How one of the largest tea and coffee producers increased the accuracy of its demand forecasting by 20%

“May Foods” case
Novo Forecast Enterprise implementation case
  • The company profile
    May Foods produces tea and coffee since 1991. It has four main tea brands and two coffee brands: Richard, Curtis, Maysky, Lisma, Coffesso and Face to face coffee. It produces more than 25,000 tonnes of products a year and has a 22% of the domestic market share in Russia.

    "May Foods" approached NOVO BI in 2016, when the company had defined a business strategy to stay ahead of the market growth. It was necessary to create defensible goals for the marketing and sales department



  • What was done

    • Implemented Novo Forecast Enterprise - an automation system for forecasting of demand, collaborative planning and supply chain optimisation

    • Now the company calculates the baseline entirely on sales statistics, free of promos. They take different depths, depending on what the specifics are for a certain customer or territory.

    • On a regular basis, the company makes delistings, various blockages and so on to organise promotional sales
  • The project tasks
    • Establish a planning process where the forecasts would be reliable.
    • Increase forecast accuracy up to 75 %.
    • Build a new data storage environment, replace the old ERP.

The project challenges


  • Low accuracy of sales forecast at regular prices. The accuracy ranged from 15 to 50%.

- The commercial department had one forecast, the marketing representatives had the other. The data and departments conflicted with each other.


- Everything was done in Excel. The company's management was choosing as the sales plan that forecast which was higher.


- Accuracy remained too low. Since the company operates in Russia and CIS countries covering all sales channels, every mistake in the forecast has led to losses.


  • Low accuracy of promo sales forecast.

- In the tea market, 70% of the sales share is promotional. The accuracy of promo forecasting, in fact, is a major part of the accuracy of the whole forecasting demand cycle.


- It was impossible to plan a discount calendar in Excel and keep a track of all the factors that would affect the level of sales with the existing tools. Moreover, it is impossible to correctly calculate the effectiveness of the promotion without an accurate analysis of the sales baseline.



Results

  • After implementing the Novo Forecast Enterprise tool, forecast accuracy has increased up to 68% and continues to grow.
  • The company can now control key promotional efficiency indicators: discount depth, amount of promo volume, promo frequency and so on.
  • The implementation of the new tool had forced the company to formalize the processes, to describe them, to coordinate with all participants, oblige these participants to execute these operations. As a result, the process has become quite civilised: now planning is accomplished quickly, accurately, and without disputes between departments.
Request a free demo


Experience the digital power of Novo Forecast Enterprise

You will be in touch with one of our team members after filling in the form


Contact us:
event@novobi.ai