Demand planning can guide businesses to improve the accuracy of revenue forecasts, align inventory levels with peaks and troughs in demand, and enhance profitability for a given channel or product. Many of our clients who rely on IBM Cognos TM1 for financial planning, reporting and analysis have asked us to help them design and develop TM1-based demand planning applications.
Here’s an example of how we used TM1 for demand planning in the food and beverage industry. In particular, we built this application for a craft brewery.
On one hand, what could be more fun than performing demand planning for the craft beer and cider industry? On the other hand, what could be more challenging? Beer distribution is not a simple model. Instead, the brewer distributes its products to a wholesaler, who sells the products to a retailer (a store, bar or restaurant). This particular brewer has an added complexity in that they issue their products with a “sell by” date, meaning any product remaining with the retailer or wholesaler after the “sell by” date needs to be returned to the brewer.
We worked with this craft brewer to design and develop a demand and sales planning solution using IBM Cognos TM1 integrated with IBM Cognos BI. We developed specific cubes that enable the brewer to track and analyze distribution, sales, depletions and returns by wholesaler. The system first tracks shipments to each wholesaler, then it records depletions (the products by wholesaler that have gone out to retail outlets). Lastly, the system tracks returns from the retailer to the wholesaler, and then back to the brewer.
Now, the brewer can make strategic decisions on where to invest marketing and sales support by wholesaler, identify top performers and develop strategies to keep them there.
Read more about demand planning in the food & beverage industry.