The Absolut Company: Balancing Service and Inventory Creates a Delicious Mix
The world’s #2 selling vodka brand leaves nothing to chance when it comes to quality and sustainability. Here’s how they teamed up with ToolsGroup partner Optilon for a seamless supply chain planning process.
With continuously shifting consumer preferences and brands around the world rushing to deliver delicious new options for alcoholic beverages, The Absolut Company has been able to navigate the increased complexity while staying true to its heritage and commitment to quality and sustainability. A recent feature in The Wall Street Journal highlighted how Absolut’s modern approach to supply chain planning balances nicely with the company’s traditional production practices.
Production complexity and SKU count had been steadily increasing for years, and finally prompted Absolut to seek a better and more efficient way to manage production planning for its extremely popular vodka. The company leaves nothing to chance, and Absolut selected ToolsGroup partner Optilon to support the technology endeavor. A key factor was Optilon’s ability to integrate best-of-breed solutions for production planning, demand forecasting, inventory optimization, and replenishment into a seamless process.
“The spirits maker says demand-planning software is helping improve its distribution to an increasingly complicated international market marked by the proliferation of products aimed at shifting consumer tastes. That’s also allowing Absolut to keep its production, from sourcing materials to distilling and bottling, anchored in a small corner of southern Sweden.”1
Peter Neiderud, director of manufacturing and supply chain at The Absolut Company, worked with Optilon to implement an end-to-end planning capability to complement a new era of Absolut Vodka while honoring the long-standing tradition of manufacturing in Åhus, a small village on the Baltic Sea. Through a high level of automation in planning, proactive decision making, and optimized production sequences, challenges were resolved. ToolsGroup Service Optimizer 99+ was put in place for demand management, fulfillment and replenishment, while Compass from Plannet was implemented for production planning in Åhus.
Even with a fully integrated solution, a single planner can control the entire forecasting and production planning process and it all takes just four hours each Monday morning—a 90% reduction in time from the previous method. Absolut also has a better overview of the bottlenecks and they can keep a higher deliverability when their inventories are temporarily low. The added focus in the modeling approach on service level gave rapid results in stock reduction, service level stability and enabled the company to shorten customer order lead times.
“Working together with The Absolut Company has been a great success,” said Jim Thulin, business area manager for Optilon. “The combination of skilled people and mature processes with a well-defined set of rules and constraints in production gave the implementation team a good opportunity to streamline and automate the end-to-end planning process.”
1The Wall Street Journal “Absolut Mixes Machine Learning Into Its Spirits Supply Chain”, Paul Page, May 9, 2019