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Strategic Design Pinpoints the Value of TINE’s Supply Chain Organization

Norway's largest producer, distributor and exporter of dairy products, TINE, used supply chain planning strategically to point out the importance of supply chain to the whole of the organization. This generated better results and more trust.

High Variations in Supply and Demand

Every second throughout the year TINE (TINEA SA) produce 40 products, resulting in 3.5 million products daily and 1.3 billion a year.
TINE is owned by 12 000 Norwegian farmers and is Norway’s largest producer, distributor and exporter of dairy products. As a cooperative, TINE is obliged to accept every liter of milk delivered by the farmers. The yearly results lands on 1.4 billion liters of cow’s milk and 19 million liters of goat’s milk but the supply varies highly during seasons due to natural variations.
This puts extra pressure on the supply chain balance as it consists of fresh raw-material but must be based on natural supply instead of demand. To not spoil the milk TINE needs to pick it up fresh at the farms and deliver it in time to the most suitable dairy. The chosen dairy needs both a quantitative capacity of handling the milk, and the ability to make the current demanded products or products more suitable for buffering, such as butter or cheese. Although the complex supply chain and challenging planning, TINE had no more powerful tool than Excel to schedule the upcoming production and logistics, which put a lot of work on production planning.

The supply chain challenges TINE faced
• Difficulties in balancing supply and demand throughout supply chain network, while employing a total cost perspective.
• Difficulties in accounting for constraints: production capacity, storage capacity, aging requirements for products like cheese, and shelf life.
• Limited support for planning across all affected stakeholders in the organization.

Shift of Focus

In order to face the high variations in demand, supply, capacity and inventory constraints, TINE felt the need to improve their long term planning to further improve their strategic work. To make sure that production and distribution matched demand, TINE wanted the planning horizon to cover two years with production and distribution plans eighteen months ahead.
Supported by Optilon, TINE identified six strategic focus areas to optimize.

  • Launch control
  • Inventory modelling
  • Capacity planning
  • Cost to serve
  • Scheduled maintenance
  • S&OP

Optilon’s supply chain design approach could provide a solution to cater for these needs. Based on the focus areas and identified challenges, Optilon recommended Supply Chain Guru from LLamasoft, complemented with Tableau from Tableau Software. The complete solution created a platform for decision support across the company, and highlighted the value of a well aligned supply chain.
Another Action TINE took was STYRKE, an internal program to make sure the change was understood by all of TINE’s employees, while also focusing on integrating strategic planning with operations and tactical planning.
”You have to put your effort in the work if you are expecting good results. That is why our supply chain modeling is very detailed and integrated with our existing technical platform, and why we thoroughly discussed the process and structure of our supply chain team. We are very satisfied with the way things turned out and the way getting there. Optilon has supported us well throughout the whole process, which is why our cooperation has continued for years“, said Egil Sørset Director of Strategic Logistics, TINE

Results

Change of focus gave results as logistics lead-times decreased from weeks of planning to only a few days. Not only did tasks go faster than before, the new way of work improved both efficiency and effectiveness, as the improvements made it possible to shift focus from process to results. This resulted in a much richer support for decision making which in turn increased the demand for supply chain data across the organization. More importantly, the changes pointed out the value and strengthened the influence of TINE’s supply chain organization.

About TINE

TINE is the largest Norwegian dairy product cooperative with daily product deliveries all over Norway. Around 12 000 farmers on 8 500 farms makes the foundation of TINE, and we daily make products in our dairies with passion and love for traditions. We also take responsibility for promoting small-scale production and diversity.

About Optilon

Optilon creates business advantage through solutions based on leading supply chain applications. Optilon takes a holistic approach to planning and optimization for companies within both manufacturing and trade, implementing market leading solutions and processes. Optilon uses its expertise to choose among the leading and most innovative applications on the market.

About Llamasoft and Supply Chain Guru

LLamasoft, Inc. provides software and expertise to help large organizations design and improve their supply chain network operations. LLamasoft Supply Chain Guru is the leading supply chain design and analysis application available on the market today. It enables companies to model, optimize and simulate their supply chain operations, leading to major improvements in cost, service, sustainability and risk mitigation.

About Tableau Software and Tableau

Tableau helps people see and understand data. In 2020, the world will generate 50 times the amount of data as in 2011 and 75 times the number of information sources (IDC, 2011). Within this data are huge, unparalleled opportunities for human advancement. However, to turn opportunities into reality, people need the power of data at their fingertips. Tableau builds software to deliver exactly that.

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