For the Mexico City-based Grupo Modelo, forecasting is about keeping its entire supply chain synchronized, providing the highly vertically-integrated and fast-growing brewer the agility to respond rapidly to trends and market needs.

The company uses Demand Manager, Supply Chain Planner, and Transportation Manager solutions from I2 Technologies to synchronize its operations from raw materials management and production through sales and promotion management, and delivery.

Julian Fernandez Sanchez, supply chain director for Grupo Modelo.

In its domestic market, the company uses sales histories with a revolving three-year horizon to calculate an annual statistical forecast on a monthly basis, and is transitioning toward a weekly forecast schedule.

It incorporates three-month forecasts from each of its domestic wholesalers, including market intelligence on upcoming promotional events and holidays, directly through the software.

The company is currently looking at rolling out the same process with its US distribution.

Grupo Modelo’s ability to fine-tune its response to the market through its use of Demand Manager and other segments of its supply chain solution, has enabled the firm to decrease safety stock inventory levels in its domestic market by 28 percent and stock-outs by 20 percent over the last year, while simultaneously slashing transportation costs by 30 percent, reports Julian Fernandez Sanchez, supply chain director for Grupo Modelo, Mexico.

“It’s also very valuable in launching new products, which is something we are doing now in much greater quantities,” he says. “By definition we know that the forecast is inaccurate But now we also have Supply Chain Planner monitoring the inventory levels, and if the actual numbers start to deviate from the projections in the system, we can react faster and try to compensate more quickly for a lack of sales or a need for more product in the market.

arlier this year, Grupo Modelo entered into a joint venture with Nestle to take over its bottled water distribution in Mexico. In a short period of time, Sanchez and his team were able to model the entire water supply chain into the rest of its systems to optimize distribution and production of the product. As part of its arrangement with Anheuser-Busch, Grupo Modelo is also adding new brands to its domestic distribution, including Carlsburg and Tsing Tao, which it will import from China.

One reason we are able to do so much now is that with these tools, escalating operations and adopting new business has become much easier,” Sanchez observes. BW