Supply Chain Planning Helps Ice Cream Maker

Håagen-Dazs (Teaneck, N.J.), a producer of ice cream and frozen yogurt, has improved its supply chain planning with a new system that is helping the company get the right product to the right place at the right time. With international distribution, Håagen-Dazs faces many challenges in managing its supply chain because of its geographically distant production sites, vastly different lead times for different markets, changing seasonal demands, and perishable products. Complicating the problem is the fact that the company's international markets need to be served on a strictly just-in-time basis. This means inventory can be built up to meet demand from the U.S., but not for Europe or Asia.

Shipping considerations also present a major challenge. For instance, only the West Coast plant has the capability to make certain product lines, a portion of which must then be shipped to the East Coast market. Furthermore, a large amount of data about customer preference trends, plant capacity and distribution channels has to be analyzed in order to establish quarterly volume targets for each plant and create distribution plans.

Using an existing spreadsheet system, analysts took approximately seven days to develop production estimates for the two plants. This approach looked at production requirements in very limited detail. For example, the analysts were only able to calculate production by total gallons of ice cream or yogurt, not by specific flavors, sizes or products. Distribution was not taken into account, and there was no evaluation of trade-offs. This system was ultimately deemed too time-consuming and incapable of delivering the required level of detail on a timely basis.

Håagen-Dazs began investigating supply chain planning systems that would link manufacturing and distribution decisions. The company wanted the solution to answer basic questions about its operations. And to minimize hardware dependency over the long term, it was a requirement that the solution run in an open systems environment.

Håagen-Dazs decided on the Linx supply chain planning system from Numetrix (Norwalk, Conn.). Hewlett-Packard's HP Apollo 9000 Series workstations were selected as the hardware platform.

Shipping and manufacturing time periods, plant capacity, and product requirements can be taken into account with the new system. Alternatives and "what if ?" scenarios can be more easily constructed and evaluated. The system evaluates sourcing, production and distribution data, and can find the best solution quickly, often in minutes. If the plan needs to incorporate new information, factors can be changed and the analysis rerun.

Thanks to the new system, Håagen-Dazs has improved both its planning process and its ability to respond quickly to changes in the business environment. The time spent on supply chain planning, in particular, has been dramatically reduced. Instead of seven hours, the entire supply chain planning process, including the evaluation of several scenarios, can be completed in less than five hours, with better answers.

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