CASE STUDY: R&R ICE CREAM
R&R Ice Cream stays cool Frank Huckschlag explores the ice cream industry, and how R&R Ice Cream cope with the ever evolving market.
R&R Ice Cream, one of the largest producers and distributors of trade mark ice cream across Europe, has seen a continuous rise in the demand for ice cream since the mid-1990s and customer requirements for new flavours and marketing strategies have risen with it.
success. To maintain a strong market position, R&R and other ice-cream producers depend on an accurate sales planning process. This is particularly critical in a market which reacts instantly to seasonality, large product ranges, raw material prices, legal regulations and product trends.
H
Frank Huckschlag is the head of supply chain at R&R Ice Cream. He and his team take care of the sales and operations planning, purchasing and procurement to logistics and customer service.
The retail grocery trade provides a rich ice cream offer throughout the year, however, it is still very much a seasonal item, with the major turnover in hot summer months. However, as recent years have proven, good summer weather is not always guaranteed; a variable R&R Ice Cream must take into account. Yet even when the weather is fine, if temperatures rise above 25 degrees in the shade, many choose to cool off with drinks instead of ice cream. These unpredictable fluctuations are producers’ biggest challenge. To ensure consistent supply,
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owever, the continued popularity of ice-cream is not enough to guarantee
R&R Ice Cream uses phase-in plans to secure item availability; this means that some of the seasonal items are produced weeks, or even months before the acute sales phase. During the major sales period, daily sales forecasts for individual items enable sales and production plans to be adjusted if need be. Just as important is the phase-out planning at the end of the season to avoid large overstock. R&R Ice Cream produces 1,000 different items in Germany alone, and 30 per cent of these are distributed across other European countries. This inter-company trade presents a key challenge; customers in the UK, France and Poland favour different flavours and recipes, and these 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 commitment, despite the complex product and distribution structures, and the short product life cycles, is an ubiquitous dilemma in supply chain management”, explains Huckschlag.
Raw material prices are also crucial. If the government or a trading partner were to impose an embargo, or if there is highly speculative trading, these commodities can be seriously affected. It is therefore
imperative that the company’s purchasing teams be as close as possible to the markets through a network of worldwide trading partners in order to identify increasing raw material prices and use this knowledge to adjust purchasing processes.
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. Today, R&R Ice Cream can instantly identify and react to market developments through accurate daily forecasts. To do this, R&R Ice Cream has been using the forecasts provided by the software solution add*ONE Demand Planner from INFORM to stay on top of market trends. The add-on software provides his team with future target key figures which are based on historic data and empirical values. add*ONE then refines the information by means of current market data. The planning team receives up-to-date forecasts and so can adjust its production and purchase planning processes accordingly. R&R Ice Cream particularly benefits from the demand planning process, which is executed together with the sales department, and subsequently implemented in the production without any further adjustments.
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