o9 Solutions, Inc. Case Studies Transforming Supply Chain Management with IoT: A Case Study of a Large Cigar and Tobacco Manufacturer

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	Transforming Supply Chain Management with IoT: A Case Study of a Large Cigar and Tobacco Manufacturer o9 Solutions, Inc.

Transforming Supply Chain Management with IoT: A Case Study of a Large Cigar and Tobacco Manufacturer

o9 Solutions, Inc.

Technology Category	Analytics & Modeling - Digital Twin / Simulation Functional Applications - Inventory Management Systems
Applicable Industries	E-Commerce Retail
Applicable Functions	Logistics & Transportation Sales & Marketing
Use Cases	Demand Planning & Forecasting Digital Twin
Services	System Integration
Challenge	The customer, a large manufacturer of cigars and traditional pipe tobacco, had grown extensively over the years. This growth led to a scattered IT landscape with fifteen different ERPs and a complex business structure involving different channels such as retail, wholesale, and e-commerce. The company faced challenges with its omnichannel complexity, where each go-to-market channel had its own supply chain configuration and complexities. This led to forecast accuracy issues as the company applied a one-size-fits-all stat forecasting model. Additionally, the company lacked end-to-end visibility across all nodes on their supply chain, leading to an unconstrained supply chain operation. The company also struggled with scenario planning, running its operations based on an inaccurate forecast and an unconstrained supply plan without the ability to run business scenarios and translate that into financial consequences. Read More
About Customer	The customer is a large manufacturer of cigars and traditional pipe tobacco, owning about 200 leading brands. Over the years, the company has grown extensively, leading to a complex IT landscape with fifteen different ERPs and a diverse business structure involving various channels such as retail, wholesale, and e-commerce. The company's operations are characterized by omnichannel complexity, with each go-to-market channel having its own supply chain configuration and complexities. Despite these challenges, the company is committed to improving its operations and enhancing its supply chain management. Read More
Solution	The company partnered with o9 to address these challenges. o9 provided end-to-end planning capabilities, enabling the company to segment go-to-market channels and demand. This allowed the company to incorporate internal and external drivers of demand and key market trends into o9’s highly differentiated ML forecasting models, thereby limiting excess inventory and stock-out occurrences. o9 also provided a unique capability of a digital twin for all 30,000 SKUs, allowing for constraint supply planning and modeling of all constraints and costs. Furthermore, o9 offered advanced scenario planning capabilities, enabling the company to understand the implications of different demand and supply scenarios. The o9 Enterprise Knowledge Graph was used to move towards driver-based forecasting, supply planning across time horizons, inventory optimization, control tower, and IBP. These capabilities allowed the company to respond faster to changes in the market and reduce the total cost to serve. Read More Log in to view content
Contents

Technology Category

Analytics & Modeling - Digital Twin / Simulation

Functional Applications - Inventory Management Systems

Applicable Industries

E-Commerce

Retail

Applicable Functions

Logistics & Transportation

Sales & Marketing

Use Cases

Demand Planning & Forecasting

Digital Twin

Services

System Integration

Challenge

The customer, a large manufacturer of cigars and traditional pipe tobacco, had grown extensively over the years. This growth led to a scattered IT landscape with fifteen different ERPs and a complex business structure involving different channels such as retail, wholesale, and e-commerce. The company faced challenges with its omnichannel complexity, where each go-to-market channel had its own supply chain configuration and complexities. This led to forecast accuracy issues as the company applied a one-size-fits-all stat forecasting model. Additionally, the company lacked end-to-end visibility across all nodes on their supply chain, leading to an unconstrained supply chain operation. The company also struggled with scenario planning, running its operations based on an inaccurate forecast and an unconstrained supply plan without the ability to run business scenarios and translate that into financial consequences.

About Customer

The customer is a large manufacturer of cigars and traditional pipe tobacco, owning about 200 leading brands. Over the years, the company has grown extensively, leading to a complex IT landscape with fifteen different ERPs and a diverse business structure involving various channels such as retail, wholesale, and e-commerce. The company's operations are characterized by omnichannel complexity, with each go-to-market channel having its own supply chain configuration and complexities. Despite these challenges, the company is committed to improving its operations and enhancing its supply chain management.

Solution

The company partnered with o9 to address these challenges. o9 provided end-to-end planning capabilities, enabling the company to segment go-to-market channels and demand. This allowed the company to incorporate internal and external drivers of demand and key market trends into o9’s highly differentiated ML forecasting models, thereby limiting excess inventory and stock-out occurrences. o9 also provided a unique capability of a digital twin for all 30,000 SKUs, allowing for constraint supply planning and modeling of all constraints and costs. Furthermore, o9 offered advanced scenario planning capabilities, enabling the company to understand the implications of different demand and supply scenarios. The o9 Enterprise Knowledge Graph was used to move towards driver-based forecasting, supply planning across time horizons, inventory optimization, control tower, and IBP. These capabilities allowed the company to respond faster to changes in the market and reduce the total cost to serve.

Impact #1	The implementation of o9's solutions led to significant operational improvements for the company. The company was able to improve its forecasting accuracy by segmenting go-to-market channels and demand, and incorporating internal and external drivers of demand and key market trends into o9’s ML forecasting models. This helped to limit excess inventory and stock-out occurrences, enhancing the efficiency of the supply chain. The use of a digital twin for all SKUs enabled constraint supply planning and modeling of all constraints and costs, providing a more sophisticated approach to supply planning. Additionally, the advanced scenario planning capabilities provided by o9 allowed the company to understand the implications of different demand and supply scenarios, leading to more informed decision-making. The company was also able to replace Forecast Pro, Excel, and homegrown solutions with o9's more advanced and integrated solutions.

Impact #1

The implementation of o9's solutions led to significant operational improvements for the company. The company was able to improve its forecasting accuracy by segmenting go-to-market channels and demand, and incorporating internal and external drivers of demand and key market trends into o9’s ML forecasting models. This helped to limit excess inventory and stock-out occurrences, enhancing the efficiency of the supply chain. The use of a digital twin for all SKUs enabled constraint supply planning and modeling of all constraints and costs, providing a more sophisticated approach to supply planning. Additionally, the advanced scenario planning capabilities provided by o9 allowed the company to understand the implications of different demand and supply scenarios, leading to more informed decision-making. The company was also able to replace Forecast Pro, Excel, and homegrown solutions with o9's more advanced and integrated solutions.

Benefit #1	Faster response to market opportunities, enabling the company to seize new business prospects more efficiently.
Benefit #2	Reduction of lost sales, leading to increased revenue and profitability.
Benefit #3	Reduction of cost through better capacity utilization and planning, resulting in significant cost savings.

Benefit #1

Faster response to market opportunities, enabling the company to seize new business prospects more efficiently.

Benefit #2

Reduction of lost sales, leading to increased revenue and profitability.

Benefit #3

Reduction of cost through better capacity utilization and planning, resulting in significant cost savings.

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Overview

Transforming Supply Chain Management with IoT: A Case Study of a Large Cigar and Tobacco Manufacturer

Operational Impact

Quantitative Benefit