Shopping in Spain Now Under CPFR‘s Reign

 

Situation: Eroski found that its hypermarkets were suffering frequent stock-outs on their store shelves, and often for key promotional items. Customer service at Eroski’s central warehouse was also unsatisfactory, where products were not always delivered on time due to lack of visibility.

Process: Along with Henkel, Eroski engaged Accenture (formerly Andersen Consulting) to collaboratively manage its commercial plans, product categories, promotions, and new product introductions and deliveries, with the overall goal of improving sales. The team began with all Henkel detergent category products carried by Eroski.

To develop its sales forecasts, Henkel used the Demand Planning module of Manugistics—NetWORKS Collaborate. Manugistics also provided a web tool instrumental to the partnership, used to develop business plans and common promotional plans, compare sales forecasts of each partner, flag exceptions, share sales forecasts and order forecasts.

To ensure the success of the initiative, the companies sought to combine their complementary knowledge of the market. Eroski knows the dynamics of its sales points and promotions, while Henkel is an expert in its products and the impact of promotions on sales. Accordingly, the Eroski customer service teams focus more on introducing promotional impacts to the forecasts, while Henkel demand planners now focus more on synchronizing demand planning with production planning. With a new five-week visibility, Henkel can better optimize its operations.

Results: The CPFR initiative has proven to Henkel and Eroski the value of collaborative commercial and operational planning. Prior to the initiative, information on promotions, the introduction of new products, and local activities were not systematically included in the logistical planning process. Now these aspects are integrated into one forecast. This forecast is reliable and allows enhanced visibility to the supply chain. Controlled by both partners, the process helps to achieve the objective of increased sales forecast accuracy, improved customer service levels, and reduced stock.