FORECASTING SYSTEM INCREASES SALES AND REDUCES INVENTORIES AT NABISCO
Nabisco currently produces hundreds of different cookies crackers and other snack foods. All of these products are produced in more than 30 company owned and contract bakeries and shipped to over 100 distribution centers throughout the United States. With its Direct Store Delivery network Nabisco then delivers these products directly to more than 1oo,000 ship-to locations including supermarkets and other retail stores. Customer orders are usually placed with only one to two days lead time. With such short lead times accurately forecasting the demand for II of these products is critical. Too much of the wrong product results in excessive inventories and possible spoilage too little results in stock outs and lost sales to competition.
Nabisco, therefore has developed an account based forecasting system to predict the product requirements for each of its major customers (or accounts). Accordirq 0 ark Barash, manager of Sales Forecasting Systems for Nabisco's supply chain the new for casing system based on the success of an initial pilot is projected to reduce finished good inventions 5 percent nationally. At the same time the level of service provided to its costumers proved significantly resulting in increased sales and profits for Nabisco. This increase n out is a tributes to the additional sales that are realized from the Significant reduction in the frequency of stock outs. The cost of developing this new forecasting system was less $ 200,000/