Constraints on Sun-sweet Growers supply chain
Sun-sweet Growers is one of the largest handlers of dried tree fruits with daily estimated volume of 40,000 tons of dried cranberries, apricots, pineapples, and many other fruits. The major constraints on Sun-sweet supply chain is lack of control on both demand and supply chain factors. For example, the company can’t control its agricultural supply because it is based on weather conditions, harvesting season and growers’ interests in particular fruits. Similarly, the demand side is determined by market forces such as importers, customers and government policies. Another supply constraint for the company is that the fruits could be sourced from only 400 growers in a particular region so there are yearly output variations. The demand constraint is that the market for dry fruits is mostly seasonal and especially mounts during holidays; therefore, the company hires part-time workers to facilitate in supply chain operations.
Problems at Sun-sweet Growers and Their Business Impact
The lack of control on supply side creates the major problem in forecasting dried fruit output that in turns negatively affects company’s strategic commitment in meeting expectations of existing buyers and expanding in new markets. Therefore, the Sun-sweet can’t achieve the status of an exclusive dried fruits supplier for existing clients because its supply chain constraints compel buyers to keep an alternate option. Secondly, the peak demand during holiday seasons further complicates planning process, packaging (several varieties in 20 different languages) and meeting distribution deadlines of local and international fruit merchants.
Benefits of S&OP Software on Supply Chain of Sun-sweet Growers
The implementation of S&OP software replaced the excel spreadsheet system and benefited Sun-sweet Growers specifically in five major areas such as Demand Visibility, Demand Planning, Inventory Planning, Supply Planning and Finite Scheduling. The most important advantage of S&OP was increasing cross-functional communication, coordination and collaboration on unified business goals instead of following deviated objectives that were design in monthly meetings. For instance, S&OP enhanced the Demand Visibility at Sun-sweet by enabling managers to create updated statistical forecasts, design pricing and promotional strategies after an extensive analysis of dried fruit demand. Secondly, the Demand Planning function improved the balance between operational planning and sales forecasts, thereby reducing operational costs. Third, the inventory planning applications provided comparative analysis of historical data and trends besides keeping updating records of existing inventory. The inventory analysis also benefited in using an email warning system to resolve inventory shortages and order delivery issues. Fourth, S&OP specifically facilitated in supply planning through implementation of uniform labor force and yearly production schedule instead of seasonal production method. Finally, the finite scheduling improved the supply chain by minimizing number of production lines and packaging line changeovers, material shortage, fruit sizing and sorting issues, overtime and downtime issues. Resultantly, the Sun-sweet Growers achieved a significant efficiency gains and reductions in supply chain costs pertaining to warehousing, packaging, rejection and distribution.
Additional Ways to Ease Sun-sweet Growers Supply Chain Concerns
The additional way for Sun-sweet Growers to resolve its supply chain concerns is to add a new region with new growers so that Sun-sweet does not remain restricted to fruit harvest of existing 400 growers. The global demand will increase because of increase in middle class population in several European and Asian markets; therefore, the company should develop an alternate area for sourcing fruits and materials.