In today’s rapidly evolving global market, the margins for error are razor-thin and the need for precision is paramount. For Brandt Group, a Franco-Algerian home appliances manufacturer, optimizing its supply chain is not just a goal but a necessity to stay competitive. By integrating advanced demand and supply chain management software from FuturMaster, Brandt has significantly reduced costs and excess stock by up to a third, providing a valuable case study of operational enhancements. This digital transformation allowed Brandt to refine its logistics, minimize delays, and respond more effectively to market demands.
Company Overview and Context
Brandt Group is renowned for designing and manufacturing a wide range of home appliances, including washing machines, cooking equipment, and cooling devices. These products are marketed globally under various brands such as De Dietrich and Brandt, which are internationally recognized, while Sauter and Vedette are more prominent within France. The company operates four factories – two in France and two in Algeria – and maintains three warehouses worldwide. With revenues of €450 million in 2017, Brandt has significant ambitions, aiming to double its revenue by increasing production, launching new product lines, and exploring new markets in the Middle East and North Africa.
Since its acquisition by the $4 billion Algerian industrial conglomerate Cevital in 2014, Brandt has prioritized enhancing its global supply chain efficiency. One of the critical steps in this direction was a significant investment of €500 million into a new 110-hectare production facility in Algeria, which is now the largest of its kind in Africa. This strategic move not only shifted a substantial portion of production closer to the key markets of Europe and Africa but also reduced the company’s reliance on Chinese manufacturing. As a direct result, Brandt managed to cut down lead times remarkably, decreasing from three months to just two weeks for parts and finished goods deliveries.
Challenges in Supply Chain Management
Brandt faces several challenges, including managing the rapid pace of production where a washing machine comes off the production line every 12 seconds. Each machine requires an average of 300 parts, some of which take around 22 weeks to be ready, necessitating meticulous advance planning. The complexity of this task is further compounded by the need to adhere to ‘just-in-time’ production principles, ensuring that parts are available precisely when needed without overstocking. Achieving this delicate balance requires precise optimization to prevent production stoppages due to missing parts, which can be highly costly.
In addition to the intricate logistics of managing thousands of parts, Brandt must address the challenge of accurately predicting the demand for roughly 2,000 individual product types. The company plans to expand its product ranges significantly, particularly for fridges, freezers, and air conditioning units. Successfully timing the production and distribution of these goods to meet market demand is crucial. Brandt’s ambitious goal of ramping up annual production in Algeria to five million large appliances by 2020 posed an additional layer of difficulty, necessitating a robust and accurate forecasting system to manage such a vast operation efficiently.
Implemented Solutions
In 2017, Brandt took a significant step towards addressing these challenges by integrating FuturMaster’s demand management software, aiming to improve sales forecasts. This move was followed later that year by the adoption of FuturMaster’s distribution planning solution, which was designed to optimize stock levels and manage global distribution more efficiently. As part of a comprehensive modernization strategy, Brandt also transitioned its enterprise systems from Sage to SAP, streamlining operations and enhancing overall efficiency. In September 2018, Brandt launched FuturMaster’s production planning software, specifically targeting the synchronization of industrial supply chain processes and capacity planning at the new Algerian factory.
By adopting these advanced solutions, Brandt aims to create a cohesive and efficient operational system. The company expects to eliminate production stoppages due to missing or delayed parts, a problem that used to disrupt operations for four or five days each month. Improved forecasting and planning capabilities allow Brandt to predict demand more accurately and schedule production in a manner that minimizes disruptions and maximizes efficiency. The transition to SAP enterprise systems has also facilitated more seamless operations, ensuring all departments are aligned and working towards common goals.
Benefits of Software Integration
The integration of FuturMaster’s advanced software solutions has brought about significant improvements across various aspects of Brandt’s operations. One of the most notable benefits is the elimination of production stoppages due to missing or delayed parts, which had been a substantial cost burden. Better forecasting and planning capabilities have enabled Brandt to prevent these costly disruptions, ensuring that production runs smoothly without interruptions. The reduction in production stoppages has translated into considerable cost savings and increased efficiency, allowing Brandt to utilize its resources more effectively.
The savings in cost and time from reducing reliance on Chinese suppliers have been substantial. By producing and controlling more components in Algeria, Brandt has been able to diversify shipments to meet the specific needs of retailers worldwide. This approach has eliminated the need to ship in bulk and store large consignments, further optimizing the supply chain. Shipping costs from Algeria are about fifteen times lower than from China, and transit times are reduced by twenty days, providing additional cost and time savings. The company has also been able to reduce reserve stock from three months to just twenty-one days, significantly improving inventory management.
Marked improvements in service levels to retailers have also been achieved, with on-time deliveries rising dramatically from around 40% to an impressive 95%. Brandt’s synchronization across various departments, including marketing, sales, and production, has fostered long-term visibility for ordering and production aligned with global demand. This integrated approach ensures that all parts of the organization are working together seamlessly to meet market needs. As a result, Brandt’s subsidiaries in France, Algeria, Morocco, Tunisia, Spain, Malaysia, and Singapore benefit collectively from enhanced coordination and efficiency.
Synchronization and Future Prospects
Brandt plans to enhance its operational coordination further by employing FuturMaster’s Sales & Operations Planning (S&OP) tool to align information and reporting across its entities. This tool is expected to facilitate greater synchronization between different departments, ensuring that all parts of the organization are working with the same information and towards the same goals. With a more coordinated approach, Brandt aims to improve its overall efficiency and responsiveness to market changes. The company also has ambitions to launch around two new products annually, continually expanding its product range.
To support new product launches and enhance collaboration with retailers, Brandt is considering the adoption of FuturMaster’s promotional planning tool. This tool would facilitate closer collaboration with retailers in developing effective marketing strategies and promotions, ensuring that new products are well-received by consumers. By working closely with retailers, Brandt can better understand market trends and consumer preferences, allowing for more targeted and effective marketing efforts. The company’s integrated approach to supply chain management, supported by advanced software solutions, will play a crucial role in achieving its ambitious growth targets.
Conclusion
In today’s fast-paced global market, margins for error are extremely slim, and precision is crucial. For Brandt Group, a Franco-Algerian home appliances manufacturer, optimizing the supply chain is essential for maintaining competitiveness. To achieve this, Brandt integrated advanced demand and supply chain management software from FuturMaster. This strategic move allowed Brandt to cut costs and reduce excess inventory by up to 33%, making it a notable case study in operational improvement. The digital transformation enabled Brandt to enhance its logistics processes, substantially reduce delays, and better respond to fluctuating market demands. This integration has proven invaluable in maintaining a competitive edge by streamlining operations and improving efficiency. The real-time data provided by FuturMaster’s software allows for more accurate forecasting and demand planning, reducing the risk of overstocking or stockouts. Brandt’s ability to adapt swiftly to market changes and optimize supply chain functions underscores the importance of technological advancements in today’s business landscape.
