement and optimal fulfillment solutions to stay competitive in its low-margin manufacturing marketplace. Its objective was to find ways to reduce inventory redundancy, improve customer responsiveness by reduced cycle times and simplify supplier management and procurement administration. The manufacturer also needed to augment existing infrastructure, while reducing investments in additional personnel, facilities and systems
Vendor Managed Inventory (VMI)
Vendor Managed Inventory supports the efficient flow of materials into the market. Working closely with you and your suppliers, we automate the forecast management process with Web-based software that enables the flow of supply to more accurately mirror store – and even shelf-level – demand.
Move your inventory in and out of our distribution centers and manage demand planning. We can store and stage product for replenishment at our often freeing or limited store rooms. We provide forecast visibility, comparing actual demand against DC-on-hand, store-on-hand and in-transit inventory. When store or inventory falls below pre-determined levels, auto alerts are sent to you and your supplier to prompt replenishment.
Advanced Shipping Notices (ASNs) provide detail on in-transit inventory from suppliers so you have visibility to inventory deeper into the supply chain. This allows for confident commitment to orders based on this inbound flow.
Postpone inventory ownership until shipment to your site. Once your inventory is moved to the we work with your suppliers to transition inventory ownership until demand occurs.
Perform value-added services, allowing you to more efficiently manage the flow of goods into manufacturing or directly to market.
Vendor Managed Inventory (VMI)
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i am an graduate in business management studies and learning computer programming languages since the past 7 to 8 years. i also have practical knowledge in the field marketing and human resources.
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E-Flite Blade Mcx Parts
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Esky Charger
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I need help from my US contacts?
will I be able to charge my UK mobile/cell phone in the US with a USB to socket plug like this one
http://www.esky-heli.com/usb-charger-us-plug-p-10517.html
or will I need a power converter?
I realise Im asking this when you are all in bed but Im hoping you look back over your contacts’ Q’s like I effing have to do every friggin day …..LOL
but will it charge a UK phone or do I need a converter plug?
oh bollocks, I’ll ask in a category that has sane people in it
awww Whispers, have you got a strop on luv?
More likely your only contacts is asleep, Kat
You will be fine with that USB to socket plug.
Its the other plug you need to worry about.
“oh bollocks, I’ll ask in a category that has sane people in it ”
Geez, we all were just trying to help
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Ed Slot Discusses Roth IRA Conversions and Second-to-Die Life Insurance
Jim Lange, JD/CPA is a nationally-recognized IRA expert and sought-after speaker for the financial services industry. Jim’s presentation offers not one, but two themes to advisors. He not only unleashes the best, substantive Roth IRA conversion information, but he also reveals a step-by-step procedure of how to use these proven strategies to dramatically increase production. Whether you are in the business of managing advisors, wholesalers or insurance professionals, hire Jim Lange to explode your business. For ore information, visit http://www.retiresecure.com/speakertour.php or contact Nicole DeMartino, Marketing Director, at 412.521.2732 / 1.800.387.1129 or nicole@paytaxeslater.com.
“America’s IRA Expert,” Ed Slott joins Jim Lange, JD/CPA to cover Roth IRAs and Second to Die Life Insurance
The country most acclaimed IRA expert, Ed Slott, describes the benefits of Roth IRAs, Roth IRA conversions and Second to Die Life Insurance through a menagerie of entertaining and true stories for the avid investor.
Welcome to The Lange Money Hour: Where Smart Money Talks, hosted by Beth Bershok, with expert advice from Jim Lange Pittsburgh based CPA, attorney, and retirement and estate planning expert. Jim is also the author of Retire Secure Pay Taxes Later. To find out more about his book, his practice, Lange Financial Group and how to secure Jim as a speaker for your next event, visit his website at paytaxeslater.com. Now get ready to talk smart money.
Beth Bershok: We are talking smart money and today, wow, this is going to be an information-packed show. Thank you so much for joining us. I’m Beth Bershok and today we have not one, but two nationally renowned experts. First of all, of course, Jim Lange. Jim is a CPA, attorney, he wrote the bestselling book Retire Secure, Pay Taxes Later and, by the way, the second edition of the book came out last month and a week after it came out, Jim, it was a number 1 best seller in several categories on Amazon.com. So congratulations on that one. And we also have with us Ed Slott, America’s IRA expert and you may have seen Ed on PBS because first of all he had the special Stay Rich For Ever and Ever which was the number 1 fundraising public television show throughout the country. He now has a new one, a new PBS special called Stay Rich For Life. There’s also, of course, a book and a workbook Stay Rich For Life – Growing and Protecting Your Money in Turbulent Times. And thank you so much for taking the time to join us today, Ed.
Ed Slott: I’m glad to be here.
Beth Bershok: I think this is the first time that the two of you, Jim’s niche is Roth IRA’s, yours is IRA’s. I think this is the first time that the two of you have ever been together in a forum like this, am I right?
Jim Lange: Yes it is, that’s right.
Ed Slott: It must be like a presidential debate or something.
Jim Lange: I don’t want to say debate, but I’d like to add a couple of words of introduction.
