How Fox’s Biscuits utilised FuturMaster to optimise its supply chain

By Dale Benton
The £250m UK biscuit company Fox’s Biscuits, has improved its forecasting, manufacturing and promotions planning practices following the implementati...

The £250m UK biscuit company Fox’s Biscuits, has improved its forecasting, manufacturing and promotions planning practices following the implementation of new supply chain technology from specialist vendor FuturMaster.

Using the software, the manufacturer has boosted its service levels and can now manage up to 150 deliveries a week to retailers including Tesco, M&S and Aldi, while customer service levels have increased from 96 percent to 99 percent on over 30 million cases sold each year.

From crumble beginnings…

Since its inception Fox’s has made around 1,450 billion biscuits from its three manufacturing bakeries across the UK. Hugely successful, Fox’s Biscuits are also exported to Europe, North America and the Far East. Since 2011, Fox’s has been part of the 2 Sisters Food Group, the UK’s third leading food manufacturer.

Fox’s produces close to 25,000 tonnes of biscuits every year, with the average weekly production at one of the company’s centres around 1,000 tonnes or 50,000 tonnes per annum. The Rocky biscuit range, arguably one of Fox’s most recognisable biscuits, comes from one facility that produces 1,700 chocolate biscuit bars per minute, equating to over 10 million per week.

Overall, Fox’s makes around 400 million packets of biscuits a year and relies on FuturMaster’s forecasting technology for more accurately planning production needs and managing peaks and troughs throughout the year.

FuturMaster works closely with other major UK retailers, as well as many abroad, to plan weekly requirements so that shelves remain fully stocked with the best selling ranges.

A Rocky road ahead…

With such a varied product range, the challenge for demand and supply planning is inescapbale. On the demand side, there are over 350 branded and own-label products, with many promotional and seasonal lines.  These products are distributed through a number of trade channels including export and independent distributors and all UK retailers.

On the supply side, a high proportion of the volume is made up of seasonal (Christmas) assortment tins and packets. These have up to 20 different biscuits inside, so you can imagine the issues that come with such a varied collection.

Prior to FuturMaster there was poor demand visibility from a time-consuming forecasting process. The planning process took the best part of a month to complete due to the multiple iterations and assumptions within the spreadsheets. This was viewed as a significant business risk.

Planning promotions (with retailers) has also become an important part of the day-to-day business. FuturMaster’s software helps evaluate the impact of, say, running a two-for-one offer by determining what would be the resulting sales uplift and the extra volumes that need producing. It also shows when would be a good time to do these promotions based on analysing production line requirements and demand.

“It’s crucial for us to produce exactly the right volumes and get sell-through with retailers,” said Bill Dales, Demand Planning Controller at Fox’s. “The demand planning software predicts what’s needed in terms of sales units to shift for the coming days, months or year. This helps us plan ahead and make sure we can deliver on what’s promised.”

Given limited storage capacity and the perishable nature of foodstuffs, the company clearly doesn’t want to produce too much too soon, so relies on data to help manage the production line as well. For example, to meet increased demand on certain types of chocolate biscuits, Fox’s might need to split production between different machines and run for an extra eight hours before cleaning and switching to other ingredients. It can also use the data to see if it meets its human resources needs and to plan the buying of raw materials.

Most retailers now share forecasts on a daily basis. A team of eight people at Fox’s use FuturMaster as a process tool and for trend analysis. They can then fine-tune weekly booking forecasts, using retailers’ Epos data to go back two to three years to work out what sells, at what price, and so on. These forecasts are used for procurement purposes and to set budgets for purchasing and labour requirements up to two years ahead. With around 3,500 live forecasts to deal with each week, FuturMaster’s production and inventory management tool ensures the process is optimised.

The Futur is now…

The role of the central demand planning team has changed from one of administration to one of being a strategically important function to the business. For production planning, the process has moved from being a process taking many days to one in which a new plan can be created within 90 minutes of a new forecast being available.

Since deploying the FuturMaster software, forecast accuracy (measured as the Mean Absolute Percent Error, or MAPE) has improved from 48 percent to 74 percent, customer service levels have improved by 3 percent, while the number of products experiencing service issues (defined by a shortage above 10 cases in any month) has fallen by 65 percent.

“Before, around a fifth of products had service level issues. Now it’s down to just five percent a month,” said Dales.

Whilst boosting supply and maintaining service levels to retailers at an impressive 99 percent, Fox’s has also managed to bring down working capital and reduce costs for the business. Wastage has been minimised and storage costs kept down. With a shelf life of around 40 weeks typically for its biscuits, Fox’s has reduced its average stock holding to just two to three weeks.

“Over the last few years stock has moved to the right place to ensure a streamlined supply chain,” concluded Dales. “And thanks to significantly improving the accuracy of our forecasts, we’re now able to maintain ideal safety stocks and we’re running on an optimum level right now.”


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