Nestlé adopts ‘Single Source of Forecast’ with SAS®
Implementation aids improved Marketing ROI
Reduces call on working capital for production
Nestlé – a global leader in nutrition, health and wellness products – uses SAS® Forecast Server for product demand planning across the company’s Oceania region, comprising Australia, New Zealand and the Pacific Islands.
Optimal demand planning is crucial for fast moving consumer goods companies such as Nestlé. They must ensure extreme accuracy of the orders they place on their suppliers of raw materials and packaging so that finished products are ready in the right volumes, at the right time. Any planning inaccuracies have a flow on effect that can potentially delay production and adversely impact marketing programs.
Tim Plummer, who is Nestlé Oceania’s Director of Supply Chain, said, “Since the implementation of SAS we have seen an improvement in demand plan accuracy, particularly in our overall forecast bias”. Nestlé has more than halved the level of bias that prevailed prior to using SAS, resulting in a reduced call on working capital.
He added that the company is now able to adopt a more holistic approach to its demand planning and operations. “If we run a promotion on one size of a particular product, we know that there is cannibalisation effect on our other sizes of that product. We can quantify that effect and draw insights to make changes in our demand plans, improving their accuracy as a result.”
Along with adopting the SAS solution, Nestlé revised the way in which its supply chain and sales and marketing divisions collaborate. Instead of different parties making different demand plans, they all now provide key inputs to generate a single plan. “We call this the ‘single source of forecast,’” said Plummer. “The process ensures planning is based on facts with inputs from everyone concerned, including those who don’t have statistical or IT skills.”
Significantly, senior management at Nestlé Australia were highly involved in the new project, recognising, that, “The positive return on investment that improved demand planning can have in such key areas as promotions planning and marketing spend”, as quoted by Tim Plummer.
Acknowledging that Nestlé has been a leader in its field for well over a century, David Bowie, managing director of SAS Australia and New Zealand, said, “We are delighted to have this major company as a global customer and obviously take satisfaction from the part our demand forecasting and planning solutions are able to contribute to Nestlé’s continuing success in the Oceania region.”
Nestlé is a global leader in nutrition, health and wellness products and has been providing consumers with a wide range of food and beverage products for more than 100 years. Nestlé in Australia is part of the company’s Oceania group which employs more than 6,000 people, operates 12 factories, five distribution centres and 20 offices across Australia, New Zealand and the Pacific Islands.
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