Beth Bershok: A summit, I like it
Ed Slott: An IRA summit
Jim Lange: Reading Ed Slott is really essential information. I mean, I’ve read Natalie Choate, Bob Keebler, Seymour Goldberg, Bruce Steinberg, Steve Leimberg, Gary Lesser, others. But Ed is probably more popular than any of them and he, more than anybody, interweaves great stories, humor and ties it into critical lessons and I just think it is great. His new package Stay Rich For Life at irahelp.com, which is his website, is a tremendous resource. But Ed, getting back to your stories because I think that’s such a wonderful way to learn and you do it so well and one story I remember in particular and this goes back 6 years when I read The Retirement Savings Time Bomb. Before I’ll ask you to recall this story, I’ll mention that Pittsburgh is a great baseball city. In fact, if we lose more than half our games this season we will set a new record for the most consecutive losses of any major sports team ever.
Beth Bershok: I’m looking forward to that, actually, I reckon it’s going to happen
Ed Slott: I have no sympathy for you, I’m a Mets fan and they can’t have lost as many games because they haven’t been around as long, but the way they lose them is so much better!
Beth Bershok: It’s dramatic
Jim Lange: Well, I think we’re going to get into that in a minute actually. But in Pittsburgh, almost 50 years ago Bill Mazeroski hit a homerun in the 9th inning to win the World Series from the heavily favored New York Yankees’ but, and he will be remembered for that homerun, but what a lot of people don’t remember is that he was only a .260 ball player and he was really a great fielder and here’s my question for you, Ed, because this story just sticks in my mind so clearly. Could you tell us about Bill Buckner and the lessons that our listeners can take from Bill Buckner?
Ed Slott: Well Bill Buckner, for baseball fans, is infamous with, you know, failure at the critical moment. But without going through all his statistics, turns out he was one of the greatest baseball players that has ever played. But, when it counted at the end of the game and that’s why I use the analogy with planning for your retirement savings, it’s what you keep that counts, the score at the end of the game not the score at half time, not if your doing baseball in the 7th inning or the 8th inning – it’s how you complete the game. So where Bill Mazeroski was nowhere near probably the player Bill Bucker was, Bill Mazeroski is in the Hall of Fame because at the end of the game, he came up with the big hit and as everybody in Pittsburgh knows, but I got to tell you, a lot of people around the country when I use Bill Mazeroski’s story don’t know that he’s the only one that’s ever hit a 7th game World Series winning walk off homerun. When I say that around the country people, the real baseball fans say Oh no, that’s not true. Joe Carter did it. Joe Carter didn’t do it, just a little baseball trivia, he did it in the 6th game. Bill Mazeroski is still the only one to walk off the World Series in the 7th game. So, poor Bill Buckner had a fantastic career, over 2,000 hits. Actually had 500 more hits than Joe DiMaggio. Had more hits than people like Mickey Mantle and Ernie Banks and on and on and won fielding titles, won the National League Batting Title. But when it counted and that error against the Mets’ in the 86 World Series, you know they practically ran him out of Boston. Actually last year they brought him back for the first time in over 20 years to throw out the first ball and I guess they forgave him, because they won a World Series since then. Bill Bucker will probably never be in the Hall of Fame even though he had a Hall of Fame career. You look at the stats of the people, he’s got more hits than 70% of the players already in the hall of fame.
Beth Bershok: Actually this is the first time I’ve ever heard of Bill Bucker – right here on this show.
Ed Slott: The point is that he had a great career and the analogy to retirement savings. You could have a great career saving, building and investing and having more and more. But if you strike out or drop the ball like Bill Buckner did at the end of the game, the distribution strategies, the planning, your family will remember the same thing about you that they remember about Bill Bucker – that you dropped the ball, you blew it when it counted, even though for 30 years you did everything right and that’s the big problem with retirement planning. People only plan for, what I call, the first half of the game accumulating money, and you know you really don’t have much control over that half the game. You might think you do with investing but there’s bigger, as we found out, bigger forces at work that you can’t control like Wall Street and all that. But the only thing you can control is putting the money in and hoping for the best. Even with a great investment advisor your finding out that you don’t really have much control over how much it grows but you can put it in and you can control the backend of the game, which is to me, the winning half of the game, that’s what I call the winning half of the game in my new book Stay Rich for Life. You can control that because it’s all about the taxes and that’s what people have to focus on now, what you can control. You can’t control the stock market, the greed, the fraud and all of that. But you can control mining the tax code and doing great tax planning for the end of the game when it counts like when Bill Mazeroski hit that home run.
Beth Bershok: Well I think a lot of people are worried about that now. I have to jump in here with this because I saw on your last newsletter Ed that you have a catchphrase for today’s economy which I love. You call it the Yo-Yo Economy.
Ed Slott: Yeah, we’re in a Yo-Yo Economy I call it. A Y.O-Y.O. stands for You’re on Your Own. Never before have people felt so helpless even with financial advisors who now they find out were really just salesmen, brokers selling them stocks and bonds. I think Warren Buffet said it best. He had a saying, When the tide goes out, you quickly find out who’s wearing a bathing suit. And that’s what’s happening now, we’re finding the curtain’s coming off. A lot of these people that call themselves financial wizards or gurus, these brokers and banks and a lot of them really didn’t know what they were doing. They just sold what their company told them to sell. You lost your money, they got bonuses so that’s got to stop and that’s one of the things that I talk about in my book. How to find competent, true financial advisors that actually do the tax planning, the distribution planning where the score matters at the end of the game. Things you can control.
Beth Bershok: You know, knowing you were going to be on today Ed, we had some listeners who sent us questions and we’re going to be getting to those in just a minute, but I know there was something Jim wanted to ask you first.
