From the source to the store: optimizing the full CPG supply chain

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Anaplan

The platform for orchestrating performance.

Learn seven secrets for better demand forecasting and supply planning from consumer packaged goods (CPG) industry leaders.

How can companies plan in a volatile market? As Caroline Rhoad, director of integrated logistics planning at The Coca-Cola Company, says: “Last year has become a really terrible way to predict next year!”

Focusing on innovation is essential for CPGs to thrive in a changing landscape. Coca-Cola is one of many companies driving improved forecasting by connecting planning along the supply chain.

We spoke with CPG industry experts from Coca-Cola, along with Costa Coffee, Moët Hennessy, and The Duckhorn Portfolio, to share their top tips for building supply chain resilience, enhancing forecast accuracy, and driving growth in an uncertain market.

1. Combine insights from different sources

“Historical shipments really don't mean anything when you go through something like COVID and probably meant less than we thought they did even before COVID,” says Renee Tiller, senior modeling manager at Coca-Cola.

Economic uncertainty has exposed weaknesses in legacy demand forecasting, prompting Coca-Cola to rethink its approach, informing decisions based on combined data and insights from key sources, such as:

  • Company hierarchies
  • Insights from Nielsen around share and price increases
  • Internal trade promotion data
  • A machine learning forecast that is automatically fed back into statistical forecasting models and analyzed for best fit.

2. Use machine learning to free up your planners

Coca-Cola’s forecasting model above runs 100 integrations in a weekend, ready for planners to start work on Monday — no “Sunday working” required.

“The planners can spend their time being focused on the products and the intersections that are more difficult to forecast and do need to be reviewed,” says Tiller.

3. Collaborate behind the scenes

Over the past five years, Coca-Cola has built a suite of advanced forecasting models. The speed to user adoption has been “incredible,” which Rhoad attributes to involving users in their design.

“We have key stakeholders from finance as well as transportation, procurement, and our integrated business planning team,” Rhoad says. “And because our users were deeply embedded in the design — in both the testing and in the rollout — we've had almost no change management work to do.”

4. Start small but think big!

Coca-Cola began its transformation journey with an innovation forecasting model, which brought together all 68 bottlers and supply chain teams. It was so successful that the company spun out several further statistical forecasting models.

It now has 16, including an advanced transportation planning model, taking integrated supply and demand plans in Anaplan and combining them with actuals from prior year transportation transactions.

Early figures suggest this has enabled Coca-Cola to attain 70% accuracy in forecasting against an industry standard of 50%, enabling:

  • Released working capital to reinvest elsewhere
  • Right sized transportation procurement plan, a win also for their suppliers

5. Think global

Costa Coffee is expanding worldwide in double-quick time. They knew scaling effectively would require aligned visibility and planning, including:

  • Bringing together several internal systems across geographic branches
  •  A single, web-based connected planning system to roll out across all branches

The company began with a pilot Anaplan model for its Proud to Serve brand, which was “probably the smoothest pilot that I've ever been part of,” says Sarah Randall, Costa Coffee’s head of global planning and S&OP.

“It gives us the flexibility for where Costa is at the moment, but also we believe it can support our journey into the future,” says Randall.

6. Make it easy to use

Luxury wine and spirits company Moët Hennessy is also undergoing a huge transformation, expanding into new territories as well as developing a direct-to-consumer model.

Moët Hennessy is implementing a new platform for:

  • Real-time collaboration, with users from different domains such as finance, commerce, and supply chain
  •  Highly complex calculations, such as currency simulations
  • Long-term planning (for its top-end cognacs, this is 60 years).

And it’s crucial that its platform is “simple enough for a five-year-old” to use.

“It is agile and evolutive enough meaning that when we want to change some settings, it was about five days to five minutes,” says Anne Charlotte Vidal, head of Anaplan center of expertise at LVMH. “For us to adjust some business routes, it's a question of days and not a question of weeks.”

7. Choose the “Cadillac of planning tools”

The Duckhorn Portfolio has also adapted its approach to planning as part of business growth, expanding its wine brands from four to 10 in a decade, and now sells across the US and in over 50 countries. It needs a versatile planning tool to help it manage crop estimation, which can vary wildly from year to year.

“Before Anaplan, my team had to manage all these spreadsheets manually, pulling all the data together to create the reports,” says Mary Basore, Duckhorn’s director of supply planning, grapes and bulk wine. “We've taken that processing time down from probably a week of data collection to meaningful data, to literally a click of one button.”

When the company underwent a successful stock launch, it needed a robust central system for financial reporting.

“People call it the Cadillac of planning tools and we really feel it is,” says Erik Schau, senior business analyst at Duckhorn. “We can give our investors and shareholders the information they need quickly and effectively. It’s like magic that happens behind the scenes.”

Learn more about these CPG industry leaders’ Connected Planning journeys by watching their full, on-demand Anaplan Connect sessions: 

 

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