Irn Bru maker boosts forecast accuracy with new demand planning system
AG Barr has installed a sophisticated new demand planning system in a bid to manage greater complexity in its business, boost service levels and keep stocks low.
The firm, which makes soft drinks under the Irn Bru, Tizer and Orangina brands, needed to have a more sophisticated forecasting system as its business became more complex, said Infor, which supplied the software.
Infor director of product marketing, supply chain management, Andrew Kinder, said: “Most manufacturers have very good service levels to customers, but many of them are only able to do this because they are holding so much safety stock. AG Barr wanted to improve its service levels but at the same time, reduce its inventory.”
He added: “The more accurate the forecast, the more stable your manufacturing plan, the more confidence you can have to reduce stocks without compromising customer service.”
Infor’s supply chain management (SCM) demand planning system, which is used by several leading food manufacturers, enables multiple users from demand planners and inventory managers to account managers, to contribute. This ensures that the final forecast is as accurate as possible, said Kinder. “The system also enables users to work collaboratively with suppliers and customers by sharing forecasting information upstream and downstream to help the whole supply chain run more efficiently.”
It also had modeling functions enabling planners to explore the impact of different events, said Kinder. “Take the weather. You could key in a 5°C increase in temperature and then see what this could mean in terms of materials and production planning.”
A recent study by technology research company Aberdeen Group had revealed considerable scope for improvement when it came to sales and operations planning in businesses, said Kinder. Best in class companies held significantly less stock, produced more accurate forecasts and had shorter cash to cash cycle times (better cash flow), he said.
