Predicting Demand

Litehouse Foods is a leading manufacturer of refrigerated dressings, dips and sauces. The company was founded in 1963 by Edward and Doug Hawkins, who expanded their father's restaurant, The Litehouse, to package and distribute the restaurant's signature salad dressing to local grocery stores. This family-owned business has expanded to include mass retailers, national grocery chains and other food services organizations as its customers. Litehouse prides itself on its commitment to using the freshest, highest quality ingredients with no preservatives or artificial additives and strives for excellence in all its endeavors.

Growing Pains

Litehouse Foods was growing rapidly in order volume, as well as number of product lines -- the manufacturer more than tripled its offerings in a five-year period. To avoid stock outs, oversupply and safety stock expense, it was critical for the company to be able to predict demand and effectively handle increased procurement and distribution complexity.

Litehouse Foods wanted to increase visibility into the planning and production process and forecast consumer demand at a more detailed level. Through this, the company would be able to improve customer service and strengthen existing relationships with its retail partners.

Since 1998, Litehouse Foods had been reaping the benefits from Ross Systems' iRenaissance ERP technology, achieving better tracking of inventory and providing increased customer service levels. Current service levels average 95 percent for fill rate and 97 percent on-time delivery. Plus the integration of the financials reduced Litehouse Food's closing time down to just a few days.

Forecasting for Accuracy

Having optimized operational efficiencies, the company wanted more accurate and timely demand forecasts to ensure the right amount of inventory was available at the right time. In the summer of 2002, Litehouse selected Ross Systems' iRenaissance SCM suite for its demand planning capabilities, which allow suppliers to plan more proactively and accurately, and are especially suited to the needs of companies whose demand patterns are shifting due to retail promotions, seasonality and other variables.

"The success and business improvements already achieved made the choice easy and Ross' expertise working with food and beverage manufacturers is unparalleled in the industry. Ross' dedication to food processors is clear through its depth and breadth of knowledge and practical experience," says Bill Hawkins, COO, Litehouse Foods. "On a personal level, Ross exhibits a very real commitment to each customer and to building the best relationship."

Reaping the Benefits

Not surprisingly, Litehouse Foods says it found a trusted and knowledgeable partner in Ross Systems. The company has realized substantial cost savings in less than a year, increasing product fill rates by 10 percent, while simultaneously reducing finished goods inventory by 6 percent, saving considerably on carrying costs.

In addition, Litehouse Foods has increased reliability and forecast accuracy, while dramatically improving visibility and increasing customer-service levels.

Out With the Old

At the end of the day, Litehouse Foods went from using spreadsheets to forecast more than 1,000 units at the category level on a monthly basis to being able to forecast at the product level on a weekly basis, which is much more efficient and reliable.

iRenaissance SCM gave Litehouse Foods greater control over its production and planning processes, ensuring that the proper product mix and quantity were being produced. Improved production scheduling capabilities negate the need for emergency shifting mid-production, which was previously costly and time consuming.

In addition, Litehouse Foods no longer maintains unnecessary safety stock to account for unexpected shortages, which has brought the company closer to a make-to-order production model and helped to cut costs. The increased efficiency has allowed Litehouse Foods to make better use of existing capital and human resources.

According to Hawkins, "by achieving a correct one-number forecast for the entire company, we can now plan, modify and manage at the customer level like never before possible. This data is turned into useful information that allows us to proactively plan for trade promotions, improve overall collaboration with our trading partners and, through this, increase customer satisfaction."

Thanks to Ross Systems, Litehouse Foods is now positioned for future growth and anticipates even greater return from the iRenaissance SCM suite.