Jim Lange: Well I was actually attending a professional seminar and I met a guy named Bill Nelson who sang your praises.
Ed Slott: Oh yeah, Bill
Jim Lange: And he told me that the secret to one of the most important things about IRA planning was in The Retirement Savings Timebomb and he gave me the page, it’s the old edition which I still have the old edition because it’s all marked up and I have the new edition too. But I use the old edition because again it’s highlighted and marked up, etc. If you remember, there was the case study of Ralph and Sadie who had $1,000,000 in an IRA and they had a 40 year old daughter named Ruby and you had made some recommendations to Ralph and Sadie and I was wondering if you could tell our listeners what you would recommend to Ralph and Sadie who have $1,000,000 in an IRA and a 40 year old daughter named Ruby.
Ed Slott: Actually it’s funny you mention that because I brought that story back and updated it for my new public television special Stay Rich For Life – same name as the book and I understand from what you’ve both told me that it’s been running in Pittsburgh.
Beth Bershok: Yes, WQED.
Ed Slott: So, in the second act of that show I tell that story, I may have changed the names . I don’t think I used names. But the point I was trying to make again, managing the taxes, doing planning, taking advantage of what I call those golden nuggets in the tax code, which most people don’t. Most people are going to lose their retirement savings. When I say retirement savings, I mean your 401 (k), your 403 (b), your company plan, your IRA because that money has not yet been taxed. So now you have to do something about it to do pro-active planning ahead of time before, what I believe, is huge tax increases come along. Look at the economy, bailout after bailout – Who’s going to bail out America? It’s going to be the very people who did everything right – put money in 401 (k)’s and IRA’s but whose everybody to do this kind of planning like you just referred to and I call it using the biggest benefits in the tax code, and just so you know I do not sell insurance, stocks, bonds, funds, annuities, but I believe in leveraging the tax code – I’m a tax advisor. The reason I said that is because the single biggest benefit by far is the life insurance, the tax exemption for life insurance. The reason I said that is because as soon as I say life insurance people must think I must be selling it or something, I’m not! I’m telling you to use that to leverage your money when you can use the tax code to turn $1 of taxable money into $10 tax-free, that’s a good deal. I would do it all day long.
Beth Bershok: You know actually, let us get back to this in one second. We have to take a quick break, it’s The Lange Money Hour: Where Smart Money Talks. Jim Lange and our very special guest today Ed Slott. The Lange Money Hour: Where Smart Money Talks.
Beth Bershok: The Lange Money Hour: Where Smart Money Talks. I’m Beth Bershok and we have two, we have a great guest today, Ed Slott who is America’s IRA expert, and Jim Lange of course. We were just in the middle of an insurance story that Ed was talking about and Jim if you want to continue on with Ed’s idea there.
Jim Lange: Well, we were talking about Ralph and Sadie who have $1,000,000 in an IRA and a 40 year old daughter named Ruby and Ed was mentioning a little bit about some of the benefits of the tax code because he’s very concerned with future taxation and was talking about life insurance.
Ed Slott: I’m excessively concerned about future taxation! I think we’re all going to hit much higher taxes, so we have to do something to move our money now to tax-free accounts and the point to the story was, a spouse is usually better off getting free and clear money – totally tax-free money. Which is, nothing better than life insurance. There are no required distributions and children and grandchildren are generally better off with the IRA’s because they can stretch or extend distributions over their lifetime. So, that was the point to the story instead of what most people would think, Well, I want my wife or husband to have the IRA, you’re better off having life insurance which will never be taxed – the state or income tax, and getting the IRA’s out to your kids, estate tax free, which you can do now even more so since the exemption for estate tax has been increased to $3,500,000. That opens it up for a lot more money if you have the much. You know the less you have the more important it is to protect what you have, even if you have a lot more you can give up to $3,500,000 or leave should I say, $3,500,000 of IRA to kids and grandkids now estate tax-free.
Jim Lange: Ed, let me ask you this. So basically you are saying if the husband is the one with the $1,000,000 in the IRA, you’re saying to consider a life insurance for the husband.
Ed Slott: Well, in the example I said the husband had a $1,000,000 IRA and normally when somebody comes in, probably the same thing with your clients if somebody came in with that scenario, the wife would be the beneficiary because that’s what everybody is told on the IRA. I’m saying to change that, to make the daughter the beneficiary but then the wife is going to say “Well, what am I going to live on?” and that’s where the life insurance comes in. But generally what I end up doing is changing the IRA beneficiary back to the wife anyway, but adding the daughter as contingent beneficiary so this way the wife is in complete control. What the wife really wants, not so much the IRA, she wants financial security. She looks at the IRA as financial security, but that’s not really a secure future when you don’t know how much of that is going to be taxed when you’ll need it most. When she reaches her hand in there when she’s the most vulnerable and needs it the most, taxes could eat up 50% to 60% of it, depending on future tax rates and estate tax rates. You’re better off with the life insurance which is a sure thing – you have it free and clear and she can also get the IRA if she wants, but by naming the daughter contingent she has the ability to refuse that inheritance, another benefit in the tax code, called a Disclaimer, where it could go right back to the daughter after death anyway. I know that was a mouthful.
