A Major Electronic Cigarettes Manufacturer

300 different products, sold through
regular channels
Revenue: Around USD 2 Billion
PROBLEM
  • This customer needed to move away from spreadsheets since poor data integrity led to inaccurate plans which caused increased costs and decreased customer service levels.
  • Being dependent on Contract Manufacturing with long lead times, lack of internal and external alignment of plans increased inventory costs and supply chain capacity bottlenecks. Inaccurate plans forced the company to make constant inventory allocation trade-offs that ate into margins.
SOLUTION
  • The solution streamlined the Demand Forecast with statistical forecast as base line, brought in Product Lifecycle and Market rollout planning.
  • Regional forecasts were sent to Production Planning for considering inventory and distribution constraints early in the process. Sourcing teams could review Components and Material Cost plans at different locations for contract manufacturers to drive down costs.
RESULTS
  • Established formal Consensus Demand review as part of Integrated Business Planning (IBP)
  • Enabled supply planners to optimize inventory, view network capacity constraints, and identify out of stock situations in advance.
  • Robust scenario planning allowed procurement to make trade-offs for item and supplier substitutions while costing out total material spend.