Best Practices In Demand And Inventory Planning For Food And Beverage Companies

By Jack Payne

It’s a classic scenario in food and beverage manufacturing— struggling to coordinate the opinions of sales and marketing with manufacturing and supply chain initiatives on what should be produced, when it should be produced, and where it’s needed.

The lack of good supply chain coordination can lead to frequent changes in production schedules, expedited transfers and shipments in distribution, excessive stock-outs, erratic levels of customer service, lack of visibility into future demand, and inventory in the wrong place and at the wrong time.

For many food and beverage companies, these problems are not new. In fact, their root cause typically revolves around a few basic issues—mainly, a lack of shared knowledge about the supply chain planning function, inadequate decision support systems, and unavailable or inconsistent data due to lack of integration to the core business system.

Supply chain planning involves functions such as demand forecasting and planning, distribution inventory planning, and plant capacity planning and scheduling. The right mix of strategy, education, and systems can have a very high impact on a manufacturer’s overall operations—and ultimately its bottom line.