British Telecom Supply Chain Challenge

Using O8’s demand-driven planning solution, BT managed to break the dependency between the forecast and supply. The service level was 99%+ while the inventory was reduced by 20-30%.

British Telecom, a multinational telecommunications service company, wanted to achieve lower inventories and at the same time improve service levels. BT’s biggest challenge was to improve the accuracy of their demand forecast in order to achieve the former. The company implemented various methods which improved governance and control but did not deliver the expected benefits for inventory performance and service levels.

They found out that there is a different way with O8.

The Project

BT has adopted a demand driven approach for everything from delivering home broadband equipment and set top boxes, to parts for engineers. The company wanted a solution which would achieve the main aim of driving replenishment and inventory plans from real demand – rather than concentrating on forecast.
BT recognized that in order to achieve lower inventories and improved service improving the accuracy of their demand forecast was becoming ever more complex and expensive whilst showing no sign of delivering benefit. So the challenge was to find a different way to deliver the required result.

O8’s demand-driven supply planning solution was ‘the different way’ allowing de-risking the supply chain from forecast error and utilizing real demand to drive replenishment decisions.

BT selected O8 to partner with to deliver the change and process required. The decision was taken based on O8’s deep experience, proven as the only Demand Driven Planning compliant software solution able to support a complex extended enterprise with a set of planning tools to support the business end to end. O8’s cloud-based solution allowed quick deployment with O8 implementation consultants working in partnership with consultants SmartChain International.

Benefits

• Supply chain ‘de-risked’ from forecast accuracy through breaking the dependency between the forecast and the supply plan.
• Release of supply chain capacity by not producing, buying and storing the wrong stuff.
• Cost reduction through lower planning effort with improved outcomes and lower expedite costs.

BT rapidly saw the required results and achieved a dramatic change in planner productivity in a matter of months. The intuitive O8 solution was key to enable the process change and to get the planning team using the new methodology.

Testimonial

Their approach and solution was designed by supply chain people for supply chain people.

Brian Dooley, Senior Supply Chain Planning Manager

Brian Dooley is an experienced supply chain professional and demand driven practitioner with both a consulting and operational background. This unique combination allows him to leverage his consulting skills and knowledge of best practice with the pragmatic realities of the real operational world.
As a head of supply chain planning at BT he created a demand driven operating model and successfully implemented O8’s demand-driven supply planning solution. All while changing management of a significant transformation program.

Results

Over 147,000 individual Demand Driven Planning buffers are managed with O8 with these results.

• Supply chain ‘de-risked’ from forecast accuracy
• Overall inventory reduction between 20%-30%
• Maintained or improved service levels at 99%+
• Plan changes reduced to almost zero
• Strong positive impact on cash flow and ROCE
• Planning effort substantially reduced
• Initiated the change to a simple and robust DD S&OP process

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