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Achieving 98% Supply Plan Optimization and Enhanced Inventory Management
Chief Supply Chain OfficerIt is key to have a partner who helps you get through those challenging times, where you have run into some roadblocks that you do not always understand. Argano was there to ultimately help us, and obviously we are in a better place today as a result of that partnership and collaboration.
1
The Challenge
A leading U.S.-based company in the packaged food industry faced challenges related to its supply chain and inventory management. The company, which specializes in producing, canning, and distributing various food products, including soups, beans, broths, gravies, sauces, and kosher items, was experiencing rapid growth. However, this growth was hampered by the ineffective implementation of SAP Production Planning and Detailed Scheduling (PPDS) and SAP IBP Supply Planning Optimizer. To overcome these challenges required significant improvements in supply planning and inventory management processes.
The existing PPDS system failed to generate an optimized schedule for the company’s brite cans and was not configured to provide schedules for finished goods. Consequently, employees resorted to using spreadsheets for ad-hoc scheduling, resulting in manual, time-consuming tasks, inaccurate master data, and inadequate management of brite and label inventories. The absence of reports and alerts further exacerbated these issues, leading to decreased customer satisfaction.
To address these challenges and realize their vision of an end-to-end optimized digital supply chain, the company sought a partner’s assistance.
2
The Solution
The company partnered with Argano to implement both system and process improvements. Argano leveraged SAP Hybrid project management methodology (Active) and conducted process roadmap workshops and business process initiatives. These workshops helped stakeholders identify areas for improvement while ensuring alignment with the company’s business objectives.
The Argano team integrated SAP PPDS to optimize scheduling for brite cans, labels, and finished goods. Additionally, they implemented an integrated SAP IBP Supply Planning Optimizer solution to enhance planning and material flow. This initiative delivered several key outcomes:
- Continuous improvement in sales, planning, finance, and procurement processes.
- Establishment of a structured process and cadence for sales and operations planning (S&OP).
- Implementation of SAP Integrated Business Planning (IBP) – Financial module.
- Development of a training plan to empower the team to leverage and maximize the benefits of the implemented systems.
3
The Results
Through the integration and optimization of systems and processes, as well as the streamlining of data management workflows, the company achieved substantial improvements in operations planning. Notably, the company achieved an impressive 98% optimization rate for its supply plan related to finished goods using a heuristic-driven approach. This improvement translated to increased resource allocation efficiency and enhanced forecast accuracy.
By gaining a better understanding of demand patterns for finished goods, the company improved its ability to respond to market demands and meet customer expectations. This optimization allowed the company to maximize its previous technology investments and realize significant efficiency and productivity improvements. With integrated solutions connecting processes and data across the business, the company is now well-positioned to pursue its growth plans, setting the stage for success in the present and the future.