The world of Fast-Moving Consumer Goods is fast-paced and competitive, so managing demand variability and gaining visibility into supply chain operations is essential for success. With rapidly changing consumer preferences, products with short shelf lives, and fluctuating market demands, FMCG companies face the challenge of ensuring their production and distribution processes are efficient as possible whilst not compromising on customer satisfaction.
In this blog post, we explore how Opcenter APS (Advanced Planning and Scheduling) can help FMCG businesses effectively manage demand variability and gain valuable visibility across their supply chains.
Understanding demand variability in the FMCG industry
The FMCG industry is characterised by high demand volatility – but what does that actually mean? In simple terms, it means it’s challenging for companies to accurately forecast and plan their production schedules.
Factors such as season, promotional activities, and sudden or cultural shifts in consumer preferences can significantly impact demand. Due to this, it’s essential that FMCG manufacturers invest in strong planning tools (like Opcenter APS) that can adapt to demand changes and help them plan ahead accordingly. Failing to do so can lead to costly issues like disposing of expired products, leading to a loss of profits.
Managing demand variability with Opcenter APS
Opcenter APS is a planning and scheduling tool which can help to address the unique and complex challenges that FMCG companies face. By using advanced algorithms and real-time data, Opcenter APS enables businesses to manage their production plans, improve delivery performance, and reduce inventory costs. Key features of Opcenter APS that make it a valuable tool for managing demand variability include:
Accurate demand forecasting
Opcenter APS includes a “Make to Stock’ variation based on forecast and seasonality variances. This allows FMCG companies to proactively plan their production schedules, ensuring they meet customer demand while reducing excess inventory.
Production planning
The “Make to Order” feature gives planners the ability to evaluate the effects of future demand changes in the manufacturing process. FMCG manufacturers can then create flexible production plans that can quickly adapt to changing demand patterns. It enables real-time updates to production schedules, taking into account factors such as order priorities, resource availability, and production constraints.
Inventory planning
Excess inventory is a problem for any FMCG company. Not only will it expire and have been a wasted investment, but you also then have to factor in additional costs like paying to dispose of it properly. On the other hand, not enough stock results in a loss of sales and dissatisfied customers.
Opcenter APS uses high level algorithms to strike the right balance between inventory levels and customer service levels. By setting optimal safety stock levels and adjusting replenishment parameters, FMCG companies can minimise inventory costs/problems while ensuring they provide enough stock for their customers.
Gaining visibility with Opcenter APS
Visibility across the supply chain is crucial for FMCG companies to make informed decisions, identify bottlenecks, and improve overall efficiency. Opcenter APS provides valuable visibility by integrating with various data sources, such as ERP systems, production data, and supplier information. Key features include:
Real-time data integration
Opcenter APS collects real-time data from multiple sources, enabling businesses to have an up-to-date view of their supply chain operations. This visibility allows manufacturers to identify potential disruptions, monitor production progress, and make adjustments to meet demand.
Performance monitoring
Take advantage of performance dashboards that offer insights into key performance indicators (KPIs) such as on-time delivery, production efficiency, and inventory turnover. By monitoring these KPIs, FMCG companies can identify areas for improvement, ensuring that your business stays one step ahead.
Collaboration and communication
By providing a centralised platform for sharing information, FMCG companies can improve the coordination between their different teams, leading to better overall visibility.
Case Study: Hitchen Foods
Hitchen Foods were managing their planning and scheduling from outdated and time-consuming Excel spreadsheets which meant that there was very little communication between departments. This in turn would lead to each department prioritising its own work before considering the needs of the other areas. So, the main problem was a lack of overall production visibility.
With our help, Hitchen Foods was able to implement a new system, so that the planning office now takes the orders and make decisions as to what the production plan should be for that week, giving focus to one point. Key benefits include:
- Much better visibility with regards to planning issues.
- Improved communication between departments
- Greater overall visibility and knowledge in terms of their everyday shop floor processes.
Want to find out more about how Opcenter APS can help your FMCG business? Contact us today. With our decades of experience and deep understanding of the industry, we are well-equipped to provide you with the tailored solutions you need to get the most from your processes.
