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1. Henkel want to determine an accurate item to initiate an order through its demand planningtool.It’s important to reduce obsolete items, because obsolete items can be much more cost thanpotential 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 meetingtheir 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 oftheir profits.The forecast is not accurate enough, 80% of the time we forecast correctly, 10% to 15% of thetime 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 thecompany.The root cause is that Lack of feasible long-range forecasts caused production costs to skyrocketand increasing over- or under-stocks.