Dannon: VMI Case Study

Picture this… you produce and sell six million cups of yogurt a day in almost 100 flavours, styles and sizes. As the top-selling brand of yogurt worldwide, your products are sold under the names Dannon and Danone and you pride yourself on consistently delivering high-quality, wholesome products, and responding to consumer needs with nutritious, innovative new products and flavours. As part of your “Customer First” program focused on continually strengthening customer relationships, you have established a vision of being your customer’s ‘yogurt supply chain expert’.

But, you don’t have the tools in place to meet the goals of the program. Vendor Managed Inventory (VMI) was identified as a key enabler as it would allow you to use customer data to manage warehouse replenishment, which in turn enables you to better influence store and shelf replenishment. Although you already have a VMI program in place you recognised that the program as it currently stood was narrowly focused and was only implemented with a limited number of high-volume retail partners.

So, you recognise that you need to re-think the program in the broader “Customer First” context and look at the benefits VMI could deliver beyond just transaction processing and supply chain metrics. After a detailed evaluation, you select TrueCommerce as your new generation VMI platform. Our solution automates the majority of your planning effort. Since analysts need only review and confirm replenishment orders calculated by TrueCommerce, you can handle much more VMI volume per analyst. The cost of the service is also absorbed by avoiding the need to add numerous new analysts

Now, you’re realising the kind of results that you set out to achieve. All existing VMI partners were transitioned onto our platform within a few months. Your number of VMI partners has increased to over 20+ locations with more in process. And what’s more, excellent inventory management performance has been maintained at an average of approximately 60 turns and 97% service levels for locations under VMI control for 6 months or more.