Integration of Supply Chain with Demand Planning-Tropicana's Journey

The key to success is not the most accurate forecast or world class manufacturing but how integrated is supply chain with demand planning ... describes how Tropicana is moving in that direction ... traditional financial forecasting is being replaced with SKU/DC level operational forecasting. Most organizations have either begun or will soon begin the odyssey that will move them toward Supply Chain Planning that is fully integrated with Demand Planning. Like others, Tropicana has begun to move down this path with some success, but many greater opportunities still lie ahead. Everyone always wants more. Consumers want convenience and better value; customers want new products and services; employees want bigger raises and benefits; shareholders want a better return. As businesses become firmly entrenched in the 211 century, the mantra of wanting more has turned into more! Perhaps a new way of defining Demand Management would be the art and science of managing a business successfully to meet all of these incredible demands! Who said life would be easier this century? FORECASTING IS JUST THE BEGINNING In the early 1990's, firms recognized the need to improve the accuracy of forecasting business information required to manage business successfully. This is especially important to Tropicana, as our primary products are perishable, with a relatively short shelf life. Due to aggressive growth, we were faced with significant warehousing, distribution and manufacturing constraints. In order to improve the accuracy of our planning processes, the logistics organization took over responsibility for short-term forecasting from finance. As Tropicana's operations environment grew complex - cost focused and constrained - the need for an increased level of sophistication became apparent. We needed a direct focus on individual SKU/DC level forecasting rather than the traditional financial or Equivalent Case forecasts. This meant crossing the boundaries from traditional demand planning emphasis to supply chain requirements. We were determined to develop new processes and identify and design new tools to support the sophisticated and demanding business environment. We recognized this back at corporate headquarters. But, we did not have access to all of the information necessary to develop accurate and detailed forecasts. So, a team concept was developed. We would lead and administer the process from corporate headquarters, but the actual forecast numbers for key accounts and key product groups would be provided by the regional or district sales offices. The idea made sense, everyone thought it was great but none of the individuals from the sales organization were knocking down our door saying that they had a lifelong dream to become a part-time sales forecaster. No one called or asked how they could help. So, as was so often the case in the early days, a reluctant volunteer was identified in each sales office to provide support. Of course, these new responsibilities were in addition to everything else they were doing. So, we had some very real concerns about the attention to detail that our forecasting process was going to receive. To address this issue, as well as to obtain support and understanding throughout the organization, we put several programs in place. We set up rewards and recognition programs for the team members. (These folks were primarily from the sales organization, and as such were very competitive. We tried to use this to our advantage.) We established and communicated detailed weekly performance metrics. We took every opportunity to speak to the sales organization to help them better understand the importance of forecasting to the bottom line. Once they began to understand the relationship between the accuracy of the forecast and operations' efficiency and the company's checkbook, the support and focus increased significantly. …