Forecasting toys thrown out of the inventory pram

By Sue Scott

- Last updated on GMT

Related tags: Supply chain management, Enterprise resource planning

Organix says sales of its all-ambient product lines have nearly doubled
Organix says sales of its all-ambient product lines have nearly doubled
A market-busting 10% rise in demand for Organix baby food products has forced the company to tear up the spreadsheets and become the first manufacturer to adopt a new stock-monitoring and forecasting system that could lead to full vendor-managed inventory with UK retailers.

The Dorset-based company said a near doubling of its organic all-ambient product lines over the last four years had driven the extra business.

Organix makes a particular virtue of its ‘No junk promise’, which guarantees its food is made with "nothing but the best-quality organic ingredients with nothing unnecessary added and nothing important taken away"​.

Organix’ rapid growth

Its rapid growth spurt comes as Euromonitor forecasts the global baby food sector will continue to toddle along at a recession-proofed 6% as fresh faces – principally China – find their feet in the market.

But expansion had led to tantrums over inventory at Organix and it finally threw its forecasting toys out of the pram in March, said supply chain controller Hazel Lees.

"We struggled with forecasting accuracy and we were shorting retailers, even though we had stock in the warehouse. We had six weeks’ cover, which we were assuming was good, but only three weeks of it met their individual specification."

Goods-in was also becoming increasingly difficult to discipline as the company tried to balance organic ingredients from 15 suppliers with 130 stock keeping units, for which there was as much as a 20% disparity in shelf-life demands among retailers.

"They were using a bunch of spread sheets and the system was just too prone to error,"​ said solution supplier Infor’s Pieter Leijten, which recently launched 11 suites of Infor10 enterprise resource planning software suited to specific sectors, including food and beverages. More "micro vertical"​ packages for specialised industries within fast-moving consumer goods could follow.

"It picks up trends as well as seasonal promotions and, even if you dip into new markets and get a sudden step change, it's unique in that it sees these things separately,"​ said Leijten.

Cutting inventory by 10–15%

Organix said it was now on its way to cutting inventory by 10–15%. "It [the new system] has freed us from a lot of the drudgery to do things such as collaborative forecasting,"​ added Lees.

"Down the line it gives us the potential for vendor-managed inventory, giving retailers access, which enables them to see their forecasts and trends.

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