A.G. Barr partners with SCALA to implement successful Demand Driven production

Major UK soft drinks business A.G. Barr has significantly improved stability on its production lines after partnering with leading supply chain and logistics consultancy SCALA.

Very high service levels to supermarket chains are critical in the soft drinks industry. However, A.G. Barr, the company behind the famous IRN-BRU brand, was struggling to get to over 98.5% service as a result of over and under-stocking, due to constant production re-prioritisation.

Having recognised the need to switch to a radically different process that delivered improved service levels, A.G. Barr called on the expertise of SCALA and cloud-based supply chain solution provider Orchestr8, to provide them with an offering that would enable them to align their supply chain decisions with actual market demand.

SCALA’s Demand Driven service allows businesses to benefit from more stabilised production schedules, high customer service levels and inventory reductions, by regularly buffering the production system at key points, replenishing the buffers according to actual demand and factoring in lead times.

In 2017, A.G. Barr started a managed path to Demand Driven production. The approach quickly aligned inventory with demand, and production volumes with replenishment need. As a result, the critical service level of 99+% reached within just four months.

A full switchover was made in 2018 to fully integrate inventory levels, production scheduling and distribution to the flow mechanics of the Demand Driven tool set. Following the 2017 trial, the reduction of inventory cover levels has continued.

John Perry, managing director at SCALA, commented: “Companies like A.G. Barr are now recognising the edge that a demand driven approach can offer in terms of improved service, lower inventory and manufacturing stability. For A.G. Barr, consistently high customer service levels aligned to improved production stability was the prime driver for adopting Demand Driven Production Management.

“With the challenges of a changing market, we wanted to offer A.G. Barr a simple way of implementing Demand Driven processes that was results focused, practical and efficient, enabling them to reduce the impact that frequent forecasting changes has on their production lines with traditional MRP processes.”

Andrew Memmott, Supply Chain Director at A.G. Barr, commented: “We set a goal to find a solution to meet high service levels on a consistent basis whilst providing improved levels of stability in manufacturing and that’s what the team achieved. Since the implementation of SCALA’s Demand Driven approach, ‘wrong product’ and ‘wrong inventory production’ issues have been highlighted and tackled, and the reduction of inventory has continued.

Relying on the inventory buffer levels set by demand and lead time calculations has enabled the planning team to spend much less time reacting and rescheduling. Instead they are now able to spend quality time on looking forward and reviewing the planning impacts of commercial events and programmes on the supply plan.“

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