Leading CPG company boosts production through efficient planning
When rising backorders threatened to diminish recently won shelf space, this leading personal care brand manufacturer saw the need to improve demand forecasting and production planning processes to reduce stock shortages, restore customer service levels and maintain growth.
The company worked with NTT DATA’s supply chain experts to determine the actual root causes of the crisis. Within one month, the teams identified the underlying issues and put a plan in place.
Necesidad empresarial
A rapidly expanding consumer goods company recently found itself struggling to meet customer fill rates and found itself in an enterprise-wide crisis that threatened the company’s continued success if service levels did not recover quickly.
The company initially sought the counsel of a lean manufacturing consultancy. The consultancy incorrectly diagnosed the underlying causes by focusing solely on manufacturing efficiency and never addressed demand forecasting, production planning, MRP, S&OP, warehousing and order fulfillment. As inventory levels dropped dramatically, the organization enlisted the help of NTT DATA to right the ship before the situation resulted in a catastrophic setback to growth.
Resultados
- Optimizes inventory levels and improves product flow within the facility
- Restores service levels and prevents the loss of national accounts
- Implements a smooth 3PL transition plan and reduces operational deficiencies
The partnership successfully raised service level fulfillment percentages from 70% to the mid-90s, all while overcoming additional challenges including labor shortages, weather shutdowns and vendor delays.
Solución
Making a plan
First, the team developed a realistic recovery and communication plan to return inventory levels and fill rates to desired levels. Next, the team worked hand-in-hand with the brand’s procurement and production teams to ensure the expedited availability of prioritized materials for critical customers. Finally, through a rapid-fire action plan, the team restored service levels, preventing the loss of several national accounts.
The right MRP tool
Within two more months, the team had implemented an MRP tool to drive procurement, further optimizing inventory levels. Using a variety of software solutions to build models for production, forecasting and inventory optimization, the team successfully aligned raw material procurement with manufacturing operations and met forecast demand with the most efficient inventory, despite ongoing volatility and new product launches.
In parallel, NTT DATA’s supply chain operations experts provided optimized recommendations to improve product flow within the facility. As a result, the team successfully solved warehouse congestion, expedited order fulfillment, implemented a smooth 3PL transition plan and reduced daily operational deficiencies hindering the organization’s progress.
In addition, through a collaborative effort with the company’s supply chain leadership team, the partnership successfully raised service level fulfillment percentages from 70% to the mid-90s, all while overcoming additional challenges including labor shortages, weather shutdowns, vendor delays and more. The project proved so successful that NTT DATA continues to work closely with the manufacturer to ensure the organization’s continued growth.
About this case study
A leading personal care brand manufacturer improves production planning and reduces backorders with demand forecasting.