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

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

Reducing waste in production and sales is challenging when consumer demand varies, and the supply of raw milk is not subject to day-to-day (or even month-to-month) changes.

However, Thise, known for its fresh dairy products, took on the challenges and worked intensely on its supply and demand planning. By partnering with PERITO IBP, it has cut waste and improved its 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 IBP before implementing their new Supply Chain Planning Solution. 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 balanced production where they meet customer demand without overproducing and wasting valuable resources. 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, it risks damaging its 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 unique qualities and traits. Deliverability is therefore necessary when dealing with the professional market.”

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

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 needlessly scrapping.

Making changes in your supply and demand planning is risky, 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:

• Customization: Thise Dairy needed an extra feature to help forecast demand and supply on public holidays. While this feature was developed specifically for Thise Dairy, an experienced supply chain specialist knows that every business has unique requirements.
• Training and support: The supply and demand experts at Thise review the forecasts daily. According to Nørreby, thorough training combined with prompt and knowledgeable customer support has been necessary for a successful transformation.
• Best practices: With experienced people on the project, best practices 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 daily, tell me that the supporters and consultants from PERITO IBP are very easy to work with. They are readily available when we need them and truly appear to put the customer at the center of their attention,” Nørreby elaborates, concluding:

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