Leveraging Demand Side Risk Assessment for a Leading Canned Food Products Manufacturer
Rapid changes in lifestyles and increasing working hours have spurred the demand for canned food products. Though consumers prefer fresh and nutritious food, they are forced to adopt canned food products owing to their busy lifestyles. The primary production processes within the canned food products manufacturing sector include processing the food products, sorting, sealing, sterilizing, […]READ MORE >>
Rapid changes in lifestyles and increasing working hours have spurred the demand for canned food products. Though consumers prefer fresh and nutritious food, they are forced to adopt canned food products owing to their busy lifestyles. The primary production processes within the canned food products manufacturing sector include processing the food products, sorting, sealing, sterilizing, and packaging. The products within this industry include canned food products in rigid containers, such as tin or glass, and food in flexible packages.
The major canned food segments within this industry include:
- Canned Desserts
- Canned Meat
- Canned Sauces
- Canned Soups
- Canned Vegetables
The Business Challenge and Journey
The client, a world-renowned canned food products manufacturer, was looking at leveraging SpendEdge’s demand risk management solution. The growing financial pressures prompted the canned food manufacturer to carefully monitor their operations and optimize cash and liquidity. The company’s supply chain management executives recognized the tremendous benefits of adopting demand risk management strategies. As such, they were looking at reducing the company’s risk profile by improving the efficiency of their overall operations by comparing them with the set industry standards.
To identify challenges in the supply chain functions, the risk management experts at SpendEdge carried out extensive research comprising interviews and discussions with prominent stakeholders in the canned food products manufacturing sector. The experts also compiled information across a wide array of reliable sources such as trade shows, company presentations, industry forums.
Why should you leverage demand risk management?
Demand risk is nothing but the potential contributor leading to a loss due to the shift between demand forecast and the actual demand. Factors such as marketing, capital investments, sales, and supply chain decisions rely on demand forecasts, and inaccurate predictions may result in suboptimal performance.
In today’s dynamic economic environment, it is not easy to achieve reliable demand forecasts. Also, reviewing seasonal demands and actual sales does not offer the necessary guidance. Therefore, the process of predicting demand is a risky proposition, and it requires accurate forecasts from the firm in question. However, the failure to anticipate demand risk accurately can result in significant losses due to insufficient inventory or frozen capital. In many industries, properly managing demand risk through the use of appropriate demand risk management strategies can be the difference-maker between significant earnings and suffering financial losses.
Fundamental questions answered in this demand risk management study include:
SpendEdge’s demand risk management solution offered relevant insights that helped the canned food products manufacturer overcome challenges related to demand shortfalls. It also enabled them to develop a scenario-based demand forecasting model. The model included various scenario-based forecasts and plans. Such an approach enabled them to act quickly by pulling the alternative that best matches the circumstances they are experiencing.
Moreover, this demand risk management engagement assisted the client to achieve breakthrough improvements in their overall performance. Furthermore, it offered relevant insights to better understand the market scenario, industry standards, and expectations.
Food and beverage industry challenges:
- Inventory management: One of the biggest challenges faced by players in the food and beverage industry is the limited shelf-life of ingredients. A good inventory management system is a must-have feature in any ERP process. Also, inventory management systems help avoid wastage by offering real-time updates on inventory level; thereby, assisting firms to increase sales and profitability.
- Lot traceability: Lot traceability functionality helps food and beverage manufacturers to manage the complete tracking and tracing of all ingredients used in the processing of the final product. Besides, this functionality also assists in tracking specific allergenic ingredients used in food products.
- Adhering to changing customer preferences: The increasing consumer demand for food products that are grown organically or made with natural ingredients is creating instability with the food and beverage industry. Therefore, leading food and beverage industry players should develop efficient supply chain frameworks without compromising on cost and quality to establish themselves in the market.