Ed Slott: That’s why I’m trying to get this story down. But the point is to look at the life insurance, leverage taxable money now. It even pays to take money out of your IRA now, pay tax at low rates – we’re at very low rates now, and leverage it into life insurance.
Jim Lange: Ed, by the way, you and I are very much on the same wavelength on a lot of areas. I’m a big fan of disclaimers as you know, Lange’s Cascading Beneficiary Plan is basically an estate plan set up with disclaimers so I’m a little more comfortable naming the surviving spouse first and letting the decision of who gets what..
Ed Slott: Right, that’s what I was getting at, that she can have it both ways. She’s better off with the life insurance as opposed to an IRA. She doesn’t have the life expectancy to get as much out of the IRA and the life insurance removes the uncertainty of what future tax rates may be.
Beth Bershok: Basically the whole idea behind this is to save taxes, to save the taxes at the end and..
Ed Slott: To me financial security is having free and clear money. The last thing you need in retirement is you reach in your hand when you need it most and the government takes 70% of it, that’s the time you need to keep 100% of it.
Beth Bershok: Our guest is Ed Slott and are you guys ready for a question we had tossed out from a listener?
Ed Slott: I’m ready.
Beth Bershok: Oh Jim say’s here’s one more question. We’ll let Jim do his question first then we’ll get to some other questions.
Jim Lange: Alright, Ed, I have also been an advocate of the combination of life insurance and IRA’s and retirement plans and have been so for more than 20 years now. One of the things that I do in my practice, which is maybe a little bit different and I thought I would ask you comment on this. What I often do is Second To Die Policies. I’ve actually run numbers and your way works out better and I’m the first one to admit that. When you run numbers, it works out better for people in terms of total wealth to the family to do what you are suggesting, which is to insure the husband’s life, have that basically go to the wife and then have the IRA going to children and grand-children. What I have been doing and maybe I guess is conservative, yours is more conservative, mine might be a little different in that it might be a reduced premium, is I often use Second-To-Die or Survivorship Life Insurance and that will pay not at the first death, but at the second death and I tend to use guaranteed policies so that there’s no question if it’s not a whole life situation where it depends on investment results etc. I was wondering if you could comment on that, I know its not quite the way you do it.
Ed Slott: I do all different ways actually; it depends on what’s best for the client. It depends on how much money might be needed at the first death. The problem with my scenario, is sometimes you never know who’s going to die first too. At the second death obviously if you don’t need the money, if they have enough other assets to live on without the life insurance then of course the Second To Die, because you’re spreading the risk over two lives so it depends upon each case. But when there’s a case where a spouse is worried about financial security if the one with the IRA owner, you know that has a large IRA and she has nothing let’s say, then I want her to definitely get some money that is tax-free as much as possible at the first death.
Jim Lange: I think that sounds good. So if we are concerned with both spouses we might consider a traditional policy on the IRA owner and if there is more than enough for both to do the Second To Die. I sometimes say well there is a certain gifting budget and you want to allow some money for children, just plain old regular gifts, some money for 529 plans and then also some money for life insurance also.
Ed Slott: If they both have enough to live on then it’s probably more of a benefit to do a Second-To-Die policy. If neither spouse is worried if there’ll be money when the first one dies.
Beth Bershok: Ed Slott, our guest today, America’s IRA expert and Jim Lange on The Lange Money Hour: Where Smart Money Talks. We do have some questions from listeners and we will be back with that in just a minute. The Lange Money Hour: Where Smart Money Talks.
Beth Bershok: Talking more smart money, The Lange Money Hour: Where Smart Money Talks. Jim Lange and we have a great guest today, America’s IRA expert, Ed Slott the author, and it’s a PBS television special called Stay Rich for Life and if you want to check all of his information out it’s irahelp.com. That’s Ed’s website, irahelp.com and thank you so much again, Ed, for joining us today.
Ed Slott: No problem, glad to be here.
Beth Bershok: We have so many questions from listeners who emailed us knowing you were going to be on the show and I discovered a theme in these emails. Everybody seems to be completely confused about the RMD suspension for 2009 and I assume, Ed, that you are also using this as a strategy. I know Jim has been using it as a strategy to convert to Roth IRA’s. But here’s the question, and this comes from a retired dentist in Indiana. His question is, he’s skipping the 2009 distribution but he wants to convert his IRA to a Roth IRA, and he wants to know if he skips the distribution is he still allowed to do that?
Ed Slott: Yes, well providing he qualifies. In 2009 your income cannot exceed $100,000 that’s the only restriction. But a better strategy that I’ve been using for some clients who are willing to do it, even though they don’t have to, this is clients over 70 ½ that normally would have required distributions. Now they don’t have to take them. Now on the surface, that looks like a good thing, but I’m telling them that you’re better off getting the money out while you know what today’s tax rates are, which are very very low – almost the lowest they’ve been in most people’s lifetime. So, it’s best to take the money out anyway, and if your income doesn’t exceed $100,000. Let’s say you can convert to a Roth, you qualify to convert to a Roth then you should convert. Normally they wouldn’t have the opportunity to convert to a Roth because when they take required distributions, those distributions are not eligible to be converted to a Roth but now this year only, since those distributions are actually voluntary and not required, they can be converted to a Roth. So, it’s a real window of opportunity to convert it to a Roth now.
Beth Bershok: Actually, Jim, do you want to chime in on that? Because Jim has been using this as a strategy.
