Feature Logistics Forward planning by forecast
North Yorkshire based R&R Ice Cream, one of the largest producers and distributors of trade mark ice cream across Europe, has been able to instantly react to market changes within its purchasing and production processes by using forecasts provided by the software solution add *ONE Demand Planner from Inform
R
&R Ice Cream supplies the European retail trade with more than 2,700 different ice cream products, generating an annual
turnover of €570 million. However, to maintain its success, R&R Ice Cream depends on an accurate sales planning process. This is critical in a market which reacts instantly to seasonality, large product ranges, raw material prices, legal regulations and trends.
Seasonal change
Ice cream is a seasonal item with the major turnover in hot summer months – which are typically April through to August. To ensure consistent supply, R&R Ice Cream uses phase-in plans to secure item availability; this means some of the seasonal items are pro- duced weeks, or even months before the acute sales phase. During the major sales period, daily sales forecasts for individual items enable sales and pro- duction plans to be adjusted if need be. Just as important is the phase-out planning at the end of the season. “The challenge is to avoid overstock of items which possibly wouldn’t be sold the following year,” explains Frank Huckschlag, head of supply chain at R&R Ice Cream. “But R&R Ice Cream must also take into account
unpredictable weather conditions, par- ticularly as only a dry and hot summer guarantees good sales for ice cream pro- ducers and distributors. “Unpredictable weather fluctuations during the summer is therefore the biggest challenge in our sales planning,” he says.
A balancing act
R&R Ice Cream produces 1,000 differ- ent items in Germany alone, and 30 per cent of these are distributed across other European countries and to other plants of the R&R Group. This inter- company trade presents a key chal- lenge; customers in the UK, France and Poland favour different flavours and recipes, and these differing requirements must be considered by the producing plant when purchasing raw materials – logistically this is a mammoth undertaking. “Managing the balancing act between optimal item availability and low capital commit- ment, despite the complex product and distribution structures, and the short product life cycles, is a ubiqui- tous dilemma in supply chain manage- ment,” explains Huckschlag. The raw material prices are crucial for R&R Ice Cream within the global competition. “If the government of an important trading partner suddenly
imposes an embargo, or if there is highly speculative trading, commodi- ties such as nuts, chocolate or sugar can be affected. Equally, bad harvests can affect fruits and cereal. This can have a great impact on the worldwide com- modity prices and influence the supply chain processes,” says Huckschlag.
Trademarks and trends
At the start of each season, there are invitations of trademark tenders to decide which ice cream producer is allowed to manufacture and distribute a certain product. “Flexibility and speed are critical here, in order to meet requirements as quickly as possible to win a contract,” says Huckschlag. In addition, much like the food industry in general, it is important for the ice cream market to stay on top of current trends. Having a true under- standing of the needs of the target group is imperative. This is where his- toric data and experience are vital in decision making and sales planning.
Inform Software T: 0203 1784722
www.inform-
software.com Enter 377
Logistics centre is the right fit for jeans retailer R
ussian apparel retailer Gloria Jeans has entrusted TGW Logistics with the implementation of its new logistics centre. The new CDC will replenish Gloria Jeans shops situated in Russia and the Ukraine. The vast majority of goods are received in cartons or totes, either from Gloria Jeans’ own production facilities or from external suppliers based in China. The cartons and totes are thoroughly checked and stored into the 240,000 triple-deep locations in the mini-load warehouse. This automated warehouse comprises 14 TGW Magito mini-load machines, each equipped with a Twister load handler for direct handling of cartons and totes. The additional mini-load system will be used for the storage of a further 40,000 totes serving eight goods-to-man picking stations for the picking of slow moving SKUs as well as non-sortable items. This mini-load system comprises eight TGW Mustang Evolution machines equipped with Combi Telescope load handlers. Orders for the shops are processed automatically, using a high-performance double-tilt-tray sorter, which sorts sales units directly into dispatch cartons. The cartons are automatically closed and labelled, and consequently palletised for dispatch. TGW Logistics
T: 01858 468 855 S8
tgw-group.com Enter 378
A solution to stay cool with Today, R&R Ice Cream can identify early market developments through accurate daily forecasts, enabling the company to instantly react to market changes within its purchasing and pro- duction processes. It has been using the forecasts provided by the software solution add*ONE Demand Planner from Inform to stay on top of market trends. The software creates forecasts on both current and future sales and develops simulation scenarios. The add-on software provides Huckschlag’s team with future target key figures based on historic data and empirical values. add*ONE refines the information by means of current market data. The planning team receives up-to- date forecasts and so can adjust its pro- duction and purchase planning processes accordingly. R&R Ice Cream is particularly benefiting from the demand planning process, which is executed together with the sales depart- ment, and implemented in the produc- tion without any further adjustments. This means the company can guarantee its demand planning process is inline with market needs and all customer requirements are considered. “Since we implemented add*ONE, the accuracy of our forecasting has increased by 20 per cent. Figures cal- culated within the last 24 hours are one click away, enabling significant stock optimisation,” concludes Huckschlag.
MARCH/APRIL 2013 Materials Handling & Logistics
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