Meeting Notes 7/5/21 (Lukas)

Meeting 5/5/2021

Company context:

• Famous for cat and dog vaccines

• Growth target of 60% for 2021

Pain points/Objectives:

• Scattered data systems - no integration between the sites

• Improve forecast for Mexican clients → target of 80% would be fantastic (short term: 70%) → causing stock outs, high level of backorders of 10% of Sales → mitigation strategy was to increase stock

• Stock reduction target: 2020 to 2021 stock of 0% with 20% more products

• Efficiency of the planner due to most Excel work

Supply Chain:

• Biggest production in France, smaller production sites in Mexico

• A lot of CMOs

User background

Nick Neuman:

• Danish, lives in Mexico

• Experience in Siemens, Unilever, Philip Morris

Other users:

• 1 Demand planner for all Mexican products

• 1 Import planner for the Vauvert HPM

Data/ERP

• scattered ERP

• No problem to deliver 2 years of demand data

• Quality of constraint should be good

• Is working with a key stakeholder for global ERP roll-out (3-4 years horizon)

• All IT support is in France

Potential Scope: Vauvert France: Most complex with HPM

• PO is placed on full container

• 48 SKUs, low margin products

• Forecast Accuracy of 70% (last period dropped to 60%) → heavy time investment AND we want to reduce inventory

• 3-4 months safety stock → EUR 4m$ revenue per year = 1,5m€ total inventory → 10% of sales but 30% production effort

• Product is sold via MX Distributors only

1. Demand Planning

• 10-15 of MX distributors are sharing what they sold (and plan to sell) + inventory via Excel

• Different for direct customers:

• Branches: We get their stock, we get their forecast → currently placing POs based on safety stock

• Customers have monthly sales quotes → overstocking at the customer

• Sales is starting to collaborate stronger on the demand planing

• Health and medicine is hard to forecast

2. Stock Management

• Safety stock is updated yearly

• No space in the warehouse anymore - he has outsourced part of this warehousing

3. Supply Planning

• Since mid 2020, there are capacity contraints

• Mexican factory
  • We are doing monhtly forecast
  • Production Planner updates MPS with 3 freeze period (slush period)
  • MRP Planner places orders based on Safet Stock

• Supplier Carros France is most advanced, delivers for the whole world, planning per lot and then distribution to each customer
  • We dont use POs
  • They have visibility on Demand, Stock and Backorders
  • Same ERP system
  • Not very dynamic, most backorders on that supplier

4. KPIs/ Metrics

• MAE Forecast Accuracy on product level improved from 55% to 65% (in 2020 in 55% for M-3), April with 70%