As the maker of iconic brands like Mike and Ike's jelly beans and marshmallow Peeps, Just Born Inc. knows a lot about how to satisfy the nation's collective sweet tooth. What it didn't always know was how much candy to make, due to serious gaps in its demand forecasting operations.
Now it uses Sita Corp's Web-based Sojourner forecasting tool in combination with the SAP ERP forecasting module to get there.
"In the past, we had our brokers only forecasting our seasonal business, because seasonal business is a little bit tricky. Once a holiday hits, then you're talking heavy markdowns at the retailer, which we have to share in. Forecasting is really important," said Edward Broczkowski, the company's director of ERP implementation.
Just Born, which makes a range of candies, from Hot Tamales, Mike and Ike's, and the old school Goldenberg's Peanut Chews that have been in production since 1917, is based in Bethlehem, Pa.
The company primarily uses candy brokers to sell its products to retailers, although it also employs a small direct-sales staff. Candy brokers operate much in the same way that beverage distributors sell a brewer or bottler's products.
In its past efforts at demand forecasting, Just Born focused primarily on its seasonal sales because of the increased capacity during those times, the risk of losing money when product goes unsold if peak production isn't met with peak demand, and customers' unwillingness to buy Peeps left over from the previous Easter, for example.
"Even though the candy is fine for about 24 months, everybody wants the freshest candy. Nobody wants candy from last year," he said.
In conjunction with a broader SAP ECC 6.0 ERP implementation that went live last December, Just Born decided to closely re-examine its SAP forecasting business processes and decided that a broader look at year-round sales and not just seasonal pushes were in order. "We really wanted to formalize that and say, 'You really need to forecast your entire everyday business, not just the ups and downs, or whenever you feel like it,'" Broczkowski said.
To help make that happen, Just Born deployed Sita Corp's Sojourner software, a cloud-based forecasting tool designed to be used on a mobile device. That way, the company avoids having to manually enter hundreds of broker-submitted spreadsheets.
Broczkowski said the company takes forecasted numbers based on past orders and what brokers think they'll sell and uses them as another piece of data in the SAP forecasting mix.
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"I can run [an SAP] BusinessObjects report that shows me actual sales versus the SAP forecast versus the broker-submitted forecast. I can then make some determination of who was closer. It's basically another key figure we can filter on in our BOBJ environment," he said. An analyst also compares the numbers, after which they're dropped into the demand plan and run through SAP MRP [materials resource planning]," he added.
One of the challenges, he said, has not been getting the tool to work, but to convince the brokers to participate fully in meeting Just Born's new request for forecasting data.
"Initially they were really willing to play ball in terms of those seasonal forecasts, since that's what they're used to doing" he said. "But we've had sporadic instances of noncompliance on the everyday forecasting."
Participation has grown over time, he said, to the point where the company hopes to be up to speed when the new fiscal year begins July 1.
"It's just a huge process shift from where our brokers were," Broczkowski said.