When international companies merge, their unique internal processes also have to merge to create efficiency within the organization. Such was the case with the demand planning solutions and forecasting solutions used by two international brewing companies.

When the companies merged, each was using different approaches to forecasting. One was using a homegrown legacy forecasting tool and the other used SAP DP-APO as their standard forecast tool. Excel was used by both organizations.

The new, combined organization wanted to achieve better forecast accuracy by understanding the key business drivers of demand. This data would be used to enhance management routines and more effective supply chain planning. The goal was to allow the company to take proactive measures in their forecasting rather than reacting to changes in demand.

Global companies creating perishable products face the challenge of a highly complex supply chain, short lead times and demand volatility. The old practice of using safety stock to protect against variability is no longer relevant. Companies need to measure variability in demand across a product hierarchy of hundreds of thousands or millions of products and have the tools to accurately forecast the demand for each, across the entire enterprise.

Seasonality and trends used to be relied on by planners but now they’re only part of a vastly more sophisticated forecasting equation. A SAS demand driven planning and forecasting solution measures demand signals that are actually influencing consumer purchase, such as sales promotions, price, advertising, in-store merchandising, local demand, and economic factors. The solution allows planners to run what if scenarios to shape future demand and to be proactive in demand planning.

In the absence of a data driven solution, most demand forecasts are shaped by human judgement in Excel spreadsheets, which can introduce bias. The result of a biased report is an inaccurate forecast. An automated demand planning solution uses math, analytics, and historical knowledge to understand demand in real time and allow input from stakeholders to discover what may happen to that demand if certain variable factors are introduced.

The combined company now works on a single platform built on SAS demand planning solutions (formerly SAS Demand and Supply Planning), which allows input from many departments to shape demand and run what if scenarios. The solution increased accuracy at the lowest level (Distributor SKU) by more than 3X. The top line brand achieved accuracies on a one month out lag of upwards of 97% on a weighted basis. The demand planning and forecasting solution creates a weekly baseline forecast that feeds a single order tool for both companies. To increase forecast accuracy, Causal Forecasting Variables are added.

CT Global Solutions, a SAS Gold Partner, develops enterprise financial planning software solutions to help companies improve forecast accuracy and demand planning.

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