Ty.Phoo Tea Takes Fast Track to Forecasting Accuracy
In November 2005, the Apeejay Surrendra group purchased the Ty.phoo Tea name and its various brands from Premier Foods. The company -- now known as Ty.phoo Tea Limited -- combines Ty.phoo Tea's brand heritage with the more than 100 years of tea growing experience of Apeejay Surrendra. Today, Ty.phoo Tea is an 80 million euro producer of tea exporting to 39 countries across the world.A Complex Market
Ty.phoo Tea relies heavily on accurate forecasting to help maintain a synchronized supply chain and drive its bottom line profitability. This is crucial as its 11 different brands comprise of more than 400 SKUs that are supplied to all customers -- from the largest grocery chains down to the small independents. Improving demand forecasting without a drop in service levels because of a change of ownership was critical for Ty.phoo Tea.
The continued expansion into new markets adds complexity to its supply chain, putting extra pressure on getting forecasting performance right.
The commodity aspect of tea buying is easily affected by fluctuating prices and seasonality. Having a good understanding of demand patterns and pushing this information upstream to suppliers is critical to supply chain efficiency and therefore to supply chain profitability. Constraints such as lead times put on by suppliers have knock-on effects. For instance, inflated stock holdings require not only demand visibility but also the ability to shape it.
Ty.phoo Tea's challenge was based on two requirements:
1. Implement a demand planning system within three weeks
2. Substantially improve demand forecasting accuracy
The urgency behind the need for fast implementation was based on the fact that, starting in April 2007, the company would be unable to continue using the Premier Foods demand planning system. In addition, the system not only needed to be up and running in record time, but it also had to easily integrate with Microsoft Dynamics NAV ERP system.
New & Improved in Weeks
Ty.Phoo Tea relied on TXTDEMAND from TXT e-solutions based on its functionality and the ability to deliver the project within three weeks.
"The speed of delivery meant we started seeing the benefits a lot faster than anticipated. In particular, the overall increase in forecast accuracy has had a very positive effect on our supply chain efficiency," says Geoff Hickman, IT manager, Ty.phoo Tea.
The solution targeted the rapid improvement of Ty.phoo Tea's demand forecasting capabilities through the ability to harness statistical data and empower users to create consensus decision forecasts. More specifically, the demand forecasting component enabled the comprehension, quantification and time planning of demand through analysis of historical data and advanced forecasting techniques. The demand definition process allows for forecasting over various time frames. Data can be gathered by markets, distribution channels, products and product families. The application supports a rolling forecast process through analysis of forecasts and results.
The improvement of Ty.phoo Tea's forecasting capabilities means that it now has a more timely and accurate picture of future demand. Ty.phoo Tea also benefits from shorter forecast cycle times, which will ultimately help reduce unnecessary over-stocks while helping increase service levels due to greater agility to meet demand.