BUSINESS PROBLEM – SOLVING CASE

TOPIC: SUNSWEET GROWERS

CULTIVATES ITS SUPPLY CHAIN
 COMPANY OVERVIEW

 Sunsweet Growers Inc. is an agricultural cooperative headquartered in Yuba

City, California.
 It is known to be the largest handler of dried tree fruits, with the capacity of
processing and market nearly 40,000 cases of dried fruit everyday.
 In addition to cranberries, apricots and pineapples, they also have the facility
to produce more than 50,000 tons of prunes annually for over one-third of the
global market.
 PROBLEM IDENTIFIED

 Sunsweet was discovered to have unique supply chain management issues.

 Consequently Sunsweet happened to be constrained by both factors of
demand and supply, which the company failed to control efficiently.
 That is, they were unable to control their supply, which was determined by
the weather ad growing season, or its demand, which was set by the market.
 Similarly to other producers, Sunsweet saw its spikes in demand during
holiday season, such as Easter, Christmas, etc.
 Normally, growers harvest fruit from August to October, and then apply all
their effort in processing, packaging and delivering.
 However, when the demand peaked around holidays, Sunsweet often found
themselves shelling out extra money to pay workers overtime to fulfill their
orders.
 Scheduling, planning, production and distribution of varieties of fruits in
packaging bearing 20 different languages became a complex operation.
 POSSIBLESOLUTION RECTIFIED

 Sunsweet intended to improve scheduling and line utilization while reducing

inventory, transportation costs, and order lead time.
 Therefore, in order to address these supple chain management (SCM) issues,
Sunsweet adopted a sales and operations planning (S&OP) program.
 This ought to balance demand and supply on a regular and formal basis and
keep them balanced as conditions change.
 PRIOR SCM ISSUES

 Prior to implementing S&OP, Sunsweet managed their supply chain with a

paper-based spreadsheet system.
 That system became increasingly inadequate as the business grew more
complex due to outdated data, difficulty in supporting collaboration, and lack
of powerful tools for representing the business problem.
 Sunsweet’s planners spent too much time managing the spreadsheets, and
performing tasks such as cost analysis, that took up nearly 3 working days.
 The company however, wanted to perform planning and tasks in hours, not in
days, and the ability to model multiple versions of a production plan to
schedule plant production more efficiently.
 In order to do to perform tasks efficiently and effectively, Supply Chain
Consultants found Zemeter S&OP as a possible solution.
 ZEMETER S&OP

 Zemeter replaced the old Excel-based system, Sunsweet revamped its

forecast meetings.
 Under this new project, Sunsweet was to scrub all of its data and unify it into
one database.
 Therefore, in order to show the value of S&OP, Sunsweet went through a
five-step phase implementation process:
1. Demand Visibility
2. Demand Planning
3. Inventory Planning
4. Supply Planning
5. Finite Scheduling
 FIVE-STEP PROCESS OF S&OP
IMPLEMENTATION
1. The demand visibility stage focused on improving communication and decision making at
every level. In this phase only Sunsweet’s various groups gained access to the same data
and each others goals. They required just 4 weeks to implemented demand visibility.
2. Demand Planning was to provide complete forecasting solution, which provided planning
routinely. The demand planner also analyses input from multiple sources and outputs the
best plans for proposals. Lastly, it also included an early warning system that dispenses
email alerts to proper employees under certain situations.
3. Next was the inventory planning phase that calculated current inventory and used data
about inventory history to detect trends and predict problems before they caused
significant losses.
4. The fourth phase addressed supply planning. Supply planner raised the effectiveness of
planning across its network of suppliers, with specifically maintaining a uniform labor force
throughout the year.
5. The final phase of implementation was finite scheduling, which had to with the daily
operational activities at the cooperative plant’s headquarters. It also handles fruit sizes,
material availability, overtime and downtime, change over times on packing lines and
other work oriented issues.
 ZEMETER S&OP POSITIVES

 With Zemeter in place, Sunsweet was able to move its planning processes to
weekly meetings using the latest information.
 Everyone shared up-to-date information about finite scheduling, daily
production, and inventory levels.
 Therefore, Sunsweet was better positioned to meet demands without
throwing off operational costs and long-term production plans.
 Sunsweet received its return on investment in its S&OP system in about half
the anticipated time, six and half months, while implementation was still going
on.
 The early warning email system moved up all the problems up to about two-
three weeks.
 Planning and cost analysis that would take days, now takes just about 4-5
hours.
 Information from the system helped to reduce number of production lines,
inventory and transportation costs, and cut overtime from 30% to 10%.
 Zemeter created an efficient and collaborative environment.
 ZEMETER S&OP OBSTACLES

 The modern supply chain software was liberal in permitting custom

configurations.