AB World Foods cuts early £2 million inventory with supply chain system

Gary Brookes, head of supply chain at ABWF, says it's all part of the food manufacturer's integrated business planning strategy. The company will be using Infor SCM solutions to define the demand, inventory and replenishment requirements for its entire global operations. Prior to the implementation, he says, divisions of AB World Foods, such as G Costa, used spreadsheets based on retrospective sales performance over the previous two months. "This process provided a flat forecast of demand and did not take into consideration the different demand patterns for various types of products," he says. Consequently, the company suffered expensive overstocking of some brands, along with inadequate supplies of others. "AB World Foods is building its supply chain around Infor. We have already consolidated our enterprise applications onto Infor ERP BPCS, and this new demand forecast will help manage a lot of our business. Given that around 75% of our costs are supply chain related, that is a huge responsibility," comments Brookes. And he adds: "Throughout the phased implementation, we have seen some profound benefits. In the case of inventory planning, we have already increased our service levels from 91% to 96%. Recently, we have surpassed our target of 98.5%. In addition we have reduced our stockholding of finished goods by approximately 20% – a financial saving of over £2 million." Brookes says that ABWF's sales and marketing teams used to be "somewhat out of step" with the supply chain department. However, by integrating demand planning with stock plans, he says the company has "significantly improved sales and risk reporting", not least by brining the two teams together and improving communications between the disciplines. Next, he says, AB World Foods plans to use Infor SCM to improve supplier relationship management and to develop strategic demand forecasts for the next 12 and 24 months, which it expects to further guide stock replenishment action.