Demand Management

Food Service Packaging Manufacturer

Client

A multi-billion dollar packaging manufacturer and distributor.

Situation

Company's goal is to be the one-stop source for food packaging products in a highly competitive, cost-critical market, which requires the alignment of 39 manufacturing and 8 distribution facilities across the United States, Mexico and Canada. The immediate challenge in one business segment is to reduce inventory levels and improve forecast accuracy.

Solution

Starting the journey toward a lean value chain, a thorough analysis of demand patterns accelerates adoption of a demand-based replenishment system. Statistical forecasts incorporate promotion and point-of-sale data. SKU rationalization eliminates some slow-moving, highly volatile products.

Result

• Pull system reduces inventory levels by $1 million for a single product line while simultaneously improving case-fill rates from 97.7% to 98.5%.
• Shipping orders direct from the factory further reduces inventory, related carrying costs and transportation costs.
• Standardized process improves forecast accuracy from around 55% to upwards of 75%.