PROBLEM
The context of this case is found in a company that commercializes beauty products through catalogue, using housewives as their sales force. The company faced problems to generate accurate sales projections for each one of the countries where they had sales and this delayed growth and reduced UAFIR. The low accuracy caused:
- Shortages of certain products in the clients’ orders.
- Larger inventories of products that were not needed.
Additionally, the company had to deal with the high complexity of consumer demands (high variability and different causes for this), short delivery times and a growing SKU portfolio (15% annually in variety).
Faced with this situation, an initiative was launched to integrate a robust demand planning process that could deal with the environment previously
described.
HOW WE SOLVED THIS
- We generated an understanding of the demand by types of promotions and product families (behavior).
- We defined and automated statistical models to generate a prognosis of the demand.
- We defined the integral planning process that would lead the company and the different actors and necessary roles.
RESULTS
Quantitative
Reduction in the sales prognosis error from 35% to 13%, causing:
- Reduction in shortages.
- Better balancing of inventory levels (mixture)
- Reduction in raw material inventory.
Qualitative
- Understanding of the elements that affect the variability of the demand.
- Promoting aggressive growth in both geography and product portfolio.
- Unique, integral and disciplined Demand Planning process
- Increase in productivity and effectiveness of the responsible area caused by automation of the process (focus on analysis of results).
- Visibility and communication of promotion planning and new product launches
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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