Cheese supplier halves waste

A cheese company that supplies retailers, wholesalers and food service companies across the UK with cheese, butter, cream and desserts, has halved waste and saved a significant value in the last year following the implementation of supply chain planning software.

The company

Most of Eurilait’s produce comes from 20 dairies owned by its €6.1bn parent companies Laita and Eurial in France, in addition to specialty cheeses from over 15 trusted suppliers across Europe.

Eurilait delivers daily an assortment of various types of cheeses, in different sizes and weights (each individually cut, packaged and labelled) to a hundred retailer depots across the UK. Around a fifth are delivered directly to retailers from France, with eight outbound lorries a week crossing the Channel.

Some of its better known brands include France’s best-selling goat’s cheese, Soignon, as well as Boursin and Galbani mozzarella, although the majority of sales are from supplying supermarket own-brand platters and assortments for the likes of Sainsbury’s, Waitrose and Asda.

The challenge

Given the varied shelf life and production times for certain types of cheeses and demand fluctuating greatly throughout the year – sales spike up to a thousand percent during the run up to Christmas – Eurilait and its parent companies have equipped themselves with supply chain forecasting software from FuturMaster. The technology helps plan a long time ahead what to produce and when, as well as how to manage the peaks and troughs (of demand and supply) so that the right cheeses hit the shelves at the right time in the right quantities.

Steven Smith, supply chain manager at Eurilait, says that sales for November and December are higher than the rest of the year combined, and that the company has to start planning for peak sales at Christmas up to a year ahead.

“It’s a huge task for production and if you’re not prepared and ready for selling whichever cheese boards or camemberts are most sought-after at Christmas, you’re too late and have probably missed your window.”

From early in September, preparations ramp up a gear, with more seasonal staff being employed and double shifts to start cutting longer-life hard cheeses, like cheddar, to exact size and weight requirements. Depending on cheese ageing and shelf-life – for instance, to coincide with when brie or camemberts (popular for baking at Christmas) reach maturity – production and supply is carefully planned and phased up to a peak in mid-December when up to a hundred employees are required on double shifts preparing every line.

After implementing demand planning software in 2016 for forecasting all its 400 different products, then adding materials planning software across Europe in 2017, since the start of 2018, Eurilait has been able to use the system more fully based on the valuable insights and accumulated data from previous years’ Christmas sales.

“We were reliant on a very rudimentary Excel-based system before, with huge amounts of manual effort and guess work,” says Smith. “Now, we’ve improved our visibility to plan ahead for Christmas and can reduce the risks of over or under-stocking.”

The benefits

Eurilait has massively reduced its levels of waste cheese this year, whilst maintaining high availability service levels to customers. Forecasting accuracy for retail has gone up from 60 to 80 percent. For wholesale and food service – which makes up the other half of its business – where supply tends to be more erratic throughout the year, forecast accuracy has increased from a low of 30-40 percent a few years ago to around 70 percent today. Service levels (accurate deliveries to customers) are now topping 97.5 percent, compared to 94.5 percent in 2015.

“Results just get better and better all the time,” adds Smith.

The French parent companies Eurial and Laita, which process 4.3bn litres of milk every year, can now plan directly with customers like Aldi when to make particular cheeses after Laita went live in 2018 with the software. Eurilait next intends to use the planning tools to manage more promotions with retailers like Lidl in future. It has also recently launched some new lines, such as caramel and chocolate dairy desserts, after monitoring the success and rapid growth of its fast-selling yoghurt tubes.

A report by Deloitte in 2017 about the challenging nature of the dairy industry says that: “Retailers must adapt through better use of technology and data to target customers with tailored offers and ensure that they can match supply and demand in smaller stores through better inventory management.”

In a dairy industry that’s undergone a lot of change over recent years – and faced with problems of managing fresh products with a limited shelf-life – Eurilait has had to do everything it can to tackle issues of minimising waste and making sure that exactly the right number and types of products are manufactured and delivered rapidly to supermarket shelves.