SCM solution makes a world of difference for AB
AB World Foods, a division of Associated British Foods, has completed the first phase deployment of a new supply chain management system designed to help it predict and shape customer demand with greater accuracy.
As part of an integrated business planning strategy, the company plans to use Infor SCM solutions to define the demand, inventory and replenishment requirements of its global operations, including products manufactured by AB World Foods as well as stock manufactured by third parties.
Prior to the implementation of Infor SCM, divisions of AB World Foods such as G Costa used spreadsheets based on retrospective sales performance over the previous two months. This process provided a flat forecast of demand and did not take into consideration the different demand patterns for various types of products. Consequently, AB World Foods suffered expensive overstocking of some brands and inadequate supplies of others.
AB World Foods chose Infor SCM following an extensive review of the market.
“We are building our supply chain around Infor. Having already consolidated our enterprise applications onto Infor ERP BPCS, this new demand forecast will help manage a lot of our business, explains Gary Brookes, head of supply chain, AB World Foods. “Given that around 75% of our costs are supply chain related, that is a huge responsibility.
“Throughout the phased implementation, we have seen some profound benefits. In the case of inventory planning we have already increased our service levels from 91% to 96%. Recently we have surpassed our target of 98.5%. In addition, we have reduced our stockholding of finished goods by approximately 20% – a financial saving of over £2m.
“The sales and marketing teams used to be somewhat out of step with the supply chain department. By integrating demand planning with our stock plans we have significantly improved sales and risk reporting. This has served to bring the two teams together and improve communications between the disciplines.
Looking forward, AB World Foods plans to use Infor SCM to improve supplier relationship management and develop strategic demand forecasts for the next 12 and 24 months.