Dairy Products Supply Chain Planning at leading purchasing group Euromadi


ON BOARD INTELLIGENCE (OBI) is proud to announce that Euromadi, a leading Spanish purchasing group has achieved excellent results planning its dairy products supply chain with Planning Studio 100.

After a successful implementation with frozen products, achieving customer service levels exceeding 95% on a daily basis measured as full order lines and 97% of units whilst achieving an inventory turn of over 18, Euromadi decided to apply OBI´s technology to dairy products.

In the past, Euromadi had been supplying dairy products to customers with a minimum lead time of 10 days, working on a manufacture to order model, with no extra inventory due to the short self-life of the product. Sales orders were being accumulated during the current week and on Monday of the next week (week 1) the sum of those orders was ordered from the manufacturer to be shipped at the end of the week 1. As a result customers ordering on Friday were receiving the goods no sooner than two Mondays later.

The key driver to implement Planning Studio 100 was to reduce the 10 days to 48 hours and bearing in mind the short shelf life of dairy products, Euromadi has to ship to customers with at least 70% of the total shelf life remaining. The only viable solution was to properly forecast the next week’s requirements so that whatever is purchased in the current week is received and sold the next week.

In this environment, weekly forecasting is essential, but accumulating demand by product results in loosing product/customer information that is the key to purchase today what is to be sold next week. The business from key customers by product has a high impact on total weekly sales, so loosing that information was not acceptable.

The typical approach of weekly Stock Keeping Unit forecasting is not adequate for such short shelf life products. Within Planning Studio 100, the concept of CGFU (Customer Group Forecasting Unit) allows forecasting by customer group weekly, accumulating those forecasts to the top level. Página 1 de 2 Even the best forecast is going to be wrong and, as customers may order any quantity, stock allocation in relation to the sales order process is the key to achieving high levels of customer service.

Shipping to customers whatever has been ordered may result in full allocation for that customer, but may cause a stock out situation for other customers until the next supply arrives at the warehouse. With hundreds of sales order lines received per day, manual checking to allocate stock is not a viable option.

Using Planning Studio 100 optimization technology, open sales orders and daily forecasts by customer until the next resupply are considered in the stock allocation calculation to maximize the overall fill rate. The result of this analysis is that almost all of customer orders are picked and delivered on time, with any shortfalls being optimally allocated to ensure the best possible outcome.

Planning Studio 100 is currently used by companies across a wide range of industries such as retail, flooring, white goods, medical equipment, and automotive service parts.

Find out how to take Supply Chain Planning to the next level by visiting www.obi-corp.com or contacting Gareth Brentnall – [email protected].