In pursuit of efficient supply chain planning
Rastelli is a leading supplier in the global market and family-owned enterprise that specializes in premium quality meats and seafood. With an annual revenue of $600 million, Rastelli has established themselves as a trusted source for the finest hotels, restaurants, and retailers both in the U.S. and internationally. Despite Rastelli’s significant growth and global reach, they have remained true to their founding principles, prioritizing product quality and exceptional customer service.
In the fall of 2022, to support and accelerate their expansion, Rastelli made a strategic investment in state-of-the-art supply chain planning capabilities. This forward-thinking move has already yielded substantial benefits, reinforcing their position in the market and enabling further growth.
Rastelli’s significant sales growth and the 2021 expansion of their production and distribution facility highlighted the need for improved operational support. Initially, they operated without a dedicated planning system, leading to a production process that was largely reactive to customer orders. While customers appreciated this flexibility, they needed a more sustainable approach. Gaining visibility of customer demand to optimize production and enhance supply chain efficiency became a key priority.
The existing ERP system offered some basic planning functionality, but it was insufficient for Rastelli’s growing needs. A comprehensive supply chain planning solution was required to meet the increasing complexities of their operations.
In June 2021, Rastelli began evaluating vendors. After meeting with five different suppliers, RELEX emerged as the preferred choice due to having a complete supply chain planning suite that provided all functionality they needed. Not only could RELEX seamlessly connect and work in parallel with their existing ERP system, it was also easy to use, flexible and intuitive. Features such as the spreadsheet-like pivot tables were particularly well-received, since a familiar user-friendly interface would facilitate a smoother transition and adoption.
Demand forecasting solution implemented in 6 weeks
In January 2023, after just six weeks, Rastelli went live with the RELEX demand forecasting solution.
Previously, Rastelli had no formal forecasting process, which meant that sales representatives lacked a baseline forecast for comparing their projections and those of their customers. As their sales teams adjusted to the new system, it enabled more effective management of product availability and shipping, along with prompt responses to any short orders.
As a result, Rastelli’s forecast accuracy at the customer level has seen significant improvement, now reaching the mid-eighties. Considering the starting point, this level of accuracy is a substantial achievement and a testament to the effectiveness of the new system.
Inventory visibility triggers immediate $3.5M savings
With automated demand forecasting up and running, it was time to tackle production planning and inventory optimization. The work already generated $3.5M in savings. This is without counting the reduced warehousing, transportation, and packaging costs.
Rastelli can now see the number of days of inventory given current stock levels, planned production, forecasted demand, and customer orders. The implementation also revealed key insights into the company’s stock coverage. They made an eye-opening discovery regarding excess stock for some products, which was traced back to Rastelli’s interactions with customers. Prior to having reliable information, the sales team couldn’t effectively challenge or follow up on customer projections, often leading to discrepancies between projected orders and actual call-offs. This lack of alignment sometimes resulted in excess stock.
With RELEX, a more transparent and informative view of the supply chain became available. The system provided clear visibility into the details of each transaction, including the specific customer, the sales representative involved, the forecasted demand, and the actual amount called off by the customer. This level of detail has enabled Rastelli to engage in more meaningful conversations both internally and with their customers, leading to better alignment and more efficient stock management.
One of the most important benefits is the ability to visualize information. The supplier needed a way to determine what was really in the warehouse. Rastelli now has a view that looked at finished goods inventory and defined it by analyzing safety stock settings, the current forecast, open orders, and more. The report was enlightening and immediately kicked off an effort to turn the inventory into cash.
A new and improved S&OP process has also taken shape. The executive team, including sales, logistics and operations, meet once a week to talk about upcoming promotions, volume changes, new customers, and forecast anomalies. RELEX demand forecasting and optimized production and inventory plans are driving the discussions in these meetings.
Planning has evolved into a more strategic element within the business. With RELEX, Rastelli now has a comprehensive view of their supply chain, enabling more targeted and effective discussions. This advancement has been transformative for the S&OP process, significantly enhancing its efficacy and impact on overall business operations.
The idea of building inventory to an 8-week forecast caused some initial concern with concerns that it would only worsen an already capacity-constrained situation. But with RELEX, they knew that producing eight weeks out would benefit the business if based on a good forecast. They had to stop producing inventory toward hypothetical sales numbers and just-in-time orders. An accurate forecast means they can simultaneously improve customer service, operational efficiency, and inventory situation.