CASE STUDY A Demand Planning Makeover THE CHALLENGE
the amount of each product needed at each point in the supply chain, Rodríguez explains. To achieve this, Belcorp began leveraging an advanced and automated multi-echelon inventory optimization (MEIO) model within SO99+. Among other functions, the MEIO model automatically calculates the optimal stock values at each node within a supply chain. This enables multi-level supply networks to meet their service-level THE RESULTS Among other benefits, Belcorp gained the ability to automatically meet service levels, optimize inventory, automate processes, manage exceptions, and handle demand planning more efficiently. NEXT STEPS Belcorp plans to implement ToolsGroup’s lot size optimization module with price break constraints. Belcorp needed a more effective way to optimize inventory and service levels within its complex supply chain, where the universe of products changes every few weeks. THE SOLUTION The company partnered with demand and supply planning solutions provider ToolsGroup and implemented its Service Optimizer 99 (SO99+) solution. Belcorp also began using an advanced and automated multi-echelon inventory optimization (MEIO) model within SO99+.
Belcorp’s direct-sales model and multiple brands lead to supply chain complexity. Challenges include global sourcing and distribution, inventory optimization, and demand planning.
All cosmetic products are approved under the Leaping Bunny Program by Cruelty Free International, which ensures that the company is committed to help end animal testing around the world. Along with cosmetics, Belcorp offers fashion accessories.
This requires leveraging the right data, model, process, and culture, and ensuring the right inventory is in the right place with the right quantity. “If we try to manage inventory and distribution with spreadsheets, we are dead,” Rodríguez says. Instead, Belcorp needs an inventory planning and optimization solution that enables the company to work toward an agile supply chain. Belcorp management identified a handful of providers of inventory planning and optimization solutions. As they studied each one’s different capabilities, it became clear ToolsGroup’s approach best fit the company’s needs. Its offerings are “more scientific, more data-based, and more driven by advanced mathematical models that can help inform decisions to guide inventory policies,” Rodríguez says. HIGHLIGHTING THE RIGHT SOLUTION Service Optimizer 99 (SO99+), ToolsGroup’s supply chain planning solution, which has been developed and refined over 30 years, leverages advanced probabilistic and optimization algorithms to optimize inventory levels, while factoring in a company’s desired service level at the lowest cost. Achieving optimal inventory levels also requires mapping constraints, such as the amount of inventory the company can obtain from each supplier and at what time, as well as defining
BEAUTIFYING SERVICE, INVENTORY, AND DISTRIBUTION
“While a goal of Belcorp’s inventory management efforts is efficiency, the process starts by defining our service- level strategy, and then working toward it,” Frasquet says, noting that maintaining strong service levels is critical. Unlike traditional retail, there are no inventory buffers for a direct-selling model. If consumers order a product and don’t receive it on time, they have no immediate access to an alternative. This can become frustrating for both consumers and the consultant, who loses the sale and profit. Moreover, if a consultant decides to stop working with Belcorp, the company essentially loses the capability to sell into that market. “It’s best to secure the sales force and secure the consumer,” Frasquet says. Because most of Belcorp’s products contain materials sourced from across the globe, and given the dynamic nature of the market, Belcorp runs and evaluates distribution scenarios every day. The goal is to adopt an inventory planning automation concept—that is, achieving the highest service with the lowest optimal cost and workload.
84 Inbound Logistics • June 2024
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