MFA Responds Quickly to Market Changes with Demand Solutions
The Goal = Increase service levels without increasing inventory
The Challenge = The data required to understand what to buy was spread between the ERP, a data cube and ultimately manipulated in excel with simple formulae.
The limitations = Collating the data takes time that a fast-moving business does not have to spare. Nor is it as effective as using predictive analytics to produce a statistical forecast to form a base line for the planners and purchasers to work from.
The Solution = Demand Planning & Replenishment Planning Components
“Demand Solutions, along with integrated business planning, is the answer to our initial question: How can we sell more? We’re expecting a significant increase in customer service levels. Demand Solutions gives us the analytical ability we need to meet our customers’ expectations with less inventory, which will free up more cash for developing our business.” – Carlos Jimenez General Manager MFA
Wholesalers are under intense pressure to keep their customers, suppliers, and partners happy—and Mayoreo Ferreteria y Acabados S.A. (MFA) is no exception. As the company provides hardware, construction materials, and finishes to hardware stores throughout Costa Rica, its leadership is always looking for ways to maximize MFA’s efficiency and competitiveness. The company has more than 850 clients but wants to add to that total by extending its track record of delivering outstanding results for clients.
Until recently, though, MFA’s sales forecasting process limited the company’s agility. Operations and finance personnel had to download information from a cube or query that was linked to the company’s ERP database, dump the data into a spreadsheet, and then perform analysis manually using simple formulas that were designed to help them determine how much product to buy.
“We weren’t even working off of a forecast model—we just used a purchasing policy that relied on sales history from our ERP,” recalls Carlos Jimenez, General Manager, MFA. “As a result, there was no accuracy in our purchasing. We were constantly buying too much or too little, which hurt our customer service levels, our sales, and our financial results.”