Jim Lange: Well I agree with you 100% and the reason why I am such a big fan of making Roth IRA conversions in 2009 for people who qualify is because that will be the lowest tax year and the lowest tax bracket they will likely ever be in. So let’s say your 70 or older, you have money in an IRA and normally, let’s say you have social security, pension, interest, dividends – whatever you have. Normally, the minimum required distribution from an IRA is going to push you into a higher tax bracket. So if you were to make a Roth IRA conversion you would have to pay taxes at the higher rate. Now that you don’t have to take a minimum required distribution, your Roth IRA can be converted for cheaper than it will ever be. I used to say Do the Roth IRA conversion after you retire but before minimum required distribution when you’ll be in a low tax bracket. 2009 is now a very special year because we can convert at the lowest tax rate that we’ll likely ever be in.
Ed Slott: Right, I agree with that. I don’t think people realize, you know there’s a lot of complaining about taxes all the time, but most people don’t realize how good they actually have it now. On my book, Stay Rich for Life, which if you’re interested you can get it on my website irahelp.com. It’s my website, you can even ask questions, you can type in questions if you’re listening now, you can type in questions right on the front page of the website and they’ll be answered by true experts. And if you scroll down you’ll see a picture of Stay Rich for Life – the book we’re talking about and if you click there is just goes right to Amazon.com and it’s probably the best price to get it. But whatever price you get it at it’s going to be well worth it if you read it. Page 7 in that book, I give you a history of tax rates.
Jim Lange: That page that I’m on right now
Beth Bershok: He is, he literally is on there.
Ed Slott: It’s really an eye-opening thing when you see rates in the 70s, 80s and 90s. If you said that to people now, people now think tax rates are high! Back in the years, I just want to isolate the years of the baby-boomers which were 1946 to 1964. The top federal tax rate, that’s the marginal top rate paid by the wealthiest, exceeded 90%, 9 0 in case you’re banging your radio now. Did he say 90? How can that be? What’s left for me? Nothing! Exceeding 90% each of those years of the baby-boomers except the last year ’64 where it was only a paltry 77%. Now the point I’m making is that those years are the years the baby-boomers were born. They didn’t need much from people. Now they’re on the other side of the fence collecting. The first baby-boomer just started collecting social security last year 2008. They’re going to be on top of all our other fiscal and economic problems and bailouts. The baby-boomers 80 million strong are going to need more from government of some form or another, there’s going to be some kind of dependent which will push pressure on tax rates to go up even further. So that’s my point, tax rates are going to go up and now is the time to act. Now is the time to do these Roth IRA’s, take money out even if you don’t need to. Leverage it into life insurance and get money away from the taxman now. I call it Buying Taxes on Sale because that’s what they are now.
Beth Bershok: I think we should mention the 2010 tax law change too while we’re talking about these Roths.
Ed Slott: Yeah well anybody can have a Roth conversion in 2010 – everybody qualifies.
Jim Lange: I think that’s going to be a phenomenal opportunity for tax payers who now have incomes of more than a $100,000 and one of the things I like to do in my practice is, we call it running the numbers. Where we actually try to come up with a long term Roth IRA conversion plan, usually multiple years, and I think 2009 is great because we will be in a low tax bracket for the people who are 70 and older. 2010 is going to be phenomenal for millions of people who previously did not qualify for a Roth IRA conversion.
Beth Bershok: And there seems to be some confusion about that too. I have fielded some questions even at the office. Is 2010 the only year you’re going to be able to do that? Right, at this moment it’s endless, it’s 2010, 2011
Ed Slott: The provision is repealed forever but the big deal about doing it now as opposed to waiting until 2010, now you know what the tax rates are. Now what I’m saying, if people aren’t getting it, is to pay taxes now. If it goes against the grain, I’m a CPA of every accountant who has ever been born. Every accountant has been hard-wired to always pay taxes later, but I got to tell you that I’m worried about what our future tax rates might be. So, I guess now that makes me a recovering accountant because I think it’s better to pay taxes now and get the government off your back forever.
Beth Bershok: With the Roth?
Ed Slott: Yeah.
Jim Lange: With the Roth and Life Insurance.
Ed Slott: It’s not only taxes are on sale, it’s a double sale on Roth IRA’s
Beth Bershok: Is like a bogo right now, buy one get one.
Ed Slott: Yeah it’s better than that. It’s a double sale, rates are low and values are low. They are depressed because of the stock market – take advantage of it!
Beth Bershok: We should mention too that when we give all of this information there are some people that will attempt to do all of this without speaking to a financial professional.
Ed Slott: No no no
Beth Bershok: You really should have a financial professional look this information over first.
Ed Slott: That’s one of the key themes of my book Stay Rich for Life. The point is to educate people. I want people to be educated to be empowered to know how much more there is to know and to demand more from their financial advisors, but not to do it yourself. You want to know that your advisors knows and there’s enough in this book, and other resources, and that’s what you should do. You have to educate yourself to demand more, make better choices – people who are better educated always keep more of their money.
Beth Bershok: You said that you mentioned in your book picking an advisor is extremely important, but honestly how do you pick a good one?
