Riikka Kaipia

Collaborative planning forecasting and replenishment: new solutions needed for mass collaboration

The challenge faced by supplier companies in the grocery supply chain for implementing collaborative planning, forecasting and replenishment (CPFR) is how to get the retailer to forecast, especially when it has not been necessary before. In this paper a solution that would allow collaboration on a wide scale is presented. The forecasting approach is called ``rank and share’’ and uses input from the retailer’s existing planning process ± the category management process. The benefit of using category management as the basis is that the retailer can scale up collaboration with a large number of suppliers without increasing planning resources. For the supplier the benefit is point of sales forecasts at the time of the assortment decision. To support this collaborative forecasting process there is a need for more robust replenishment solutions, new measures to illustrate benefits, and for a distributed planning architecture and software. Potential solutions for these are also discussed in the paper.

VMI: What are you losing if you let your customer place orders?

Managing the order-delivery processes between organizations is a key issue in supply chain management. Despite the increasing application of just-in-time (JIT), lean and agile practices and new information systems that increase the visibility in supply chains, a lot of problems still remain. Surveys among European companies indicate that no signifi cant improvements have taken place in delivery performance during last decade. Vendor managed inventory (VMI) is a recent alternative for the order-delivery process. The fundamental change is that the ordering phase of the process is abolished, and the supplier is given both authority and responsibility to take care of the entire replenishment process. Despite of its advantages VMI has not yet become a standard mode of operation in companies. In this paper the benefits of VMI are analyzed from the viewpoint of managing the replenishment process of the entire product range, not the viewpoint of a single stock keeping unit. A time-based analysis method is developed for measuring the benefits of VMI in different situations. The hypothesis explored that by taking the whole product range viewpoint the advantages of VMI are more readily identified. The hypothesis is tested by using real-life demand data from three different grocery supply chains.

Information‐sharing in supply chains: five proposals on how to proceed

Purpose – This paper aims to focus on supply chain visibility in practice and to suggest ways to improve the supply chain performance through information sharing.Design/methodology/approach – A case study exploring the current state of visibility in the demand‐supply network of an original equipment manufacturing company was carried out. The goal was to understand how a manufacturing company and its suppliers can benefit from incremental demand information sources. Data were collected through interviews and data analyses and focused on an end‐to‐end view of demand information. The most relevant information uses were tested in pilot projects. A literature review on demand information sources and benefits of visibility was conducted.Findings – On the basis of the case results and a literature survey, five proposals on how to improve visibility are presented. They suggest that only information that improves supply chain performance should be shared, demand‐supply planning processes be stabilized and synchron...

Creating sustainable fresh food supply chains through waste reduction

Purpose – The aim of this empirical paper is to study information sharing in fresh food supply chains, with a specific goal of reducing waste and facilitating sustainable performance. The study focuses on material and information flow issues, specifically on sharing demand and shelf‐life data.Design/methodology/approach – This work has been designed as an exploratory case study in three fresh food supply chains, milk, fresh fish, and fresh poultry, in the Nordic countries. The cases are based on interviews and data from the databases of the companies involved. Each case focuses on analyzing information flow, particularly the current order patterns and forecasting and planning process, and material flow, focusing on the supply chain structure. In two cases significant changes have been made to forecasting processes and material flow, while the third case intends to identify the most beneficial uses of shared information to create a sustainable fresh food supply chain.Findings – The performance of the peris...

Planning nervousness in a demand supply network: an empirical study

Purpose – Planning processes along a demand supply network in an environment characterized by rapid market fluctuations and product changes are studied. The relationship between demand planning and the bullwhip effect is investigated by comparing planning accuracy in different demand supply network echelons and locating where there is most nervousness.Design/methodology/approach – The current demand supply planning process flow was described based on interviews with key decision‐makers throughout the demand‐supply network from retailers to second tier suppliers. A data analysis of the quality of plans for demand and supply was generated in each decision‐making point by collecting planning and actual data of two products.Findings – The results show that planning accuracy varies between the parties in the supply chain. The connection between planning nervousness and the bullwhip was investigated in detail through a vendor‐managed inventory (VMI) model in the chain. Planning nervousness causes bullwhip, as t...

Vendor managed category management - an outsourcing solution in retailing

Abstract Outsourcing is expanding from parts and components to include services and process management. The question is no more just who designs and manufactures the goods, but also who manages the logistical processes along the supply chain. In this paper, we argue that this approach to outsourcing provides new opportunities for those retailing and grocery sectors that traditionally have not considered outsourcing as a strategic option to develop their operations. Retailers, especially supermarkets, are managing an increasing number of product categories and stock keeping units that have forced them to develop their replenishment practices in order to minimise out-of-stock problems. This paper examines the options open to the grocery retailing industry that will enable it to attack the problem through outsourcing. A new process innovation, vendor managed category management, is proposed. A potential application is presented by means of one real-life case, in which a distributor offers the retailers full management of one category that includes assortment forming and logistical functions.

Selecting the right planning approach for a product

Purpose – The purpose of this research paper is to offer a solution to differentiate supply chain planning for products with different demand features and in different life‐cycle phases.Design/methodology/approach – A normative framework for selecting a planning approach was developed based on a literature review of supply chain differentiation and supply chain planning. Explorative mini‐cases from three companies – Vaisala, Mattel, Inc. and Zara – were investigated to identify the features of their innovative planning solutions. The selection framework was applied to the case companys new business unit dealing with a product portfolio of highly innovative products as well as commodity items.Findings – The need for planning differentiation is essential for companies with large product portfolios operating in volatile markets. The complexity of market, channel and supply networks makes supply chain planning more intricate. The case company provides an example of using the framework for rough segmentation ...

Coordinating material and information flows with supply chain planning

Purpose – The purpose of this paper is to study how companies can select a supply chain planning (SCP) mechanism to improve the balance between material flow and information flow.Design/methodology/approach – The methodology of the paper is an inductive case study approach. Coordination theory is used as a background for the paper. Based on a literature survey, determinants of the selection of a SCP approach are defined. Cases of SCP are used to validate the framework presented.Findings – The paper suggests that specific supply chain characteristics need to be balanced by selecting a coordination mechanism that uses information optimally to support the material flow. Flexible material flow needs frequent updates of the plan based on accurate information. If frequent information sharing and planning practices are used to support inflexible material flow, the result may be volatility in plans, and planning resources are wasted. If a flexible material flow is supported by inadequate information, waste may be...

Sales and operations planning: responding to the needs of industrial food producers

This paper investigates sales and operations planning (S&OP) at four Scandinavian industrial food producers in order to explore how the use of S&OP might help leaders to deal with the challenges set by the planning environment. Variables connected to the product and market, e.g. frequency of new product development, customer service levels and supply uncertainty, were identified as particularly critical for the S&OP process. It was found that there is great potential for S&OP in the food industry, foremost to cope with the imbalances between demand and supply and to create prerequisites for a stable production process.

Effects of delivery speed on supply chain planning

Supply chain planning in manufacturing companies is approached in this paper through empirical case-study research. The target is to chart how different types of manufacturing companies are specifying their future volumes and to identify the type of collaborative planning they are implementing with customers and suppliers. Based on interview-study results, a framework is presented to explain how flexibility is gained in the supply chain and how flexibility sources are connected to planning. Two main supply chain planning approaches can be identified: forecast- and order-focused planning. The chosen planning approach is explained less according to the production master-scheduling approaches and more according to the delivery speed requirement.