Processors must improve their flexibility and collaborate across the supply chain if they are to cope with fluctuating product demand, according to Glanbia Consumer Foods Ireland’s planning manager, Chris Devaney.
“Manufacturers need to be more flexible in terms of capacity in order to deal with unexpected demand,” he told Food Manufacture. “We tell our suppliers the quantity of product we expect to sell, but we expect them to have some reserve capacity in case it goes over by 30 or 40%.”
He claimed that low volume product promotions were a difficult area to deal with. “Where we struggle is low volume products - those that sell 50 cases a week outside of promotions and then when they go on promotion they’re selling 200,000 and there’s a massive amount of ingredients and packaging that has to be brought in.
“It could be that a year’s worth of product is sold in a four week cycle. That’s the highest risk of promotion we do, so we’re working very hard with our low volume producers to have an upfront position where we say we need two numbers - a minimum of x and a maximum of y.” Devaney said Glanbia needed enough packaging and ingredients to hit the maximum prediction, but also needed suppliers to have the flexibility to sell back ingredients or use them in other customers’ products to avoid wastage.
He added that working closely with suppliers and retailers was no mean feat. “To get the collaborative process kicked off really does take a lot of effort. If you go direct to a retailer and say you want to talk to your opposite number, a lot of the time, they won’t answer your calls. Their attitude is you’ve got the forecast, so just make the product and send it in - they don’t want to work with you.”
However, Glanbia praised Tesco Ireland for its approach to manufacturers. “With Tesco we’ve got a real collaboration going on. We’ve built up contacts on the buying, operations and planning side, which we can now go to with issues, whereas with other customers we can’t talk to them, so we’re firefighting on our own trying to second guess what orders are coming in.”