Ed Slott: Well I give you guidelines there. To me, the first test I want to see an advisor, if I’m a consumer I want to know that an advisor has invested in his education and a lot of advisors say they know all about this. Actually, when I run lots of programs, probably the same with Jim when he runs programs, I have advisors that come to the programs, and many of them think they know it all already but they come anyway. Usually on my longer programs the multi-day programs 2, 3, 4 day programs, within two hours of the first day I have advisors coming to me telling me I didn’t know how much I didn’t know. The problem with most advisors, they don’t take a lot of education in helping you to protect your money – in the tax planning, the thing that is essential that I’m talking about because they don’t know that they don’t know. And if you ask your broker or your banker “Do you know this?”, “Oh yeah we know everything.” You know, anybody says that you because nobody can know everything. I study this full-time, I’m sure Jim does too and I have questions almost every day that come up. You want an advisor that has gone to courses. Matter of fact, in the companion workbook to Stay Rich for Life Book, there is a companion workbook. I actually give you questions to ask financial advisors to see if they know this stuff. You might say “Well, what can you ask an advisor?” How would you know if he’s giving you the right answer? Because that would be the natural thing. It’s like asking a doctor about a medical procedure, he could tell you anything he wants, you wouldn’t know the answer. So I created questions here that you would know if your advisor knows. For example, I’ll give you a simple one, “When was the last time you went to a seminar on IRA or retirement distribution planning?”
Beth Bershok: This is a question to ask your advisor?
Ed Slott: Yeah.
Beth Bershok: Right.
Ed Slott: They might say Oh we go all the time and I have in there what I call BS detectors.
Ed Slott: Very innocently you say Oh that’s interesting. Could you show me the course manual from the program?
Ed Slott: You know right there if you see a dear in the headlights look you know you got a guy, and they tell you they take education you have to be very careful. When I say education I don’t mean education on how to sell your products – sales training. That’s something completely different. I’m talking about education on the tax planning. Or a good question to ask “Do you have any books on this topic?” and they might say “Oh yeah I have a book. I have Jim Lange’s book Retire Secure”. Then on my BS detector would be Oh that’s nice – ask them to open it. If the book cracks when it’s opened you know that’s the first time that book’s been opened – I would run! So there are certain questions you can ask to get that sixth sense, that feeling like Is this guy really at the top of his game or is he really just a salesman, a stock-jockey? Those are the guys you got to get away from. A lot of the banks and brokers don’t know anything about this, I’m sure Jim would concur with me. And it’s not only the banks and brokers, other CPA’s like myself, and attorneys, you know they might know. It’s more dangerous even with the CPA’s because you figure if you go to a CPA they must know all about taxes because those guys are tax guys. But this is a specialized area, the tax planning for retirement distributions. Most CPA’s are not up on these things and make a lot of mistakes. So you have to have an advisor who has training in the second half of the game so we can hit that homerun like Mazeroski for you. You’re not going to hit that homerun, you’re going to need an advisor to do it for you.
Beth Bershok: And this is in the workbook.
Ed Slott: It’s in the workbook. Even on our website you can find trained advisors all over the country, there are about 500 or 600 advisors that have taken extensive training with our firm. But that’s not the be all and end all. If you’re not comfortable with your bank or broker, a lot of these brokers are not even around any more.
Beth Bershok: Jim and Ed we’ll take a quick break. We will be right back with Ed Slott, America’s IRA expert and Jim Lange. It’s The Lange Money Hour: Where Smart Money Talks.
Beth Bershok: Talking more smart money The Lange Money Hour: Where Smart Money Talks. I’m Beth Bershok, Jim Lange and our very special guest today – America’s IRA expert, Ed Slott. Just a moment ago we left off with something I think is on everybody’s mind. The economy has been so turbulent and you’re wondering to yourself does my advisor know what he’s doing? and in Ed’s book Stay Rich for Life it comes with a workbook where you give Ed some questions that you can ask advisors just to feel them out, to see if they really know what they’re talking about and we were just talking about that a moment ago. How do you know? So in Ed’s workbook and I’m sure Jim you think the same thing, there are people out there who are giving advice right now that are probably not at the top of their game.
Jim Lange: Well one thing that I’ve noticed and I give a lot of talks to financial advisors that get continuing educational credits is I’m kind of amazed at the level and I don’t mean the high level. But at the lack of knowledge about IRA’s and retirement plans for a lot of these advisors and I sometimes worry about some of their clients because I wonder if they’re really getting the best advice. Sometimes I find that my own seminars that I give for consumers to educate consumers are really not all that different than the ones I give for advisors at least in the 2 hour talks and sometimes I get as good or better questions from the consumers.
Beth Bershok: And actually I want to jump in here because you have one coming up this Saturday. Its Two New Tax Laws That Create Shocking Opportunities for Wealth Preservation. We are running out of time to RSVP but you can still do it so let me give the phone number. It’s 1-800-748-1571. It’s going on at Pittsburgh Golf Club in Squirrel Hill and there are two. 9:30 to 11:30 and 1 to 3. So you should also tell us which one of those you want to go to. 1-800-748-1571 and you can also check out the website which is retiresecure.com. Ed, any other tips you want to add in the meantime, to what you should look for in an advisor?
