"Our brands are the same as any other brand, especially those at the luxury end," says Van Schoor. "If the customer comes into the shop and can't find our product, he or she has the disposable income and self-confidence to substitute our brand for our competitors'. That's dangerous." Van Schoor says the group has a average stock availability target of 98%. "But for some premium brands the target is 100%," he says. That means it will live with excess stocks of some products, just to ensure that a thirsty customer can get his or her favourite drink, every time.
But SABMiller also wants to maximize its profitability. To do all this it must integrate information from a lot of sources. These include sales forecasts for about 2,600 sku locations or depots for the brewing division and 3,100 for the soft drinks division, as well as planned promotions data from the marketing and promotions division, as well as cost and production data, among others. These data must then be converted into raw material purchases, manufacturing scheduling, distribution and stockholding plans for 12 factories (seven breweries and five soft drink plants) and three tiers of distributors, broken down into between 70 and 80 stock-keeping units (skus) for the brewing division and around 270 for soft drinks. And all this must be optimised for profit. "There is inherent volatility of demand in the soft drinks business because of seasonal change, but less in the beer market," Van Schoor says. Even so, improving the accuracy of demand forecasts and schedules and integrating
them to boost profitability was too complex for SABMiller’s demand forecast and supply
system. The in-house system, developed over years, had most of the usual problems associated with legacy systems: it was inflexible, complex, hard to communicate with, and hard to integrate with newer systems, Van Schoor says.
Integration with SAP system
After a global search, SABMiller settled on Infor's advanced supply chain management system, in particular Infor's demand forecasting system. This takes information from modules of SABMiller's SAP enterprise resource management system, integrates them with sales forecasts from the field, and feeds back to the manufacturing resource planning system and financial systems to generate production schedules, raw materials orders and volume and financial forecasts. This will let SABMiller make any of its products in the most cost-effective location, given the local demand, manufacturing, transport and inventory costs. It will also increase its flexibility in responding to changes in demand. Products will no longer be made only in a single plant to optimise production runs, but, based on more holistic data, in the plants that optimise overall profitability.