Retailers aren't the only companies that need to get Halloween and other seasonal orders right; their product suppliers do as well, from a manufacturing, selling and fulfillment perspective.
ulfillment. But systems still represent the core mechanism used by manufacturers for meeting seasonal needs, including systems for forecasting and producing the right amount of product.
One manufacturer that employs sophisticated software to deal with severe seasonal swings in demand is Otis Spunkmeyer, the San Leandro, Calif.-based maker of cookies, muffins and danishes. Spunkmeyer sells 300 stockkeeping units into a range of outlets, including supermarkets, fast-food chains, schools and hotels. In supermarkets, it supplies in-store bakeries, the cookie section and frozens.
Using demand and production planning applications from J.D. Edwards, Denver, Spunkmeyer is currently ramping up for one of its biggest seasons, the fall, which encompasses both back-to-school and Halloween. The results of the demand planning system, which was implemented in June, are fed into the production planning system, also called strategic network optimization, which has been used for over a year.
The demand planning piece can take three years of sales history and project demand 12 months in advance, said Kevin Tyschper, manager of production and demand planning for Spunkmeyer. The system can "establish a fill rate [for retail customers] and calculate the safety stock to meet the fill rate," he said, adding that Spunkmeyer's fill rates exceed 99%.
In addition to historical sales patterns, Tyschper said, the demand planning system incorporates "market intelligence" from the sales force, such as whether new competitors are making inroads. Since it began using the system, Spunkmeyer has reduced the variance in its sales forecast, previously done with Excel spreadsheets, by 30%, he said. Prescient Systems, West Chester, Pa., also markets software to consumer packaged goods manufacturers such as Smucker's and Tropicana that forecasts demand and uses the results to help smooth out production planning.
In recent years, the advent of systems like vendor-managed inventory and collaborative planning, forecasting and replenishment (CPFR) has manufacturers and retailers working together to get the order right.