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DanoneWave
DanoneWave Takes a FreshApproach to VMI with TrueCommerce Datalliance
Summary
- VMI identified as a key enabler for “Customer First” program
- Cumbersome legacy platform would not support cost-effective VMI program expansion
- Transition to TrueCommerce Datalliance went smoothly while delivering consistent or better results for clients
- TrueCommerce Datalliance has provided the ability to transform VMI from a transactional focus to a strategic program, and to cost-effectively expand program
TrueCommerce Datalliance VMI Delivers
- VMI Analyst productivity significantly increased
- VMI partners expand to 20 with more in process
- Superior performance maintained at approx. 60 turns and 97% inventory levels
Background
DanoneWave produces and sells six million cups of yogurt a day in almost 100 flavors, styles and sizes. The top-selling brand of yogurt worldwide, Dannon® is sold under the names Dannon and Danone. DanoneWave prides itself on consistently delivering high-quality, wholesome products, and on responding to consumer needs with nutritious, innovative new products and flavors.
VMI Identified as Key Enabler
As part of DanoneWave’s “Customer First” program focused on continually strengthening customer relationships, the company has established a vision of being their customer’s ‘yogurt supply chain expert.’ The goals of the program are to:
- Improve visibility up and down the supply chain
- Influence the flow of product to the shelf
- Improve shelf visibility for the shopper
- Reduce waste throughout the supply chain
This strategic program has many dimensions, but in 2010, Vendor Managed Inventory (VMI) was identified as one key enabler, and one of the quickest and most scalable programs DanoneWave could utilize to help meet their goals. Effective VMI would enable DanoneWave to use customer data to manage warehouse replenishment, which would in turn enable DanoneWave to better influence store and shelf replenishment.
“We can add significant value for our customers with increased supply chain collaboration,” said Paula Sawyer, DanoneWave’s VMI Program Manager at that time. “With the tremendous growth in yogurt consumption, demand is volatile. And with a shelf life of less than 50 days, the spoilage rate can be high for retailers if supply is not well-managed. By helping our partners closely manage the flow of our products, we can become a preferred partner and gain strong influence in the overall yogurt category.”
Existing VMI Program Was Narrowly Focused
“In order to deliver against our clients’ objectives, we’ve always recognized the need for IT platforms that are highly functional and productive,” says Phil Ben-Joseph, ASM Director of IT and BPO Services. “As our number of VMI clients grew, we researched additional VMI platforms to determine if we could benefit from a change in providers. Our current system had been highly customized over the years and vendor support was limited due to the customization.”
Like most consumer product companies, DanoneWave already had a VMI program in place – in fact it had been operating for over 10 years. The program was delivering good results in terms of supply chain metrics, including nearly 60 turns and 97% warehouse service levels. But DanoneWave recognized that the program as it currently stood was narrowly focused and was considered to be a supply chain process only. In addition, it was only implemented with a limited number of high-volume retail partners.
“We can add significant value for our customers with increased supply chain collaboration. By helping our partners closely manage the flow of our products, we can become a preferred partner and gain strong influence in the overall yogurt category.”
Paula Sawyer
Program Manager,
DanoneWave
Taking a Broader View
In order to fully leverage VMI, the DanoneWave team knew they needed to re-think the program in the broader “Customer First” context and look at the benefits VMI could deliver beyond just transaction processing and supply chain metrics. Those objectives remained important, but they needed to look at it as a more strategic program, and as an important tool for achieving full ‘success at the self level’ as defined by:
- Increased sales through faster new product introduction and quicker response to promotions
- Decreased costs through reduced spoilage, lower inventory and fewer order errors
- Increased shopper satisfaction through greater on-shelf availability and consistent product freshness
Achieving those objectives would greatly benefit both DanoneWave and their customers, and have far-reaching results in terms of long-term growth. With that potential in mind, DanoneWave knew they wanted to not only take the program to the next level with existing VMI partners, but to also expand the program to a wider range of partners.
When the DanoneWave team reviewed their current VMI platform in the broader perspective, they found that it was a clear constraint. It required extensive manual input to generate proper replenishment orders, meaning significant additional VMI analyst resources would be needed to support additional VMI partners and volume. The current system had limited tools for managing new products and promotions, and was costly to maintain, difficult to update, and lacked the desired reporting flexibility.
“We needed a VMI platform that was highly scalable, more adaptable to market changes, and much more cost-effective to operate,” said Sawyer. “That pointed us in the direction of a solution using the Software-as-a- Service (SaaS) approach. But… it was critical that the solution we selected would enable us to maintain our high level of performance – even as we expanded the program. In addition, the change had to be transparent to our existing VMI partners when we made it.”
TrueCommerce Datalliance Selected As Next Generation VMI Platform
After a detailed evaluation, DanoneWave selected TrueCommerce Datalliance as their new generation VMI platform. Sawyer explains why: “We selected TrueCommerce Datalliance VMI for several important reasons – first and foremost because it automates the majority of the planning effort. Since analysts need only review and confirm replenishment orders calculated by TrueCommerce Datalliance, we can handle much more VMI volume per analyst. That is the key to us being able to expand our program. The cost of the TrueCommerce Datalliance service is actually absorbed by avoidance of the need to add the number of new analysts we would have otherwise needed to add. Beyond that, all of the system maintenance, on-going enhancements, training, and support are included as part of the service, allowing us to eliminate all such expenses associated with our legacy system,” concluded Connolly.
“Using TrueCommerce Datalliance, we have significantly increased our VMI program productivity. That change is enabling us to expand our program to more partners and more locations so we can realize the strategic benefits of VMI across a broader range of our business”
Jonathan Peltzer
Sr. Customer Solutions Manager
DanoneWave
