CASE STUDY

Capacity Planning and Optimization: Improving Profit Margins Amid the COVID-19 Crisis

Apr 22, 2020

Engagement Summary

In a recent engagement, Quantzig collaborated with a US-based consumer packaged goods manufacturer to help them address the challenges arising due to the surge in demand for products amidst the crisis. A detailed analysis revealed that the client lacked a systematic capacity planning and optimization framework due to which they were facing several supply chain challenges. In this success story, our supply chain analytics and experts share industry insights on how COVID-19 is weighing down the supply chains across the US and how CPG companies can improve their capacity planning and optimization strategies by leveraging supply chain analytics.

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About the Client

The client is a well-known US-based CPG industry player with business operations across North America. This CPG industry giant is well-known for catering to a huge customer base and was recognized as one of the best CPG companies for the variety of goods they offer and their ability to address customer issues.

Business Challenge

With the outbreak of COVID-19, the world witnessed a major shift in customer buying patterns and a sudden surge in demand for daily utilities and healthcare products. This outbreak has already caused a plethora of changes in customer shopping behavior and market needs. Due to their inefficient capacity planning and optimization strategies, the client failed to fulfill the increasing demands for particular product segments. Meanwhile, the company was also looking to gauge the duration of these latest buying trends.

With the surge in demand for product segments like packaged goods items, edible items with a longer shelf life, the US CPG giant was looking forward to improving its demand forecasting ability while enhancing its capacity planning and optimization strategy. Considering the complexities involved in achieving their desired results, the client approached Quantzig to leverage its supply chain analytics and demand capacity planning solutions.

Contact us to know more about how our supply chain analytics solution helped the consumer packaged goods manufacturer understand the buying trends.

The challenges faced by the US-based CPG industry player included:

  • Demand forecasting
  • Capacity planning
  • Demand fulfillment

Key Deliverables

  • Reduce inventory stockouts
  • Improve inventory forecast accuracy
  • Predict consumer buying patterns and meet production requirements
capacity planning and optimization

Solution Offered

By collaborating with Quantzig, this US-based CPG industry giant embarked on a planning and optimization transformation journey that mainly focused on catering to the needs of its customers to improve profit rates by leveraging supply chain analytics and demand forecasting solutions powered by data. To help the client address the challenges, the supply chain analytics team at Quantzig adopted a comprehensive approach that led to complete transformation in their capacity planning and optimization structure while lowering the production costs.

The primary stage of this supply chain analytics and demand forecasting engagement revolved around statistical analysis that leveraged predictive modeling to forecast demand at a large scale. The use of planning and optimization models further enabled the client to deploy a robust strategy for addressing the challenges of production and shifting customer buying patterns. This resulted in a reduced production cost while meeting demands and lowering supply chain shocks.

Business Outcome

Our supply chain analytics and demand forecasting solutions helped the CPG industry player to increase demand forecast accuracy and enhance capacity planning. The benefits also include:

  • Reduced supply chain shock levels
  • Reduced production costs
  • Robust inventory replenishment plan
  • Enhanced supply chain performance

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