SAPPHIRENOW – How Johnsonville Sausage Respond to Volatile Demand with Demand Signal Management powered by HANA
Last week at Sapphire I had the chance to listen to Ron Gilson the CIO and Paul Townsend, a BI Manager at Johnsonville Sausage talk about his company’s deployment of SAP Demand Signal Management.
First Ron gave a brief overview of Johnsonville Sausage who are a family owned company who have been in business since 1945. They consist of about 1,500 members and have six manufacturing facilities in the United Sates, one in Singapore and sales offices in Mexico, Canada, Japan, and China.
A few facts Ron shared highlighted the dominance Johnsonville have in their market:
- 3 out of 4
- 1 out of 3 Italian sausages sold in the U.S. are Johnsonville
- 2 out of 5 fresh breakfast links are Johnsonville
- Leading brand in U.S. – Bratwurst, smoked-cooked links, fresh breakfast links and patties, Italian sausage
Ron explained the broad SAP application landscape that spans ERP, Sales and Distribution, Planning, VMI, PLM, HR, Plant Maintenance, Production Planning & Detailed Scheduling, Trade Promotions and the topic of this presentation, Demand Signal Management.
Ron explained that “Demand Signal Managements primary roll is the be common data repository for all demand signal data, social, weather, POS , and Neilson syndicated data”. Ron continued. “This is important to Johnsonville as part of a larger trade promotion optimization initiative” to better anticipate consumer demand, improve forecast accuracy, help ensure on-shelf availability, mitigate risk of lost sales, and improve trade promotion.
Business Value Drivers
Ron walked through some of the business drivers of this initiative:
- Trade Promotions Optimization – Creating 3 years of demand data from POS and Nielson history to create a solid foundation of statistical results.
- Trade Promotions Execution and post promotion analysis – Moving from being currently based on shipment data to being driven based on POS data.
- Supply Chain Visibility – Johnsonville were losing visibility to inventory in the supply chain once the product leaves our DC/3PL and were looking to achieve “Plant to Store Supply Chain Visibility” by capturing “retailer data that includes store and retailer DC inventory”.
- New Product Launch Execution – The current Nielsen Data was “11,12 130 days old” , so capturing POS information means you can see yesterdays (or worst case, last week) actual demand. As Ron highlighted, “We know what scanned at the retailer yesterday AND what current inventory levels are at Store and DC”.
- Simplified Reporting and Analytics – The goal was to eliminate the current effort required to harmonizing customer POS, Nielsen, shipment and other internal data and to simplify end user experience and increase user adoption by dramatically reducing the number of tools used to report and analyze data.
Paul explained the “current state of the project” where they are currently capturing all internal shipments and finished goods inventory as well as daily POS data from Walmart, SamsClub, FoodLion and Hannafords.
As Paul stated, “the benefit of this master data harmonization is to talk to the Walmart people in Walmart terms, and to talk to internal sales people in their terms. We can also do cross retailer reporting to initiate cost savings”.
Paul continued, ”some key reporting that we are looking at is ship vs scan as well as the full supply chain visibility to see a full inventory picture and understand what days of supply looks like at a customer’s DC, and giving greater visibility into what we should be forecasting to reduce forecast error, and helping us with new product launches” .
This was a great overview, so thanks to Ron and Paul for sharing the Johnsonville Sausage journey.
To watch the complete presentation click here.