The importance of optimising internal procedures
Part of Mac Baren Tobacco Company’s constant growth and renewal is represented by its quest to improve the efficiency of its internal processes connected to production, distribution and the administration of business management.
‘Innovation’ doesn’t just mean entering new markets or purchasing new machinery. These actions require the solid organization of the activities carried out in the company.
Since 2017, the Mac Baren Tobacco Company has decided to work towards optimizing the production and distribution process of its products, by implementing a Sales & Operations Planning Process. One of the goals is to prevent out of stock situations or the opposite, that is to say an excess of production compared against the demand of the market.
Cross-checking demand and supply
Sales & Operations Planning Manager, Dick Esmark explains; Over the past few years, we have been working hard to find the best way to make the market demand and the production capacity of our establishment align as much as possible. In order for this to happen, organizing production solely on the basis of orders is not sufficient; we need to make predictions based on the market trends for the next 12 months, consequently adapting all other activities.
In order to reach our final goal, we must carry out correct analysis and data management. The data can tell us what will happen in the future; it can give us precious indications to anticipate out of stock situations; it can allow us to react in a more scientific way and with more confidence in certain situations.
Our sales department is continuously monitoring market developments and customer requirements in order to secure the most accurate view of the time ahead. All market data are then collected and validated by our Demand Manager, Ole Houborg. This is an essential part of our forecasting cycle, as trustworthy data is key to the S&OP process.
Efficient decision-making processes
Such a complex project requires decision-making that involves the different departments at the company. Considering that we distribute our products to over 80 countries, the enormous complexity of this project comes as no surprise, but we know we can still improve a great deal and this is what we want to do, because it is the only way to keep growing.
It is well known that a drastic change is always difficult to put into practice, because people need to get used to the new system of procedures. It is necessary to have sensibility to proceed in small steps until reaching the goal of improving planned processes or strategies.
At Mac Baren Tobacco Company, the S&OP process runs as a monthly cycle. Starting with the people from the Sales Department, who review customer demand and signs of on the sales forecast. The Supply Department subsequently use this data to organize the production, based on the predictions made for the rolling 12 month horizon.
Once the scenarios for the following period has been decided, a pre-meeting with the Sales Manager and Supply Manager takes place to define two or three strategies to put in place to manage the predicted scenario. These strategies are then discussed with the CEO who makes the final decision.
It’s all about people
The biggest challenge for a company like ours, which strives to undertake this kind of internal optimization, is the need for all employees and departments to collaborate efficiently in order to reach a common goal and cross functional alignment. In order to succeed, it is of utmost importance that all internal stakeholders have the ability to work with a holistic approach, for the benefit of the company as a whole.
Technology can do very little, even if we live at a time where technology appears to dominate everything. It is the people who are at the centre of the project and it is the people who can tangibly improve the internal processes of our company even more so.
Basically it comes down to 10% technic and 90% people.
Having a person who coordinates the various internal departments and facilitate the monthly process from a-z is very important, because he has the opportunity to evaluate the pros and cons of each department and can propose solutions in order to optimize the processes, to improve the activity of each employee.