Unconstrained demand plans and siloed planning processes meant Danone couldn’t respond to market opportunities quickly enough. o9’s end-to-end platform allows Danone to be highly responsive, running all key planning processes simultaneously across their entire global enterprise.
o9 Digital Brain for Food & Beverage
How Danone, the global food and beverage company, fuels its growth engine with end-to-end planning
Improved inventory optimization means there will be significantly less production waste.
Business Scope Challenges
Inability to respond quickly to commercial opportunities
Commercial and supply chain planning used to take place offline at Danone. The feasibility of commercial plans and their P&L impact was not fully understood until the monthly IBP meetings occured. In the interim, commercial teams could not respond quickly enough to capitalize on new commercial opportunities.
With o9, Danone can simulate the feasibility of commercial plans and understand their full P&L impact within the system in real time. This will enable Danone to capitalize on commercial opportunities quickly since building and reconciling plans will take seconds instead of days. This increased market responsiveness is key to fueling Danone’s growth engine.
No concurrent planning
Danone used to run unconstrained demand plans, so the teams couldn’t view material or capacity constraints until the Demand and Supply plans were reconciled. This led to a high number of expedites, lower than desired fill rates, and high inventory levels.
With o9, Danone has concurrent planning and can view the feasibility of demand plans in terms of capacity and material constraints. Danone can also view its four business units in the same plan for the first time.
Lack of optimization in production scheduling
Danone is a large purchaser of milk directly from farms. They have to commit to buying milk months in advance before they have a clear picture of category-level demand. At the production scheduling stage, they had trouble optimizing how to best use this milk supply, which SKUs to prioritize, and when to re-sell raw milk.
With o9’s optimization engine for production scheduling, Danone knows which SKUs are optimal to produce and when they should produce them. The optimization engine will also notify them when they should re-sell raw milk or a WIP product.
Key Functionalities Implemented
- Supply Chain Knowledge Graph Foundation
- Supply Chain Planning and Control Tower including Transportation Scheduling, Full MRP, Production Scheduling and MEIO
- Integrated Business Planning (IBP) including IBP SC Simulation and IBP P&L/Commercial Simulation
- Demand/Commercial Planning including Collaborative Demand Planning and Demand Sensing
SAP APO and SAP IBP
Success Factors — 3 reasons why o9 was selected
- The end-to-end cross-functional solution enables Danone to view the feasibility and P&L of commercial plans.
- Real-time scenario planning means Danone can understand how to best respond to risks and opportunities.
- The production scheduling optimization engine ensures the most profitable use of key commodities.
- €13-16m in annual incremental revenue due to more profitable decision-making and increased service levels.
- €106m in annual cost savings from inventory optimization.
- Increased employee productivity: Plan reconciliation between commercial and supply chain teams should take 4 seconds instead of the usual days.