Case Study

Amore Pacific 2018-04-19T20:14:21+00:00

Business Challenge

Established in September 1945, AmorePacific Corp has provided global customers with a total package of beauty and health solutions through 30 brands spanning beauty, household, and healthcare products. AmorePacific operates their own cutting-edge R&D centers and product distribution facilities.

Over the last 20 years, the company implemented several MRP / ERPbased solutions designed to improve weekly cycle product planning and synchronize demand planning. Even with the addition of new technology, AmorePacific was experiencing several supply chain management issues, including:

  • Sales Forecast Accuracy – The long term accuracy of the MRP/ERP forecast was not reliable (< 10% accurate). The purchasing team
    could not depend on the sales forecast and only used it for reference purposes.
  • Workarounds – The purchasing team attempted to reduce lead time because short term forecast accuracy was more reliable.

Solution

Implementing Replenishment+® from Demand Driven Technologies and using Demand Driven MRP (DDMRP) buffer positioning logic, AmorePacific embarked on a multistep initiative to address their supply chain management issues.

First, AmorePacific added buffering logic at their work centers and warehouse facilities in order to reduce the finished goods lead time.

Next, buffer profiles were setup in the plant for all raw material products – approximately 1,500 items, including items with long lead time packing materials.

Finally, the company used dynamic buffer management to adjust lead times automatically in order to address Chinese New Year. By adjusting the lead time on items supplied from China shortage and stock outs were significantly reduced.

Overall Results with Replenishment+

Packing Materials
Service Level
Imported Packing Materials
Service Level
Raw Materials Inventory
Raw Materials Order Management

60%-90%

Purchasing Response Rate

99%

20%

30%