Due to the increasing pressure on the planning performance of multinationals in the FMCG industry, companies such as Heineken see the need to seek improved cooperation with their largest customers.
The Heineken brand is sold in more than 170 countries. In addition, the company is active in more than 70 countries. The product portfolio also grows annually and through the digitization of the retail, consumers can buy their products in various ways. Moreover, in the last decades the fluctuating economy has increasingly put focus on cost reduction and end-to-end supply chain optimization. Fortunately, benefits can be gained despite all these complexities. The amount of data that has become available in recent years to organize a supply chain as efficiently as possible has increased. This data is then often described as ‘big data’. A buzz word, but the practical application is often difficult to find. Does this also apply to the daily point-of-sales data that Heineken receives from one of its largest retail customers? Is big data a big deal?
Heineken’s journey to CPFR excellence
For one of their largest customers, Heineken started in 2014 a cooperation in the supply chain area. The ‘trusted partnership’ with this customer led to the appointment of the first ‘supplier implant’. The ‘supplier implant’ is an employee of Heineken who is fully committed to a customer and who even works a few days a week at the customer’s office to strengthen the cooperation. In 2015 three additional ‘supplier implants’ started and the customer received data for the first time on a daily basis. A year later Heineken set up a process to standardize the daily data so that the most important KPIs could be monitored. However, this was not enough! To get more value from the data, EyeOn was called in because of our expertise in planning and forecasting. Based on interviews with the four ‘supplier implants’, we identified pain points in the current process. Examples of these points are:
- Low forecast accuracy resulting in high stocks or out-of-stocks
- Low service level to DC or store suffers to lower shelf availability
- Effectiveness and execution of promotions and new product introductions is insufficient.
These pain points were the input for a first version of an ‘insights dashboard’, which combines the customer’s data in an insightful way, making it easy to identify causes of problems. The ability to perform these analyzes at all possible aggregation levels (product, store, brand, type of beer, packaging type, package size) gives the supplier implant the opportunity to discuss these examples with the customer in a fact-based manner and then to set up actions to prevent such problems in the future. In addition, the insights dashboard also generates some predictive alerts to prevent potential issues in the supply chain.
The benefits of insights
Improved forecast accuracy
Improved shelf availability
Higher effectiveness of promotions and new product introductions
Reduced total inventory in the chain