Three years ago, we shared a Wonderful blog about the Sales & Operation Planning (S&OP) at Wonderful Brands. It showed that Within the same organization there can be various S&OP needs in different divisions or over time. The S&OP trajectory of Wonderful Brands was, and still is, a great example of the interaction between S&OP and revenue growth and illustrates how both can reinforce each other.
To remind you, Wonderful Brands is part of The Wonderful Company, a privately held $5 billion company and industry leader in consumer goods with 10,000 employees worldwide. The American company offers high-quality, healthy brands, helping consumers make better choices every day. By now, their Fiji Water, POM Wonderful juices, or Wonderful Pistachios may ring a bell.
The Wonderful S&OP story so far
Back in 2018, Heidi Vanderswalmen, Supply Chain Director at Wonderful Brands, told her inspiring story of Wonderful Brand’s first steps in the EMEA region. This regional growth was initially strongly driven by customer demand and the supply chain in the U.S., but eventually the EMEA organization set up their own S&OP process. It quickly became clear, however, that relying solely on Excel wouldn’t cut it, so Wonderful Brands called in the help of Solventure. Based on the criteria Wonderful Brands defined - affordability, flexibility, planning on item level, fast implementation and quick results – we implemented the Arkieva One Plan S&OP Software Suite.
Since then, their S&OP process matured significantly over time. The biggest advantage was that the Arkieva software supported the company to make the switch from volume-driven to value-driven decision-making. After the upgraded S&OP contributed greatly to Wonderful Brand’s financial and regional growth in its first couple of years, Heidi now shares the next chapter in her supply chain growth story.
The next chapter: streamlining supply chain meetings
Since Wonderful Brands implemented Arkieva in 2018, we started to optimize our S&OP based on the clear reports that were available via the tool. On the one hand, the data made our supply chain meetings more efficient and created some information overlap between those meetings. That’s why we returned to the design board to create structured meeting templates and determine which supply chain data we want to discuss in the corresponding supply chain meeting. We defined clear inputs and outputs from each meeting, and who should attend them, to avoid information overlap.
By structuring our S&OP even further, we could make time for other supply chain deep dives. One example is an ABC classification of our customers and products based on (absolute and relative) margin and volume. This estimate helps us prioritize certain items within our range of products. We regularly pull other detailed supply chain metrics and financial KPIs from Arkieva, such as forecasts, volume deviations or Profit and Loss (PnL), to structure our process and assess the outlook for the rest of the year. Over the last three years, we are able to perfectly predict what our end-of-year results would be. This meant we could proactively adjust our budget and, for instance, scrap promotion budgets or increase them, if possible.
Dealing with unforeseen peaks in demand
Like many of our colleagues in the food industry, we dealt with enormous peaks in demand over the last two years, while making sure our employees could cope with this when working from home. Fortunately, the supply chain structure we built up using Arkieva was so sturdy thatwe did not experience any major disruptions, even when the demand for retail products was rising significantly. We were able to respond fast to this shift by gathering all the necessary sales data in Arkieva, communicating them quickly to our sales colleagues and adjust our capacity accordingly.
Brexit was another big challenge which Arkieva helped us overcome. Supported by a clear overview on our volumes, forecasts and sales, we could build up our stock in preparation (three times!) without experiencing any delays or disruption of our supply chain.
Supporting regional and economic growth
Since 2018, Wonderful Brands has expanded its European market, especially in Italy, where we are now working with a large-scale distributor. Economically speaking, we ended our fiscal year with positive numbers for the last three years. We even reported a volume increase of 10% in each of the last two years, which was a great result considering the loss of the travel retail market during the pandemic.
Benefitting from the Arkieva volume insights, we were also able to optimize our inventory and reduce our stock levels in the last three years. For instance, we achieved a 15% drop in pallet spaces without any considerable out-of-stocks of products with a short shelf-life. The previously mentioned ABC exercise also helped us to determine which SKUs weren’t viable anymore, so we could remove them from our product line.
Thanks to these positive results, we are investing again in our market with a media campaign in France. Going forward, we aim to repeat this kind of campaign every two years to increase our brand recognition. Another ambition we have is to introduce pistachios without shells into the European market. This product is already widely popular in the U.S., but is still reasonably unknown in Europe. And we want to change that.
The road ahead
In the short term, we’re planning to roll out our own S&OP process to our distributor in France, as we already have joint supply chain meetings with them and share our Arkieva reports regularly. In the future, we want to include our distributors in Italy and the Middle East as well. This will be a challenging change, as everyone has their own S&OP system, but it will be worthwhile to get insights into their forecasts and optimize them according to our own sales.
Another aspect we want to keep streamlining is our promotional management. We already started to make promotion efficiency reports in Arkieva to classify each kind of promotion and see what works and what doesn’t. Additionally, we now monitor volume estimates during a promotion to determine when the most volume is sold, and if this is dependent on the type of promotion. This kind of micro-management is something we want to get better at, so we can forecast our supply chain even more accurately, and have our stock at the right place at the right time. And I’m certain Arkieva will be the perfect S&OP tool for this endeavor.
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