It has implemented FuturMaster software in two phases, which has saved the bakery an estimated £430k ($547.54k) over the past two years.
Being able to forecast what will sell over a fixed time period will set Warburtons apart from most of its competitors, said the company.
Fresh focus on supply chain
Warburtons is the UK’s largest bakery brand, generating sales of £551m ($701.62m) last year.
The firm produces more than two million wax-wrapped loaves, wraps, crumpets, pancakes and bread rolls a day that are delivered fresh to over 18,500 retailers in the UK.
The family business that was founded by Thomas and Ellen Warburton in 1876 has doubled in size over the past decade. As such, it has had to place a major focus on revamping its supply chain to get products onto shelves quickly and efficiently.
According to Ian Bishop, senior commercial forecast manager at Warburtons, given the enormity of the company’s production, increasing the accuracy of its forecasts by 6% is a big advantage.
The company has a team of three planners who manage up to 2,500 forecasts daily. It reports on business volume performance and Key Performance Indicators (KPI’s) to enable more effective business planning.
“We can see exactly how many loaves will be required by every retailer for the next day, week or month,” he said.
Predicting order placements
The FuturMaster software determines what every retailer will typically be ordering in two days’ time, usually over a two-year horizon.
Our daily bread
Warburtons’ cornerstone product is bread, which accounts for around 70% of its sales. Bread makes up over a quarter of the total volume share of the UK’s £2.8bn ($3.57bn) wrapped bakery market.
Warburtons’ bread portfolio ranges from ‘daily’ bread, to gluten-free and high protein options.
The company has introduced a breadalternative range in the past few years, such as pancakes, wraps and potato cakes, which is growing at around 30% per year.
Its low-calorie sandwich alternative, called Thins, now accounts for 4% of total sales. They are baked for 90 seconds before being frozen in under a minute for fast production at its £20m ($25.47m) bakery site in Burnley.
This facility produces 34,000 individual items per hour.
Warburtons currently operates 12 bakeries and 14 depots across the UK.
It has invested more than £400m ($509.34m) in the past 10 years in building new bakeries, refurbishing others and upgrading distribution networks.
According to the specialist, the system then breaks down the total volumes for different products or regions to tailor operations for just-in-time deliveries.
Warburtons commands its own fleet of 900 vans and trucks, and each driver delivers to around 25 stores daily.
Commanding its own fleet allows the company to control its products and quality right up to them appearing on the shelf, it claims.
“What’s baked today is shipped the same night and delivered ready for the supermarket shelves tomorrow,” said Bishop.
Bishop said the forecasting team doesn’t only look at the daily or short term requirement of the retailer.
It is also responsible for managing promotional volumes and measuring the impact of external factors like advertising activity and even the weather.
FuturMaster’s ‘portfolio forecasting’ tool enables the team to project up to five years aheadto see what improvements should be made, and what cash benefits will be derived.
Planning promotions with retailers - often up to a year ahead - is another feature the FuturMaster software offers Warburtons.
“The software allows us to quickly analyze whether a particular promotion is realistic or not, and see any resulting sales uplift,” says Bishop.
He said the company has significantly benefited from time savings - not only across its operations and production processes, but for customers as well.
What used to take national account managers almost a day every month in planning promotions trawling through multiple spreadsheets for each customer now purportedly takes 30 minutes.
Also, “where previously there was a 65% to 35% split on administrative versus added-value tasks, now staff spend 10% of their time on admin and 90% on strategic decision making,” he said.
Bishop said the software has offered significant cost savings for Warburtons, but noted the biggest advantage has been the delivery of optimum freshness, which, in the bakery category, is an essential criterion.