Overview:
In the highly competitive and seasonal beverage industry, precise inventory management and accurate demand forecasting are crucial for maintaining operational efficiency and market responsiveness. The following success story narrates the journey of a European beverage giant that partnered with FUTUROOT to pinpoint and bridge mission-critical gaps in its inventory management capabilities, significantly improving forecasting accuracy and reducing operational overheads.
Beverages Industry Challenges:
The beverage industry faces unique challenges in inventory management, including seasonal demand fluctuations, perishable products, complex distribution networks, and the need to maintain optimal stock levels while minimising holding costs. All these factors have a cumulative bearing on the bottom-line performance and, of course, the brand image. Therefore, players in this sector are primarily locked in an intense balancing act with the risk of stockouts against excessive inventory while accounting for varying lead times and storage requirements.
Process Challenges for The Client:
The beverages industry leader encountered several operational hurdles- some exclusive, others reflecting broader industry challenges. With murky visibility into inventory management and demand, the company struggled with escalating inventory costs and frequent stockout events, intensifying the already mounting margin pressure on the management.
Their inventory management system showed entrenched inefficiencies, with outdated demand data driving 35% of inventory decisions. Additionally, the misalignment between manufacturing and distribution schedules caused 50% restocking delays, leading to missed sales opportunities and increased holding costs.
The FUTUROOT Advantage:
Acknowledging an imperative for evidence-based process optimisation to sustain competitiveness and profitability, the beverage company intended to leverage FUTUROOT’s process mining expertise for deeper insights into its inventory management and demand forecasting practices. The goal was to identify the root causes of inefficiencies and implement targeted improvements for measurable outcomes.
The Implementation Journey:
FUTUROOT’s intervention began with a comprehensive analysis of three years of client historical sales and inventory data. The intelligent process mining platform revealed critical insights into demand patterns, stock level fluctuations, and forecasting accuracy. The FUTUROOT team realised that seasonal trends were inadequately factored into the current forecasting models the company has been using, resulting in a significant disconnect between manufacturing and distribution schedules.
Based on these insights, FUTUROOT experts implemented a continuous improvement plan featuring bi-monthly forecasting reviews and enhanced stock rotation practices.
Business Value Delivered:
FUTUROOT’s process mining solution delivered substantial improvements across key performance indicators:
30%
reduction in stockouts
40%
improvement in forecasting accuracy
20%
reduction in inventory holding costs
Additional benefits:
Enhanced alignment between manufacturing and distribution
Improved seasonal demand prediction capabilities
A more responsive inventory management system
Optimised stock rotation practices
Through FUTUROOT, the beverage company addressed its immediate operational concerns and established a robust demand forecasting and inventory management architecture. The project demonstrates the criticality of reliable process insights for sustaining a market-centric and profitable beverages manufacturing business.