Case Saarioinen: Improving processes all the way from production to the consumers

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Introduction

Saarioinen has been making convenience foods for Finnish consumers since 1957. It’s a market leader within the ready meals segment at home and has production and sales in Estonia as well. It prides itself on quality and responsibility, and aims to positively impact the economy at production sites.

Saarioinen doesn’t aim to keep inventory as it’s in everyone’s interests to keep freshness paramount and spoilage levels at a minimum already early on in the supply chain. By optimizing its planning process, its goal is to match the purchase of raw materials and production to forecasted demand from all of its customer segments: retail, wholesale, food service, and industrial customers. This is ultimately determined by end consumers but retailers’ promotions or assortment changes also have a predictable impact.

By working closely with customers, Saarioinen can better prepare for e.g. upcoming product launches, campaigns and assortment changes, and use these insights to improve its forecast accuracy. Therefore, collaboration with all customer segments is essential. Historically this has been done quite manually in the industry, but manufacturers are now continuously developing toward more automatic processes and a more customer-oriented approach.

Saarioinen at a Glance

Finnish convenience foods manufacturer

  • Company Saarioinen Oy
  • Factories 3 in Finland + 1 subsidiary in Estonia
  • Employees 1325 (2016)
  • No of SKUs About 900 active products
  • Total turnover €249.7 million (2016)

www.saarioinen.fi

Project Goals

Saarioinen wanted to improve its demand planning and needed a comprehensive, flexible and transparent solution that would provide all the necessary tools and work well with the company’s other systems. Saarioinen’s planning processes didn’t stop at forecasting demand; RELEX needed to combine that with financial and production planning to support Saarioinen’s unified sales and operations planning process.

It was critical for Saarioinen to improve the accuracy of its forecasts and move towards customer-oriented forecasting. However, as Saarioinen hadn’t previously systematically measured sales forecasts on customer level, its historic data needed close attention in order to provide a firm basis for future forecasts.

The food manufacturer also wanted to include tools to support its demand planning processes and, where appropriate, introduce a higher degree of automation so that planners could focus on exceptions and managing issues that can’t always be predicted, such as customers’ changes to their assortment.

Project Timeline

The project began in September 2016, took four months and went live in January 2017. In tandem with the implementation, key Saarioinen staff were trained as users and super-users before the system was rolled out. The project remained on schedule and each phase of the project went remarkably smoothly. The changeover between old and new systems was completed in under a month – testament to the commitment and professionalism of Saarioinen’s staff.

After the initial project, sales budgeting tools were added to the functionalities during summer 2017, and automated promotion forecasting was added during summer 2018. The super-users at Saarioinen continue to develop the system in order to increase the level of automation.

“I can say with confidence and sincerity this was the most successful IT project I’ve ever worked on.”

– Satu Haapala, Demand Planning Manager, Saarioinen

Results

Many of Saarioinen’s functions, such as planning, production, sales and logistics, now utilize data from the RELEX system to improve their planning. Where there are no exceptions in a baseline forecast these can be directly used by the production team, while exceptions and special situations that require extra attention are handled by the demand planners. This division makes the process run as efficiently as possible.

The error margin in weekly and monthly baseline forecasts is even under 5% for some standard, high-volume products. By adding the demand planners’ expertise to the system, Saarioinen has also been able to reach very good results in the effective forecasts for challenging products.

With the new and improved processes all the way from production to the consumers, Saarioinen has been able to further strengthen its position in the consumer packaged food market.

Success factors

Saarioinen’s approach to the project was ideal – the company was well prepared, starting from the master data which was cleansed and available in good time. RELEX’s project managers helped their colleagues at Saarioinen to shape roles, responsibilities and processes needed for a successful implementation.

In order for Saarioinen to take its S&OP process to the next level, RELEX’s know-how was used to tweak their existing process while adapting the RELEX system to the parts of the process that were already working very well. Saarioinen handled change management, a key skill in any system and organizational project, very well.

“I can say with confidence and sincerity this was the most successful IT project I’ve ever worked on,” says Satu Haapala, Demand Planning Manager at Saarioinen. “RELEX’s consultants worked alongside us, providing us the support and the tools needed to ultimately succeed at what we do.”

The Results

  • Under 5% error margin in weekly and monthly baseline forecasts for some standard, high-volume products
  • Very good results in the effective forecasts for challenging products by adding the demand planners’ expertise to the system
  • Further strengthened position in the consumer packaged food market

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