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    SAP Case Study

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    ttuuyen1204
    Chupa Chups traditionally used make-to-order processing but switched to make-to-stock to address wholesalers' quick changing demands, which increased inventory costs. To implement the new model while minimizing downtime, Chupa Chups turned to SAP's mySAP SCM solution, prioritizing demand forecasting which improves production and sales planning through reliable forecasts.

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    SAP Case Study

    Uploaded by

    ttuuyen1204
    19 views2 pages
    Chupa Chups traditionally used make-to-order processing but switched to make-to-stock to address wholesalers' quick changing demands, which increased inventory costs. To implement the new model while minimizing downtime, Chupa Chups turned to SAP's mySAP SCM solution, prioritizing demand forecasting which improves production and sales planning through reliable forecasts.

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    Chupa Chups traditionally used make-to-order processing but switched to make-to-stock to address wholesalers' quick changing demands, which increased inventory costs. To implement the new model while minimizing downtime, Chupa Chups turned to SAP's mySAP SCM solution, prioritizing demand forecasting which improves production and sales planning through reliable forecasts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    19 views2 pages

    SAP Case Study

    Uploaded by

    ttuuyen1204
    Chupa Chups traditionally used make-to-order processing but switched to make-to-stock to address wholesalers' quick changing demands, which increased inventory costs. To implement the new model while minimizing downtime, Chupa Chups turned to SAP's mySAP SCM solution, prioritizing demand forecasting which improves production and sales planning through reliable forecasts.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 2

    Lollipops—with these and related products such as Smint or Crazy Planet—the Spanish

    company Chupa Chups (the world’s largest manufacturer of lollipops), generates close to half a
    billion dollars in revenue each year. Traditionally, the Chupa Chups factories all over the world
    have produced the goods once orders have been placed. This is commonly referred to as make-
    to-order processing. However, as the wholesalers have to react more quickly to changing
    customer demands, the lead times generated by make-to-order processing can be too long;
    therefore, Chupa Chups decided to switch to a make-to-stock system, where goods are
    continually produced and, if necessary, stocked, so that wholesalers can receive their orders
    almost instantaneously. Although this system is good for the wholesalers, it can also lead to
    increased inventory costs for the manufacturers. Therefore, Chupa Chups had to streamline its
    manufacturing processes to keep costs associated with a make-to-stock system low. Thus, care
    had to be taken to forecast customer demand, foresee potential bottlenecks, and integrate
    suppliers.

    To achieve these goals, Chupa Chups turned to SAP’s mySAP SCM solution. One of the
    challenges was to implement the solution while at the same time to minimize downtime in the
    production process; therefore, the different modules had to be prioritized and to be implemented
    at different times. To use a make-to-stock system but still to keep inventories low necessitates
    the use of sophisticated demand-forecasting tools; hence, it was decided to implement this
    module first. Integrated with SAP’s R/3 system, mySAP’s forecasting system can provide highly
    reliable and timely demand forecasts, which enables better production and sales planning.
    Furthermore, by reducing cycle times, Chupa Chups can more effectively market its products;
    thus, the company is able to more efficiently roll out new products or promotions. The planning
    tools help Chupa Chups’ internal supply chain as well as its external supply chain partners,
    which in turn helps to reduce response time to changes in demand. As this part of the
    implementation has already proven to be successful, other modules of mySAP’s SCM solution
    will be implemented after the demand forecasting module has been introduced at all of Chupa
    Chups’ global subsidiaries.

    1. What type of processing did Chupa Chups conventionally use?

     make- to – order processing.

    .2. What problem did Chupa Chups face that made it turn to a Made-to-stock model?

     Chupa chups faces increasing inventory costs.

    3. What is the main challenge with the new model?

     the main challenge is to implement the solution while at the same time to minimize downtime
    in the production process

    4. What solution did Chupa Chups take in order to achieve the new goals?

     SAP’s mySAP SCM solution.


    5. How can the new system improve production and sales planning?

     it can provide highly reliable and timely demand forecasts.

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