Executive Briefings

The Road to Savings Is Paved with Better Forecasting

Family vacations aren't the only things endangered when oil prices shoot up. Business opportunities can take a hit as well, as anyone involved in the manufacture or sale of asphalt can tell you. When petroleum prices rise, asphalt sales hit the skids.

So what do you do if your business depends on variable demand for such a product? Akzo Nobel Surfactants, which has an extremely wide range of chemical applications, turned to Supply Chain Consultants, Wilmington, Del., for help in bringing some certainty to the planning and forecasting of its Asphalt Applications unit. The task of that group is to develop chemistry and technology to improve the performance and life of asphalt pavements. But regardless of the product's quality, high petroleum costs can put the brake on things. Municipalities and other government units simply curtail road building and maintenance when the price of asphalt gets too expensive.

Akzo Nobel Surfactants now uses Zemeter Sales & Operations Planning software from SCC to help the company factor the uncertainty into its forecast. Otherwise, its inventory levels suffer.

Of course, oil prices aren't the sole reason why preparing such forecasts is a challenge, according to Bill Shearer, who was demand chain manager at the manufacturer at the time of this evaluation. A highly diverse group of industries use Akzo Nobel Surfactants products. Their needs affect supply and demand, not to mention those inventory levels.

"Before the Zemeter implementation, we ran into many challenges with sharing data across different areas of the company," Shearer says. "The company's previous supply chain management solution only allowed one user at a time, making data transfers extremely difficult." Zemeter is a multi-user solution. Problem solved.

The previous system had to manipulate data in Excel. But that problem's solved as well. "Now we can easily create a new forecast using Zemeter because reports are pre-set," Shearer says. "Productivity has gone up tremendously as a result, saving us at least a couple of days a month."

Shearer says the improved collaboration and ability to optimize costs globally have led to significant savings for the manufacturer. In addition, he says, Zemeter S&OP has helped the company to drastically reduce inventory while also tracking it more easily.

"Inventory from the SAP system is exported into Zemeter, which provides the tools to manipulate the data and perform detailed analysis. You can do comparisons of what changed from month to month, for example, which is quite a hard situation to figure out sometimes."

Family vacations aren't the only things endangered when oil prices shoot up. Business opportunities can take a hit as well, as anyone involved in the manufacture or sale of asphalt can tell you. When petroleum prices rise, asphalt sales hit the skids.

So what do you do if your business depends on variable demand for such a product? Akzo Nobel Surfactants, which has an extremely wide range of chemical applications, turned to Supply Chain Consultants, Wilmington, Del., for help in bringing some certainty to the planning and forecasting of its Asphalt Applications unit. The task of that group is to develop chemistry and technology to improve the performance and life of asphalt pavements. But regardless of the product's quality, high petroleum costs can put the brake on things. Municipalities and other government units simply curtail road building and maintenance when the price of asphalt gets too expensive.

Akzo Nobel Surfactants now uses Zemeter Sales & Operations Planning software from SCC to help the company factor the uncertainty into its forecast. Otherwise, its inventory levels suffer.

Of course, oil prices aren't the sole reason why preparing such forecasts is a challenge, according to Bill Shearer, who was demand chain manager at the manufacturer at the time of this evaluation. A highly diverse group of industries use Akzo Nobel Surfactants products. Their needs affect supply and demand, not to mention those inventory levels.

"Before the Zemeter implementation, we ran into many challenges with sharing data across different areas of the company," Shearer says. "The company's previous supply chain management solution only allowed one user at a time, making data transfers extremely difficult." Zemeter is a multi-user solution. Problem solved.

The previous system had to manipulate data in Excel. But that problem's solved as well. "Now we can easily create a new forecast using Zemeter because reports are pre-set," Shearer says. "Productivity has gone up tremendously as a result, saving us at least a couple of days a month."

Shearer says the improved collaboration and ability to optimize costs globally have led to significant savings for the manufacturer. In addition, he says, Zemeter S&OP has helped the company to drastically reduce inventory while also tracking it more easily.

"Inventory from the SAP system is exported into Zemeter, which provides the tools to manipulate the data and perform detailed analysis. You can do comparisons of what changed from month to month, for example, which is quite a hard situation to figure out sometimes."