The name Nespresso conjures images of rounded coffee capsules and luxury brewing machines for caffeine lovers worldwide. But there’s much more than expert coffee roasting and craftsmanship behind this iconic company’s success.

Nespresso’s complex coffee supply chain

It’s no simple task providing customers access to the full range of capsules and coffee machines on all sales channels, across more than 70 boutiques in Italy, while optimizing inventory levels.

Nespresso addressed this challenge by digitizing its end-to-end supply chain – from demand forecasts to order deliveries to points-of-sale—thanks to ToolsGroup’s digital supply chain planning platform.

Using ToolsGroup, the coffee brand keeps inventory levels of capsules and machines to a minimum and improves customer service by ensuring product availability within all sales channels. An interview with Simone Zaffuto, Supply Chain Manager at Nespresso Italia published in Digital360, gives an insider view of the company’s supply chain success.

What drove Nespresso’s supply chain planning project?

We live in an increasingly dynamic and fast-paced business environment, driving organizations like Nespresso to seek innovative solutions that can simplify transactions and reduce inefficiencies throughout the value chain. We have always valued continuous improvement, and in the field of supply chain, we felt the need for a tool that can support the demand and supply function to guarantee our customers an exceptional level of service.

ToolsGroup has allowed us to significantly increase end-to-end control of the replenishment process of our retail network. Supply chain optimization allows us to guarantee product availability for our boutique shoppers.

What critical issues have you addressed with this solution?

Predicting retail consumer demand has become much more complex.  By using daily forecasts and replenishment constraints such as storage capacity, safety stock, stock, lead time, etc., ToolsGroup simplifies the task of creating orders for individual points of sale and monitoring inventory levels.

In addition, a real-time alerting system tells us if and where there is an out-of-stock risk, allowing us to take immediate corrective action. This is one of the most important benefits in helping us meet our customers’ expectations.

Which planning technologies were adopted?

We implemented demand forecasting and planning, inventory optimization and replenishment software to allow better monitoring of all internal and external variables across the supply chain, from demand modeling to the sizing of replenishment orders to points of sale.

Which tasks have been automated and what are the benefits?

We’ve been able to automate various planning activities, yielding greater efficiency and better results, from the integration of data input databases to order proposals, to the task of preparing sales forecasts.

AI automation offers many advantages:

  • Increased forecasting accuracy
  • Fewer stock shortages and reduced obsolete inventory
  • Optimized transport
  • Increased operational efficiency at all stages of the supply chain
  • Increased responsiveness for immediate corrective actions
  • Reduced risk of human error

How does the Nespresso team interact with the planning system?

The Demand and Supply team has been reinvigorated by the benefits the tool brings us: employee involvement, improved planner productivity and efficiency, and smoother, connected information flows. Those particularly involved are the Supply Planners who use ToolsGroup software daily.

What impact does the solution have on the omnichannel customer experience?

An accurate sales forecast and a streamlined supply chain allow fully optimized inventory levels, ensuring product availability within all Nespresso sales channels. One element that distinguishes us is a strong focus on omnichannel, allowing us to guarantee service to customers, including affordable e-commerce purchase options on the www.nespresso.com website, on the Nespresso app, and through our Customer Service.

Offering exceptional service to the sales network also allows our Boutique personnel to meet customer needs and offer a heightened experience by showcasing the quality of our coffees.

Did You Know?

Only 45% of companies have high confidence in their forecast accuracy¹

Download your free guide → 5 Critical Demand Forecasting Strategies You Can’t Afford to Ignore

(¹) https://www.gartner.com/en/newsroom/press-releases/2020-02-12-gartner-says-less-than-50–of-sales-leaders-and-selle

The source of this article is from ToolsGroup