Turning Planning & Optimization into Cool Operations
Summer is here, and for many of us this season brings some of the hottest days of the year. For those looking to beat the heat, ice cream is always a sweet, cold treat. Now whoever thought about this wonderful idea in the first place? And how far has ice cream come since its invention? Here’s the skinny!
Super Sweet Tooth
In 618-97 AD, an “ice cream-like food” had its origins in China. But today, New Zealanders hold the record for the eating the most ice cream at 7.5 gallons (28.3 liters) per person per year! Americans fall in second place at an average of 5.5 gallons (20.81 liters), while Australians follow in 3rd place. In fact, these countries love their ice cream so much, they have held the top 3 records for close to 5 years.
No Meltdowns for Ice Cream Production
World records aside, there are always changing trends – even in the industry of ice cream. How would ice cream producers manage their supply for these trends? What sort of forecasting would they have to do? And do they rely on weather and temperatures to decide what and when to produce?
Seasonality is a crucial factor, and ice-cream producers need to be able to manage uncertainties and fluctuation in demand. Demand is high when the weather is warm, but what about when it’s cold? To determine the ideal time to start production, it is all about having a reliable demand plan.
A main challenge for producers is to avoid excessive inventory while maintaining stock for warm weather by securing on-shelf availability and fulfillment. Producers cannot wait for summer to be just around the corner before they begin to make ice cream. They usually start building inventory at the end of the year by implementing reliable demand forecasts plus sound inventory and production management. They also need to be flexible with their initial plan to meet demands accordingly, and monitor the effect of these changes on the supply chain.
The Scoop in Smart Planning
The planning and optimization of the inventory build-up starts typically 6 to 8 months in advance. This ensures that the relevant products are available in the correct quantities during the peak season. If a producer has high visibility of every aspect of the supply chain, changes can be reflected immediately. For example, disruption in demand can lead to later pre-production processes, which lowers inventory and reduces working capital. During the season, a thorough analysis is needed to adjust plans when factors change. If the production process allows it, producers can quickly make changes to adhere to the demand plan.
In fact, the way we produce and distribute is being reinvented with the advances in technology that’s available, as well as globalization. This is incredibly beneficial for producers faced with unprecedented disruptions. The future of production is about driving more sustainable operations for everyone, including ice cream production. For ice-cream producers, it’s a balancing act between order fulfillment and inventory and production costs. For the average sweet-tooth, it’s just one question: which flavor to choose?