Welcome to the Datalliance Vendor Managed Inventory (VMI) newsletter.

At Datalliance, our continuing focus is to deliver an industry leading VMI solution that delivers business value to our customers. To determine the value provided we periodically analyze segments of our customer base. In the feature article of this newsletter "Business Results of VMI - Two Year Analysis" we analyzed the sales, inventory turns and customer service of locations that had used VMI for two years. We were pleased to see significant improvements in all three of these key business metrics. I'm confident that you will enjoy reading the entire article on this topic.

In mid May we delivered a new release of Datalliance that focused on enhanced user productivity and inventory management capabilities. This press release and the Datalliance Operations/ Data Center Update below will give you an overview of our latest efforts to enhance both the functionality and technical operation of Datalliance.

I also ask all of our customers to mark your calendar for the Datalliance Customer Forum scheduled for August 15-16, in Cincinnati, Ohio. We held our first Customer Forum last year and the response was very favorable. Approximately 75% of our customers were represented and when surveyed, 100% said they received considerable value and encouraged us to hold a similar event in 2006. We look forward to another strong turnout this year.

As always, I encourage you to provide us with input on topics for future editions of this newsletter. Please feel free to contact me at carl@datalliance.com with your ideas and suggestions. I hope you enjoy the newsletter!

Carl Hall
President, Datalliance

To analyze the business benefits of VMI, we looked at the key business metrics of sales, inventory turns, and out of stocks before and after VMI for locations that have been using VMI for two years. We analyzed the data for both years and then calculated the cumulative impact over the full two year period. The data identified that all three of the business metrics realized an initial improvement in year one and continued to improve in year two, posting very substantial cumulative improvement across all of the metrics for the full two year period.

In year one, VMI's greatest impact was in inventory management. By having the right products available, at the right time, inventory turns increased and stock-outs decreased. Predictably, in year two, sales increased as VMI helped suppliers and distributors with a more effective product mix, better fill rates, more items to sell, efficient product introductions and improved pricing and promotion strategies. Our sample set contained 65 location relationships spread across 12 distributors representing over 20,000 stock keeping units.

VMI has proven to be an effective tool to improve sales, increase inventory turns, and enhance customer service. The analysis concludes that sales, inventory turns, and customer service, all improve in the first year of using VMI. More significantly, the analysis shows that these improvements are not a one time benefit. Rather, the business results continue to improve in all three of these critical business metrics in the second year of VMI.

Siemens Energy & Automation Selects Datalliance

Siemens Energy & Automation provides complete electrical products and services to customers worldwide and has selected Datalliance to enhance existing relationships with key customers

"Our goal is to advance the performance of our customers," said Russell Hughey, National Account Manager, Siemens. "Datalliance provides another tool to drive such advancement and is the best match for our industry. Their 'Software as a Service' model allows us to satisfy the end-customer demand for our products and bolster our partnership with key customers."

Simplot Selects Datalliance for Vendor Managed Inventory Solution

Simplot is a multi-billion dollar international food and agribusiness corporation

Steve Pochardt, Simplot's IT Director of Supply Chain Integration commented, "After a thorough evaluation, we selected Datalliance because of their proven track record to effectively and efficiently create VMI programs. Their Software as a Service approach was the driving force behind our decision and best suits our needs for a top quality program with achievable ROI. Their sole focus on VMI, constant dedication to customer satisfaction, and leadership in the marketplace will serve us today and into the future."

Datalliance Customer Care Manager Receives Masters Degree in Supply Chain Management

Tammy Hoskins, Datalliance Customer Care Manager, has completed The Master of Science degree program in Logistics and Supply Chain Management at Wright State University. The program is designed to provide professionals with graduate education that will enhance their leadership careers in the fields of logistics and supply chain management.

This impressive accomplishment enhances the expertise of the Datalliance team and reinforces the quality service our customers receive each day.

Datalliance Executive Recognized in Supply & Demand Chain Executive Magazine as "Pro to Know"

Carl Hall, Datalliance President & CEO identified as technology "pioneer" for efforts in developing Vendor Managed Inventory solutions

Carl Hall, Datalliance President & CEO was recently recognized as a software industry "pioneer" by Supply & Demand Chain Executive magazine. The magazine annually dedicates an issue to recognize "Practitioner" and "Provider" executives that have had a significant impact on the supply chain function.

"Technology leaders such as Carl Hall are critical to the continued development and evolution of solutions that support the supply chain function," stated Andrew Reese, editor of Supply & Demand Chain Executive...

Datalliance Enhancements Focus on Improving User Productivity and Inventory Management

Datalliance announced the immediate availability of the latest release of Datalliance, a comprehensive internet-based VMI (Vendor Managed Inventory) e-commerce service. The new release improves inventory management functionality and enhances end-user capabilities to perform daily tasks more accurately and efficiently. This release supports Datalliance's ongoing development objectives of enhancing user productivity and improving information access through flexible reporting.

Datalliance Operations/Data Center Update - Reliability and Scalability Enhancements

Continuous improvement is a way of life in all areas of operations. Over the past few months, significant improvements have been completed in the areas of operational capacity and business recovery.

Customer Care Tip - Enhanced Distributor Period Comparison Report

Datalliance recently enhanced the capabilities of its distributor period comparison navigation. The enhancement is another example of the ongoing focus on customer satisfaction of Datalliance.

The 2006 Datalliance Forum is scheduled for August 15-16, in Cincinnati, Ohio. The two-day program will provide users of the Datalliance service opportunities to learn from peers and see how other Datalliance users are employing the proven capabilities of VMI to support a wide range of supply chain initiatives.

Leverage your investment in Datalliance - mark your calendar now to attend the 2006 Datalliance Forum, August 15-16, 2006.

Webinar - VMI 101: An Introduction to Vendor Managed Inventory on August 7, 2006 at 2PM EST

Datalliance will present an overview of VMI and examine the competitive advantages it provides. The webinar is presented by Datalliance Staff and is open to the public.

For more information or to sign-up, please contact us at info@datalliance.com

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