{"63017":{"#nid":"63017","#data":{"type":"news","title":"Executive Master\u0027s Program Helps Find the Right Balance at MercaSID","body":[{"value":"\u003Cp\u003EIn\nthese difficult economic times, any innovation that aims to improve a company\u2019s\nefficiency while saving money is bound to\nbe given serious consideration. At MercaSID S.A., a seventy-three-year-old food\nproducts company based in\nSanto Domingo, Dominican Republic, Emile Simon\u2019s approach to inventory\nmanagement is proving right on\ntarget.\u003C\/p\u003E\u003Cp\u003ESimon, a logistics manager at MercaSID, is a 2009 graduate of Georgia\nTech\u2019s Executive Master\u2019s in International Logistics \u0026amp; Supply Chain\nStrategy program (EMIL-SCS). The eighteen-month,\nresidence-based program prepares executives to manage a multitude of global\nlogistics and supply chain\nissues. Working either individually or as a team, EMILSCS participants develop\na solution to a real-world\nproblem instead of writing the traditional master\u2019s thesis. Simon chose to\nfocus on a new approach to the product demand\nplanning process as a means of achieving inventory reduction.\u003C\/p\u003E\n\n\n\n\n\n\n\n\u003Cp\u003EA producer of cooking\noils and other agricultural-based products, MercaSID is also a major Caribbean\ndistributor for\nconsumer-product giants, including Unilever, Kimberly-Clark, Kellogg, and Clorox.\nIts inventory is massive\u2014too much so, Simon thought\u2014resulting not only in\nexcessive financial and warehousing costs, but also in less-than-optimal customer\nservice.\u003C\/p\u003E\n\n\n\n\n\n\u003Cp\u003EThe key is to\nstrike a closer balance between demand and inventory while maintaining as high\nan order fill rate as possible.\u003C\/p\u003E\n\n\n\n\n\n\n\n\n\n\n\n\u003Cp\u003E\u201cWe\nneeded to understand the demand side better,\u201d said Simon. \u201cWe had a lot of the\nright information, but we weren\u2019t using it properly.\u201d\u003C\/p\u003E\u003Cp\u003EHis approach is\ncomprised of two parts. The first involves data collection\u2014basic number\ncrunching\u2014to come up with the projected demand for each product category, and\nthen determine demand estimates for individual products. That information subsequently\nundergoes a value assessment by representatives of the company\u2019s sales,\nmarketing, and operations departments.\u003C\/p\u003E\n\n\n\n\n\n\u003Cp\u003EThe group arrives\nat a consensus on final product forecasts, which are used to determine the\nnumber of any given item to be\nmaintained in inventory. This final number does not necessarily match the\nanalytical forecast provided by a computer\nprogram, because it takes into account factors including market information,\nmarket situation, and the company\u2019s marketing plans.\u003C\/p\u003E\u003Cp\u003E \u201cThis process has\nhelped us streamline our inventories and improve our service levels as well,\u201dSimon noted.\u003C\/p\u003E\n\n\n\n\n\n\n\n\n\n\u003Cp\u003EThe results so far\nare impressive. While maintaining or exceeding a 90 percent fill rate level\nacross all product categories,\ninventory was reduced 15 percent last year and an additional 5 percent in the\nfirst half of 2010. Further reductions\nare likely when MercaSID\u2019s suppliers are brought fully into the planning\nprocess, probably next year, Simon\nsaid.\u003C\/p\u003E\n\n\n\n\u003Cp\u003E\u0026nbsp;\u201cWe did get some\nsupplier collaboration in the first phases of this new process, but we know we\ncan take it further,\u201d he said. \u201cThat\u2019s going to be a little more difficult\nbecause it involves the participation and buy-in of other companies, not just\nourselves.\u201d Simon expects MercaSID\u2019s finance department to become more active\nin the process as it evolves.\u003C\/p\u003E\n\n\n\n\n\n\n\n\n\n\n\n\n\n\u003Cp\u003EBuy-in within\nMercaSID itself was also crucial for the project\u2019s success, Simon added,\npointing out that many people have to believe in the process for it to work.\n\u201cIt has taken discipline, but we did a lot of consensus building about how the\nprocess should take place,\u201d he explained. \u201cAfter we proposed something, we\ndidn\u2019t take it to the next level until all sides of the team\u2014marketing,\nsales\u2014were in agreement that that\u2019s the way we should go.\u003C\/p\u003E\n\n\n\n\n\n\n\n\n\n\u003Cp\u003E \u201cWe\u2019ve had a\nthousand percent support from the highest levels of the company, and that\u2019s\nmade a lot of difference too,\u201d he\nadded.