Products and Services: Grupo Nacional de Chocolates S.A., is a Colombian company that specializes in investing in food (meats, Cookies, Chocolates, Coffee Ice Cream, Pastas), and is the biggest company in this field in the country, and has a remarkable position in Latin America.Web site: www.grupochocolates.com
Implementation Partner: Sintec
MAIN CHALLENGES:
- Guarantee growth and coverage in the target regions.
- Make supply chain flexible in order to guarantee availability and competitive material costs.
- Integrating advanced planning (APO) with (ERP) execution.
- Offer exclusive and accurate information as needed to make decisions in a short period of time.
- Generate optimized plans in a short period of time.
- Increase collaboration and commitment from the commercial area towards the sale forecast.
- Support the Sales and Operation Process (S&OP).
IMPLEMENTATION BEST PRACTICES
- Guaranteeing strategic initiatives by integrating the best practices in processes, organization and technology.
- Designing a unique process platform based on the industry’s best practices.
- Developing an internal consulting team that would generate experience on best practices and configure the tool.
- Assigning the people with the most experience in each one of the advanced planning processes.
- Creating a competence center that would lead the initial implementation as well as the roll-outs of the rest of the businesses.
WHY SAP
- Because not only did it have a reliable solution for execution (ERP) processes, but also does it have the modules that enable business strategic processes such as Supply Chain Management, Business Intelligence, etc.
- Because it had a sole comprehensive platform that enables all solutions and guarantees reliability and availability of data.
STRATEGIC BENEFITS
- Integration of all areas in order to work with a single economical and operational objective under a process, technology and organization alignment.
- Process standardization and discipline.
- Generating a single reliable source of data to make decisions.
OPERATIONAL BENEFITS
For the meat industry, where objective measurements have been made on the benefits, implementing SAP framed within a set of global improvements in the supply chain processes has contributed to the following:
- An increase on the service level: 4 percentage points.
- Prognosis error reduction: 50%.
- A decrease of the planning cycle time: 30%.
BACKGROUND
In the year 2005 GNCH’s businesses were able to identify that both the national and the international surroundings of the mass consumption industry was becoming increasingly complex and competitive both in the national and in the international field, in the internal and the external approach elements were identified that called for a different way of doing things:
- Globalization, that facilitates for the players to rapidly consolidate in geographies and categories.
- Changes in consumption habits, which generate purchasing deciders based on new criteria and consumption opportunities for each cannel.
- B-Brands, informal regional competitors that affect the price perception and deteriorate the value of the brand.
- Modern channel growth and the growth in its ability to negotiate.
This change of the industry triggered the need to generate a strategic and economical edge to which five strategic initiatives were defined towards the year 2015. We were looking to generate a competitive edge in the Supply and Distribution Chain that would take the business to plan, optimize and execute in order to service a multi – segmented customer platform on an international level.
A COMPREHENSIVE TRANSFORMATION EFFORT
By mid 2005 all GNCH’s businesses decided to take on the transformation effort of its Supply Chain by defining a single model for strategic, tactical and operational processes that would guarantee the appropriate standardization and integration of all organizational capabilities, processes, and indicators.
Once having defined the processes the search for a technological platform started. We were looking for a technological platform that offered the standardization, integration and best practices embedded for each one of the areas of the business as part of its solution. That is how SAP was chosen as the supplier of technology solutions for all business processes (transactional, Logistics and Advanced Planning, Business Intelligence, Sales, etc.) and Sintec as the partner for the implementation of the modules of the Supply Chain.
The APO modules as implemented for the Supply Chain enable the processes related to demand and supply planning (Demand Planning)
and (Supply Network Planning).
In order to implement the SAP solutions we decided to define “Waves”. On these “waves” we planned to sequentially integrate all group’s businesses
seeking that all functionalities as found in each one of the modules followed a single best practice standard as homologated by the entire group.
A Competence Center was generated in order to give support to the implementation process. This center would be responsible for each
one of the Waves, besides a team made up of experts in each business process and who were assigned to the project full time. This approach helped the business to generate internal knowledge on the implementation (methodologies and best practices in processes) as well as to integrate the each business’ specific features into the model.
AN OPTIMIZED PLANNING MODEL
The advanced planning model as implemented included all tactical and operational planning processes:
- Demand Planning included debugging the information and segmenting the sku’s based on sales and variability indicators in order to define statistic segments per segment that would guarantee the correct demand modeling. Besides improving the statistical forecast a cooperation process was defined for the commercial and marketing area that would guarantee including market intelligence in it.
- Supply Network Planning takes the collaborated demand plan, the inventory policies for the period and generates a plan for the distribution, production and supply of Raw Materials which has been optimized based on the finite ability of the entire Supply Chain. The optimized supply plan maximizes the Level of Service and minimizes distribution costs in compliance with the inventory policies and defined capabilities.
- One of the main pillars of the transformation was organizational alignment and training that was generated as a result of the needs of the new IT processes and tools.
CHAIN FLEXIBILITY AND RELIABILITY
New capabilities such as flexibility and reliability were generated as a result of the implementation. These capabilities yielded some economical
benefits.
The appropriate analysis of the data and choosing the statistical models as well as the cooperation received from the sales and marketing area
contributed to a 50% reduction of the prognosis error (from 30% to 14%) in the meat business. Supported by a more reliable sales forecast, as well as a supply plan that guarantees product availability all throughout the distribution network, the meat business was able to get an increase in the Service Level equivalent to 1,5 Percentage Points.
All advanced planning processes were integrated under one same practice thus guaranteeing the participation and cooperation of the sales,
marketing, logistics and production areas. This integration allowed us to reduce the time of the planning cycle in 30% (from 20 to 14 days), for the
meat business.
Grupo Nacional de Chocolates’ businesses operate their advanced planning processes nowadays with the help of a single data base which is reliable
and flexible and which guarantees the visibility needed for the integration and cooperation of the areas in order for them to work with one common objective: profitability sustained growth.
WHAT IS NEXT?
All GNCH’s businesses continue to work in achieving the next maturity level of the supply chain, focused on operational excellence and cost reduction.
GNCH will specifically work with Sintec to implement the following:
- Detailed scheduling and optimization of the production (Production Planning & Detailed Scheduling). A solution that allows for the automation and optimization of the production scheduling process by maximizing demand compliance.
- Boards to generate analyze and select support scenarios to the Sales & Operations Planning processes based on Business Objects.
- Supply Chain Performance Management which enables and generate tactical and economical indicators of the Supply Chain.
The customers’ thoughts:
“Advanced planning is a key competence of the Supply Chain in all Grupo Nacional de Chocolates’ businesses. With SAP’s tools and Sintec’s accompanying and experience we have been able to develop it thus achieving a better service level as given to the market and optimizing all cost levels as well as the work capital within the chain.”
Carlos Puerta, Logistics Manager for the Meat Business, Grupo
Nacional de Chocolates.
About Sintec
Sintec is the leading consulting firm focused on generating profitable growth and developing competitive advantages through the design and execution of holistic and innovative Customer and Operations Strategies. Sintec provides a thorough and unique methodology for the development of organizational competencies, based on three key elements: Organization, Processes and IT. Furthermore, Sintec has successfully carried out more than 300 projects on Commercial Strategies, Operations and IT issues with more than 100 companies in 14 countries throughout Latin America. Our track record of more than 25 years makes Sintec the most experienced consulting firm in this area of expertise in the region.
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