Coca-Cola Beverages Africa (CCBA) has revolutionised its resource and stock management thanks to the introduction of demanddriven material requirements planning (DDMRP). According to Barry Anderson, demand and supply planning specialist at CCBA, the company has managed to transform its supply chain by improving its delivery times, improving stock availability and accurately forecasting demand. Speaking at the annual Sapics conference in Cape Town recently, Anderson said the company was under pressure to improve its performance. “We knew that there was a problem as our forecast accuracy was stagnant in the mid-60% and we were often caught off-guard and out of stock. It was clear we had to do something different.” He said in the fast moving consumer goods (FMCG) sector standard and traditional processes were simply no longer good enough considering the volatility, uncertainty and complexity of the market. Anderson said while they had managed to streamline the logistics of the business and were moving product faster than ever before, KPIs had plateaued and no real improvement was being seen in the business due to forecasting and demand often being out of sync. The solution, said Anderson, was the introduction of DDMRP. Unlike the traditional approach to resource planning where forecasting is used to predict demand, DDMRP relies more on manufacturing product in line with actual consumer demand. According to Anderson in the FMCG business disparity between actual customer demand and that predicted by forecasting often results either in wasted stock or underproduction – both incredibly harmful to a business. “Taking a demand-driven approach is simple in principle, but requires a fundamental shift in business culture and mentality to fulfil its potential,” he said, indicating that it required a lot of training across the company. CCBA launched DDMRP in Namibia in 2017, becoming the first corporate to take it across the border from South Africa. According to CCBA’s Namibian planning manager, Steven Wicks, it was an eye opening experience, making planning simpler while creating a visibility across the supply chain. “Our stock holding has improved significantly. It enables us to react to change and demand which means we have far more flexibility than ever before. There are no more surprises.” Since then DDMRP had been rolled out in Kenya, Uganda, Ethiopia, Ghana and Tanzania, said Anderson.
DDMRP relies more on manufacturing product in line with actual consumer demand. – Barry Anderson