\u003C\/p\u003E\u003Cp\u003ESimon\u2019s experience\nis not uncommon among EMIL-SCS graduates. \u201cIt\u2019s the only program of its kind,\u201d\nsaid Greg Andrews,\nmanaging director of the EMIL-SCS program. Students, typically sponsored by\ntheir employers, participate in five\ntwo-week semesters spread out over eighteen months. The first semester is an \u201cacademic boot camp\u201d held at Tech, where students\nare exposed to the \u201cconcepts of industrial engineering as applied to supply\nchains,\u201d Andrews said. Subsequent semesters are spent traveling to countries in\nEurope, Asia, and the Americas for a combination of academic study, practical\napplication, and real-world problem solving.\u003C\/p\u003E\n\n\n\n\u003Cp\u003E\u201cThe 2009 class\nthat Emile Simon is a part of had seven global projects with a combined savings\nof about $250 million if\nimplemented,\u201d Andrews continued. \u201cThat\u2019s a pretty good payback.\u201d\u003C\/p\u003E\n\n\n\n\n\n\n\n\u003Cp\u003EIn a fast-moving\nconsumer goods company, finding the right balance between customer service and\nthe cost of doing business\nmakes the difference between success and failure, noted Renato Cantarelli,\nMercaSID\u2019s vice president of\noperations. \u201cKey to achieving this balance is to have a robust yet simple\ndemand planning process where sales, marketing, procurement, manufacturing, and\ndistribution are integrated, along with a consolidated operational plan. This was\nEmile\u2019s project\u2014to conceptualize and implement our demand planning process.\nNow, after more than one year in operation, this process is fully operational\nand is well accepted by all levels of our organization. Furthermore, it is\ndelivering the benefits we expected from the outset.\u003C\/p\u003E\n\n\n\n\n\n\n\n\u003Cp\u003E\u0026nbsp;\u201cThe knowledge Emile\nbrought with him from his experience at Georgia Tech was fundamental for him to successfully finish\nhis project and for the business to accrue the benefits. It was money and time\nwell spent\u2014we are very happy!\u201d\u003C\/p\u003E\n\n\n\n\u003Cp\u003E\u003Cem\u003EGary\nGoettling is a freelance writer who writes\u003C\/em\u003E \u003Cem\u003Efor\nGeorgia Tech\u2019s \u003C\/em\u003EResearch Horizons \u003Cem\u003Eand other\u003C\/em\u003E \u003Cem\u003Ealumni\npublications.\u003C\/em\u003E\u003C\/p\u003E","summary":null,"format":"limited_html"}],"field_subtitle":"","field_summary":"","field_summary_sentence":[{"value":"Executive Master\u2019s Program Helps Find the Right Balance at MercaSID"}],"uid":"27328","created_gmt":"2010-12-01 16:59:45","changed_gmt":"2016-10-08 03:07:50","author":"Edie Cohen","boilerplate_text":"","field_publication":"","field_article_url":"","dateline":{"date":"2010-11-01T00:00:00-04:00","iso_date":"2010-11-01T00:00:00-04:00","tz":"America\/New_York"},"extras":[],"hg_media":{"63040":{"id":"63040","type":"image","title":"Emile Simon","body":null,"created":"1449176409","gmt_created":"2015-12-03 21:00:09","changed":"1475894552","gmt_changed":"2016-10-08 02:42:32","alt":"Emile Simon","file":{"fid":"191713","name":"Emile2.jpg","image_path":"\/sites\/default\/files\/images\/Emile2_0.jpg","image_full_path":"http:\/\/www.tlwarc.hg.gatech.edu\/\/sites\/default\/files\/images\/Emile2_0.jpg","mime":"image\/jpeg","size":882983,"path_740":"http:\/\/www.tlwarc.hg.gatech.edu\/sites\/default\/files\/styles\/740xx_scale\/public\/images\/Emile2_0.jpg?itok=xarKOh5T"}}},"media_ids":["63040"],"groups":[{"id":"1242","name":"School of Industrial and Systems Engineering (ISYE)"}],"categories":[{"id":"134","name":"Student and Faculty"}],"keywords":[{"id":"7861","name":"EMIL-SCS"},{"id":"11397","name":"Emile Simon"},{"id":"109","name":"Georgia Tech"},{"id":"426","name":"isye"}],"core_research_areas":[],"news_room_topics":[],"event_categories":[],"invited_audience":[],"affiliations":[],"classification":[],"areas_of_expertise":[],"news_and_recent_appearances":[],"phone":[],"contact":[{"value":"\u003Cp\u003E\u003Ca href=\u0022mailto:barbara.christopher@isye.gatech.edu\u0022\u003E\u003Cstrong\u003EBarbara \nChristopher\u003C\/strong\u003E\u003C\/a\u003E\u003Cbr \/\u003EIndustrial and Systems Engineering\u003Cbr \/\u003E\u003Cstrong\u003E404.385.3102\u003C\/strong\u003E\u003C\/p\u003E","format":"limited_html"}],"email":[],"slides":[],"orientation":[],"userdata":""}}}