6371.docx - 1 Henkel want to determine an accurate item to...

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1. Henkel want to determine an accurate item to initiate an order through its demand planning tool. It’s important to reduce obsolete items, because obsolete items can be much more cost than potential out-of-stocks. CRP was not enough to meet the 99.8% service guarantee. 2. The company relied on new products to increase sales, but only 15% of new products meeting their business goals. Private label products were eroding their market share by about 3%-4% every year. The cost of complexity at the warehouse, and the out- of-stocks at the point of sale eroded lots of their profits. The forecast is not accurate enough, 80% of the time we forecast correctly, 10% to 15% of the time we have obsoletes, and 5% to 10% of the time we have shortages. Inefficiencies in production due to an uncoordinated production forecast were costly for the company. The root cause is that Lack of feasible long-range forecasts caused production costs to skyrocket and increasing over- or under-stocks.

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