Case Study: Land O’Lakes Butter Becomes Fresher with Demand Planning

1.  Why are inventory management and demand planning so important for Land O’Lakes? What is the business impact of not being able to manage inventory or predict demand for this company?

For Land O’Lakes, the important of those issues is heightened because its products are perishable and sales volume and product mix change greatly from season to season. Because of fluctuations in demand and short product shelf life, Land O’Lakes needs to take special care to plan its inventory so it can handle customers’ needs in every season without incurring unnecessary costs. If it is not being able to manage inventory or predict demand for the company, it will cause a huge business impact. Land O’Lakes must keep a sufficient amount of store-ready product on hand, but any excess inventory that can’t be sold before products start to spoil must be discarded, damaging the company’ bottom line. Besides, the more the inventory on hand, the more that company must pay to maintain the inventory.

2.    What people, organization, and technology issues had to be considered when selecting Oracle’s Demantra as a solution for Land O’Lakes?

·         People

That issues that had to be consider by using Oracle Demantra Demand Management software is that will the workers know how manage the system and fix it. Is that easy for them to learn about the system and used it.

·         Organization

The organization need to make sure that this system will help the company to solve all the problem arise and work as what they need the system to do.

·         Technology

The company has to know that to implement a new technology it will involve high cost for buying and maintenance. So will they have enough financial resources to use the software.

3.    How did implementing Demantra change management decision making and the way that Land O’Lakes ran its business?

By implementing Oracle Demantra Demand Management software it has given:

1.      Plan for forecast demand on hand and to optimize production planning.

Demantra generates long-term, medium-terms and short-terms reports that helps managers plan to forecast demand and to determine which customers need shipments immediately. The systems also analyze the optimal way to manage raw materials.

2.      Keep just enough inventories on hand.

Demantra has helped Land O’Lakes cut their total inventory. By using the EnterpriseOne ERP system the company able to create accurate forecasts and to plan production to maintain “just enough” inventory, resulting in millions of dollars in saving.

3.      Manage its supply chain

Supply chain managers rely on Demantra reports to determine which Land O’Lakes facilities should be assigned to produce and distribute product. Reducing the distance between the factory and the customer lower costs for fuel, transportation and overall production.

4.    Describe two decisions that were improved by implementing Demantra.

·         The total inventory of finished product on hand by four full days is being cut down.

Ø  It is resulting in millions of dollars in saving.

Ø  There is an increase in the accuracy rate of demand forecasting.

·         The planning of the best routes for shipment trucks.

Ø  Land O’Lakes able to pack its trucks with more goods, improving their average truck weight by 4 percent to 40000 pounds.

Ø  The company transportation costs are being reduces.

Ø  The saving can be used to expand into international markets