Ed Slott: Well again, I agree with everything Jim said but even more so I train advisors and consumers. What you have to know is, it’s not a slam on these people who sell stocks and bonds – that’s part one of the game, helping you accumulate money. What I’m saying is that you need an advisor, like a doctor you go to a specialist for different things, maybe that’s a better analogy. When you know you’re coming up on retirement and you’re accumulating this money, you have to move to an advisor that has a specialized knowledge on how to get that money out in the most tax-efficient manner that can do the tax planning. The problem with most people who call themselves financial advisors; they don’t really know or even address any of that. They think that if they make you a lot of money that’s fine and that is great. But keeping it, it’s the score at the end of the game. Bill Buckner, back to the Bill Buckner story had great statistics. He accumulated tons of great statistics but at the end of the game he lost it all because he blew it. He blew it by not being able to perform in that key moment. You need an advisor that can perform in the second half of the game – the distribution phase. The things you can control – the tax planning. Most don’t, it’s so bad I would say that about 99% of advisors don’t have that knowledge.
Beth Bershok: 99%, is that what you just said?
Ed Slott: Yeah, you might be thinking Well Eddy you saying that only 1% of advisors know anything about this?
Beth Bershok: That is what we’re saying.
Ed Slott: No, it’s much less
Jim Lange: You’re pretty tough, Ed.
Beth Bershok: Wow!
Ed Slott: I can tell from the advisors that take my programs and training and go to Jim’s training.
Jim Lange: Ed’s programs by the way are wonderful. His two-day programs and all of them.
Ed Slott: I admire those advisors and those are the best of the best because at least they are investing in their education for their client’s benefit. In these days, where there is such a lack of trust, you need to do two things. Expect more from your advisor, you need to make sure they’re educated, they have this specialized knowledge and that they put your interest first.
Beth Bershok: I think the workbook that you have with that exercise is excellent. You can check it out at irahelp.com and when you click on that website it’ll guide you to where you can buy it. Can I toss out another RMD question to you guys?
Ed Slott: Yeah
Beth Bershok: Because this one I got and find this really interesting. This came from a guy named Bob in Pittsburgh, he’s a retired engineer but here’s his question and it really is probably happening to a lot of people with the RMD suspension for 2009. Some people were unaware that that had happened at the end of the year that you could suspend your RMD for 2009, and so they had it taken out in say January. Then when they caught on that they didn’t have to take the distribution they stopped but Bob’s question is, Can they go back and give the money back for January?
Ed Slott: Only if it’s within 60 days.
Bershok: Oh 60 days, that is the limit?
Ed Slott: Yep, that’s the only way they can put the money back in and that’s only if they haven’t done a previous rollover from that IRA within the past 12 months.
Beth Bershok: Any other strategies you guys would like to hit for, these particular economic times. This is a time it’s hitting everybody really.
Ed Slott: Well in my book my theme is to take control of your money, of the things you can control, and you can control your tax liability and the planning for what I consider the most important part of the game, which I call in my book Stay Rich for Life, ‘The Winning Half of The Game’. That’s the one that Bill Mazeroski played in and those are things you can control, and it’s time to take control. Don’t just leave everything to advisors, you’re going to have to step in and get educated so you can demand more from your financial advisors and get your plan. If you don’t do anything, doing nothing now is not an option. If you don’t do anything you’ll get a plan but it’ll be the government plan which is, let’s face it, our tax system is a penalty on savers. The government plan will wipe you out so you either make a plan now by taking action or you get a plan. The plan will be done by you, or to you, and it’s your choice. I’m saying to act now, take action in small consistent steps.
Beth Bershok: Jim, any other strategies you would like to add?
Jim Lange: Well I’ve been a Roth IRA conversion advocate for a lot of years but I would say that 2009 and 2010 are going to be the best years ever because A.) if you are 70 or older you don’t have a required minimum distribution for 2009 which is going to put you in a lower tax bracket. So I think that’s going to be a good year to take a look at a Roth IRA conversion. 2010, when anyone regardless of income, will be able to make a Roth IRA conversion. I think that’s going to be a great entrée, and the other thing is, I would say that those two factors alone would be good to have Roth IRA conversions. We have two more factors, though, that make it even more compelling. Number 1 is, I agree with Ed, I do believe we are in a low tax environment even though it might not feel like it, and if you look historically we certainly are, and if you look at what s going on in the economy, I can’t see how we could not have higher taxes later, and if you could create literally a tax-free dynasty for yourself, children, grandchildren. So I like doing Roth IRA conversions. The other reason why I like it is, if you do believe in the long-run that the market will come back and you can pay taxes at a low rate and on a low amount then that’s even better, and you should, to me again, Ed’s point about having a really good advisor. Last year we did a lot of Roth IRA conversions. For every single client that we did a Roth IRA conversion for we called them and said Hey, if your Roth IRA went down which frankly most of them did, We want to re-characterize that Roth IRA So, I think you have that additional protection in case you’re afraid that you’re going to make a Roth IRA conversion and it’s going to go down even further.
Beth Bershok: We’ll be back in just a minute here. It’s The Lange Money Hour: Where Smart Money Talks. Jim Lange and special guest, Ed Slott who is the author by the way of Stay Rich for Life. The Lange Money Hour: Where Smart Money Talks.
Beth Bershok: Talking smart money. The Lange Money Hour: Where Smart Money Talks. Our special guest today is America’s IRA expert, Ed Slott who is also the author of Stay Rich for Life which is a PBS special as well. The hour has gone by so fast! Ed, Jim, we’re down to our last few minutes! I think we could have made this show 10 hours and we still wouldn’t be out of material!
