Thise Dairy cuts waste by 20% with improved supply and demand forecasting

Scrap in the dairy industry is a huge deal. Financially, scrap quite literally means money down the drain. Environmentally, dairy production has a high impact, so making sure that every product reaches the breakfast, lunch, or dinner table is detrimental.

Reducing waste in production and sales is no easy task, when consumer demand varies, and the supply of raw milk is not eligible for day-to-day (or even month-to-month) changes.

However, Thise, known for their fresh dairy products, took on the challenges and worked intensely with their supply and demand planning. By partnering with Perito Consulting, they have not only been able to cut waste but also improve their forecast accuracy by 8%.

“I had to account for financing the project and cutting down on employees was never an option. But with such significant results in our supply and demand planning, finding the money has not been a problem,” Nick Nørreby explains. Nørreby is the Head of Logistics, Supply, and Planning at Thise Dairy.

An eight percent forecast improvement. That was the goal, Thise Dairy set for Perito Consulting before implementing their new Supply Chain Planning Solution (PERITO IBP). While an eight percent improvement in forecasting accuracy might not sound like much, the results of such an improvement would be quite significant for any company working with perishable products.

Thise Dairy needs to ensure they have a balanced production where they meet customer demand without overproducing and wasting valuable resources. And while overproducing directly translates into losing money, underproducing also comes with a price (other than opportunity loss): if Thise Dairy is not able to deliver, they risk damaging their reputation and will lose ground, especially in the professional market.

“At Thise, we aim to grow our market share within wholesales, catering, and other business-to-business sales. While going stock out is unfortunate for retailers, it can be disastrous for wholesalers,” Nørreby explains.

“If a chef is used to using our products, it could compromise her cooking if she suddenly had to change to another producer. Milk is not just milk; every product has its own unique qualities and traits. Deliverability is therefore absolutely necessary when dealing with the professional market.”

Although it is always a big promise to make, in little over half a year, Perito Consulting helped Thise achieve their forecasting goal of eight percent improved accuracy.

Today, Thise Dairy forecasts with 86 percent accuracy, and according to Nørreby that means they now dare to come closer to the lower limits of their stock, yet still avoid scrapping needlessly.

Making changes in your supply and demand planning is risky business, and Nick Nørreby is not in doubt: implementing a new planning system and processes s complex and requires experienced people to ensure a smooth and successful transition.

To him, there are therefore several benefits to having experts involved in the process:

1. Customization: Thise Dairy needed an extra feature to help forecast demand and supply on public holidays. And while this feature was developed specifically for Thise Dairy, an experienced supply chain specialist knows that every business has its own unique set of requirements.
2. Training and Support: The supply and demand experts at Thise look at the forecasts daily. According to Nørreby, a thorough training combined with prompt and knowledgeable customer support have been necessary components for a successful transformation.
3. Best Practices: With experienced people on the project, best practises and industry standards can help improve the performance of the new supply chain planning solution.

In contrast, stand-alone software may not be able to provide the same level of customization and integration. It may also lack the training and support that experienced individuals can provide.

“My colleagues, who work in the systems every day, tell me that the supporters and consultants from Perito Consulting are very easy to work with. They are readily available when we need them and truly appear to put the customer at the centre of their attention,” Nørreby elaborates, concluding:

“It’s not just a simple software system. It’s a knowledge process. And therefore, having the right people onboard is absolutely essential.”