Reinventing the Wheel
Today, C&S Wholesale Grocers, a $19 billion organization, supplies more than 20 retail chains as well as independent groups throughout the United States, and operates more than 60 distribution centers across that network that house both dry and fresh grocery retail commodities.
In the past 18 months, C&S embarked on an initiative to drive down inventory while improving order fill rates to customers and improving the productivity rates of the organization.
A particular challenge of this change initiative was managing the promotional demands of its retailers. It is estimated that 40 percent to 50 percent of C&S' volume is related to promotions and more than 20 percent of its items are involved in promotions at any given time.
"All of these promotions were forecasted manually," says Eric Winn, director of Demand Planning, ES3 Supply Chain and Procurement Analytics, C&S. "Forecasters literally scrolled through thousands of Excel lines each week and typed in forecasts to plan for these promotions."
Additionally, exception-based techniques were not built into the process, nor was prioritization. So, an item responsible for 50,000 units of volume was given no more consideration than an item comprising 10 unites of volume. Furthermore, C&S lacked useful management tools to understand forecast effectiveness and error rates.
"Data management -- and quality -- was at the crux of the issue, with all other concerns stemming from it like spokes from a faulty hub. We needed to, indeed, reinvent this wheel," says Winn.
In the first half of 2007, C&S implemented Oracle Demantra Predictive Trade Planning in order to model promotions and optimize supply and demand.
Today, all of C&S' non-perishable areas -- including "dry" perishables -- utilize baseline forecasting to generate volume forecasts.
"We are now forecasting more than 500,000 SKUs on across 20-plus customers and 60-plus distribution centers," explains Winn.
C&S is also in the process of applying, but not yet using, the tool's promotional forecasting capabilities.
Thus far, C&S has met or exceeded all of its implementation goals and enjoyed an extremely successful holiday season, the two weeks before Thanksgiving. Even with less employees coordinating point-of-sale, shipment, promotion and display data, C&S experienced a sizeable reduction in inventory and achieved improved service levels.
What's more, the overall change effort mentioned earlier -- which includes projects other than the Oracle Demantra implementation -- has resulted in better fill rates to customers combined with extraordinary inventory performance. These results have contributed to significant savings when compared to the previous year.
More success is expected as C&S is actively engaged in exploring next steps of the implementation.
According to Winn, "We have enormous goals for the continued implementation of [Oracle Demantra], contributing to various components of the value chain." CG