A fast growing pet food client was facing frequent stock outs and low service levels, because the orders generated by their internal systems were not optimized to the client’s business model. The client was looking to set up a robust supply planning process to help generate appropriate purchase orders, prevent out of stock (OOS) situations, and improve service levels.
Merilytics partnered with the client to develop a robust supply management tool that was customized to handle the company’s unique business model. The tool considered various factors such as demand forecast, future product expirations, lead time, MOQ, safety stock and open purchase orders (POs) to estimate order quantities. The tool also generated regular outputs for the Finance team to better understand future outlays on product procurement. The tool enabled the company to order the right quantity at the right time.
The customized supply management model helped the company significantly improve their purchase order placing activities leading to a more than 5 percentage point increase in service levels. In addition, the company was able to meet the conditions required to onboard a major new client without facing out of stock events.