Beth Bershok: I have a question that I wanted to toss out to you. This one comes from a listener named Fred and this is Fred’s question. He just retired at the end of 2008 and his question is subject to limitations – can all the after-tax money in a 401 (k) plan be converted to a Roth IRA while all the pre-tax 401 (k) money is converted to a traditional IRA.
Ed Slott: The answer’s yes if you do it the right way. It depends on the 401 (k) plan if they’re willing to separate the check. You’d have to first get rid of the taxable money and roll that to an IRA and then all you’d have left is the after-tax money, or if they give you two checks, that’s the best way. You put the taxable money in the IRA and the after-tax money goes right to a Roth tax-free.
Beth Bershok: That was the second part of his question. He said If I can actually do this, does that imply no taxes are due on the conversion?
Ed Slott: That’s right, but on the other hand, if they give you one check and you put it in your IRA then you have to do a pro rata allocation and not all of the after-tax money can come out tax-free. So the way to do it is first get the taxable money out of the 401 (k) into the IRA – that’s a tax-free roll over. Then the after-tax money you go right from the 401 (k) and when I say right from they might give you 2 checks if they’re willing to do that. Then it can go to the IRA, to the Roth IRA, I mean, tax-free from the 401 (k).
Beth Bershok: So it also depends on what your plan is willing to do?
Ed Slott: Yeah well they could mess you up. Remember, this is one of those areas of the tax law where the IRS rules, believe it or not, are much more liberal and flexible than the plan’s own rules. The problem is, the law of the plan is the law of the land.
Jim Lange: I think that that’s a great analysis Ed. I’ll chime in for two things. When somebody is retiring it is really critical they take stock, see what all their options are. They have to check for NUA which we haven’t even talked about today – net unrealized appreciation which might qualify for capital gains treatment, which is even more favorable.
Ed Slott: I didn’t want to use the word appreciation on this show.
Jim Lange: That’s a good point.
Ed Slott: People think I’m out of touch!
Jim Lange: By the way the numbers on that let’s just say that there’s $50,000 in effect. By the way, after-tax dollars in a 401 (k) is essentially conceptually the same as a non-deductible IRA and a lot of our listeners have non-deductible IRAs, and if they can make the conversion of that and isolate it and just make that conversion just as an example, if they do that for $50,000. 40 years from now their family will be $500,000 better off.
Beth Bershok: We actually have graphs to show that as a matter of a fact.
Jim Lange: Yes so that’s one of my favorite topics. If that situation already occurs, that is there is already after-tax dollars and pre-tax dollars, let’s say inside an IRA, there’s some very interesting techniques and I can see you waving your hands. I’m not going to have time to completely explain, that you can isolate that particularly if you have some kind of retirement work.
Beth Bershok: Well I think what it boils down to because both of you were talking about just this second, it sounds complex. It sounds like again we have to get back to you need a competent advisor. There is no way you could attempt to do that yourself or you should attempt to do that yourself.
Ed Slott: Remember, even the savviest advisors have to work hard to keep up with that knowledge but that’s their business – you’re not in that business. What you need to do is get educated so you can learn as much to find out if you have the right advisor guiding you.
Beth Bershok: I really hate to wrap this up; this is just too bad it’s been great. Ed Slott, Jim Lange together really for the first time and I want to give your website again. It’s irahelp.com, the book is Stay Rich for Life but it comes with a workbook, which I think could be very, very helpful for people. Can you buy that separately?
Ed Slott: Yeah but it goes along with the theory of the book. But yeah, if you get is separately. The point of the workbook is to put your ideas and knowledge into action; it’s all about taking action.
Beth Bershok: And it’s also a PBS special Stay Rich for Life, your website irahelp.com. Jim’s website retiresecure.com and I want you to check this out. For one reason we’re going to have the audio to this show posted too. So if you want to review any of the ideas that Jim and Ed have been talking about, it will be on retiresecure.com and Jim you have a Roth seminar coming up this weekend. It’s 9:30 to 11:30 or 1:00 to 3:00 at the Pittsburgh Golf Club in Squirrel Hill. 1-800-748-1571 if you would like to RSVP to that we really do have limited space on that one and you can again go to retiresecure.com or irahelp.com. Ed, thank you so, so much for joining us. We really appreciate it, is has been….
Ed Slott: I think it was great, I was glad to be on with Jim.
Beth Bershok: It has been great information too; thank you two for sharing that. It’s The Lange Money Hour: Where Smart Money Talks. Real quickly I do want to say, our next show which is going to be one week from tax deadline, it’s April 8th. One week from the deadline, so we are going to be talking taxes on the next show. The Lange Money Hour: Where Smart Money Talks.
Jim Lange, JD/CPA is a nationally-known IRA, 401(k) and Roth IRA conversion expert. Jim’s best-selling book, Retire Secure! Pay Taxes Later is in its second edition and enjoys glowing testimonials from the industry’s best including Ed Slott, Natalie Choate and Bob Keebler. For ordering information, please go to www.retiresecure.com. There you can obtain information on Jim Lange, Retire Secure!, and Jim’s keynote speaker availability. You can also access our treasure chest of radio show archives. Download the archives of The Lange Money Hour: Where Smart Money Talks.
About the Author
Jim Lange, JD/CPA is a nationally-recognized IRA and Roth IRA conversion expert and the best-selling author of Retire Secure! Pay Taxes Later. For more information on Jim Lange or if you are interested in hiring Jim as your next keynote speaker, visit http://www.retiresecure.com/speakertour.php.
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