Annual revenues exceeding €50 million
Challenge
The client lacked a unified planning system, leading to misalignment between production and procurement schedules. This disconnect resulted in high inventory levels of raw materials and finished goods, ultimately causing significant product waste due to shelf-life expiration.
Solution
The project focused on creating a cohesive demand planning process and enhancing communication between sales and operations teams. The first step involved developing a demand plan for finished goods based on two years of historical sales data. The demand plan served as a baseline and was adjusted with inputs from the sales and marketing team regarding upcoming promotions and pricing strategies.
Key components of the new planning approach included:
- Planning Horizon: A four-month planning horizon was established to align with the longest lead time for sourcing materials.
- Integrated Production Scheduling: Daily and weekly production schedules were created based on the demand plan.
- Materials Requirement Planning (MRP): The demand plan was translated into a detailed MRP using product specifications (bills of materials) to calculate precise material needs.
Regular weekly reviews of plans ensured adjustments based on evolving sales forecasts and operational considerations. This integrated planning function allowed for more dynamic and effective procurement, production, and sales coordination.
Outcome
The implementation of an integrated supply chain planning system led to significant improvements:
- Product availability for delivery increased from 80% to 95%.
- Waste due to product expiry was reduced by 50% within the first year.
