Modern Planning for the Bottling Industry
By Russel Gummelt
Following a period of upheaval — spurred by supply chain disruptions, increasing regulations, new customer behaviors and COVID lockdowns — the beverage industry has changed. Today's bottling industry has adopted new tactics to stay effective.
Allitix has devised a solution that reflects the needs of these bottling businesses — a solution in the Anaplan-connected planning platform that delivers all the insights regional bottling distributors need to know to optimize their performance, quarter after quarter.
Volume Planning From the Top Down and the Bottom Up
Accurate demand planning never goes out of style. This type of planning allows regional bottling businesses to calculate the market for their products and stay efficient with their amount of production and inventory for the next year.
A comprehensive forecast will combine top-down and bottom-up analysis. Here's what that means:
The top-down approach to forecasting means estimating demand at an aggregate level, predicting the performance of a large selection of products over the next year based on market signals.
Creating a top-down forecast means accounting for variables such as sales volume by region at the highest levels of the forecast hierarchy. These year-over-year predictions based on the general dynamics of the market set the overall parameters for a bottling business's expected sales volume.
A bottom-up forecast means projecting inputs at the micro-level to reach the revenue and income targets set by higher-level forecasts.
Bottom-up forecasts come from data input at the retailer level, along a much shorter time scale, typically quarter by quarter. These granular numbers are the signals that let the distributor know how many of each product to make and ship over the course of a quarter.
Planning the Anaplan Way Using Allitix Solutions
Allitix's connected demand forecast and accuracy application enables bottling businesses to gain fast, comprehensive insights into their performance. The scalable, configurable solution is designed to boost operational efficiency and support both top-down and bottom-up forecasting.
Seamless integration between Anaplan components makes it possible to transfer predicted volume in a live, fluid manner. Four different modules within the Anaplan platform have an impact on bottling demand planning:
Revenue Growth Management (RGM): This module lets bottlers engage in detailed promotion management for their targeted regions. While some marketing and promotional campaigns are handed down from their parent companies, bottlers maintain control over their connections with retailers in their territories, and the RGM module lets them know which promotions are generating profits or losses.
Stat forecasting: The stat forecasting offerings within Anaplan allow bottlers to generate baseline numbers. These projections reflect how much of various beverages bottlers can expect to sell during target periods. Such projections are important for Revenue Growth.
Budgeting: This component allows organizations to build fully featured profit and loss statements for their target regions. By inputting factors such as capital and operational expenditures, ad spend, net pricing, construction and more and averaging it over a time period, bottlers can see a clear picture of profitability.
Demand forecasting: The projections made via this component are more granular than the general marketing outlook enabled by RGM. This allows bottlers to operationalize highly specific numbers, such as the amount of one SKU sold from a specific warehouse, comparing real numbers to previous forecasts.
Using this tailored solution, bottling companies can:
Drive Consensus Meetings for the Demand team: This means combining statistical forecasting, historical drivers and top-down assumptions to produce numerous forecast iterations with input from multiple stakeholders in the business.
Contrast variances between historical forecasts and actual demand: This means demonstrating models' accuracy.
Experience granular, scalable insights into data that matters: This may mean sales and demand plans by retailer, package and division. Analysis types include measuring stock-keeping unit (SKU) and flavor performance and judging the effectiveness of promotions in influencing consumers.
Anaplan collects data automatically from diverse sources throughout a given business and acts as a single source of truth. This means bottling businesses can now have near-real-time insights into the metrics that matter to them, all without hours of low-value manual work that would have gone into data collection, input and collation.
Building Accurate Forecasts That Evolve
Using near-real-time data to devise evolving forecasts is an effective way to operate a bottling business, but it's one that may have previously been unavailable. There's a reason for this: planners have been too busy with the manual upkeep of spreadsheets to truly capitalize on the value of projections.
A planning approach powered by Allitix's bottling industry expertise can finally change this status quo. Automatic data aggregation frees the team up to start tweaking their predictive models, using their data instead of just aggregating it. With a flow of up-to-date information from throughout the company, the efficiency of volume forecasting can rise by leaps and bounds.
The results in the industry speak for themselves — since partnering with Allitix, Swire Coca-Cola USA has shaved its budget process from one and a half months to two weeks.
Achieving Real Value with Better data
Forecasts in Allitix's bottling industry application can shift from week to week as new promotional information comes in from both the regional bottler and its corporate partner. The calculations bottlers rely on include inputs such as:
Sales transaction history: An un-promoted forecast that can provide the baseline for a sales forecast.
Syndicated data: Industry information about the company and its competitors, laying out market share and the potential effects of promotions.
Order data: Used to produce a demand forecast, which provides a complementary perspective to the sales forecast.
The planning advantages of Anaplan reach multiple levels of a bottling business. While the forecasting team is harnessing insights that apply to the retailer-package-division level, financial planning and analysis (FP&A) experts can unlock material-profit center insights based on using volume as a predictor.
Volume Planning That Speaks the Language of Business
An Allitix implementation fits seamlessly into an organization's operational infrastructure. IT and FP&A departments are both included, allowing them to work together effectively, rather than becoming siloed. Finance can access the revenue numbers integral for its planning purposes while IT provides support from the data side, cleaning and directing the raw information that powers the model.
The solutions are flexible, meaning they'll apply no matter what planning strategy a company prefers. The bottling industry accommodates multiple approaches, and there's no one right way to operate in the space. Some companies rely on their sales forecasts and need assurances that their incoming data is valid. Others treat data as more of a suggestion and allow users free rein in planning.
Whichever method a company prefers, Anaplan's ability to allocate large volumes of data allows businesses to plan at a higher level and provide results at necessary levels.
The Allitix team has experience in bottling, which has prepared the experts to engage with new bottling partners, applying past lessons to design powerful new workflows, quickly and efficiently. In some cases, Anaplan implementation has fully transformed the way bottlers have thought about using data.
Anaplan allows the creation of accurate near- and long-term forecasts to feed demand and budgeting. Allitix is the ideal partner to set up such an implementation — in the bottling space and beyond.
To learn more about Allitix's bottling industry app and flexible, scalable demand forecasting strategy offerings, contact us today.
Even more granular performance insights are possible, determining popularity at the SKU and profit center levels. Leaders equipped with this output can make decisions about how much of each item to produce, what to promote, where to warehouse each product and how to allocate costs.