TCHO Achieves Sweet Success With Plex Supply Chain Planning

TCHO’s artisan chocolates encompass a broad range of products and SKUs — everything from chocolate nibs used in baked goods, coffee, beer, and ice cream to specialty bars sold to grocery chains, restaurants, and directly to consumers online. It can take more than a year for TCHO to receive manufacture-ready cacao beans from growers once it places an order, so it needs the ability to plan its supply chain well in advance. Such planning applies not just to sourcing but also to every step from beans to packaged chocolates. To pull this process off, the company had to overcome some key challenges.

Shifting From Reactive to Proactive Planning

The company’s legacy system was inconsistent and unreliable when Janet Poeschl, Senior Vice President of Supply Chain and Innovation, came on board in 2016. "When I first started, they were setting the production schedule only a week or two in advance, which was highly reactive to customer demand."

As a result, the company experienced stockouts and lower service levels, which put customer retention at risk. Poeschl recalls a customer telling her, "If this isn’t improved, we are not buying from you anymore. We love your chocolate, but you can’t guarantee good service." Due to the nature of their product, TCHO also needed to ensure fresh inventory and stay in front of fluctuating demand. Facing pressure both internally and from customers, it was time for change.

There’s been a marked difference since revamping TCHO’s planning processes and implementing Plex Supply Chain Planning (SCP). “Now we don’t have that issue,” Poeschl says. Since making the switch to Plex SCP, the company has reduced critical out-of-stock items fourfold and finished goods’ Days of Supply (DOS) by 63%. For TCHO, being proactive has paid off.

Transforming Productivity with Two-Way NetSuite Data Integration

One capability in particular topped Poeschl’s requirements for a new supply chain planning solution: material requirements planning (MRP). "I needed MRP. I needed the ability to explore the bill of materials so that our purchasing team would know what raw material to buy and when."

The problem was, she couldn’t do that easily with the legacy supply chain planning solution she inherited when she joined the company. "It was not providing good MRP and it was confusing to look at. In addition, it offered only partial integration with NetSuite. It was only one-way," says Poeschl. The solution could receive data from Oracle NetSuite, but it was not capable of generating work orders. Instead, she had to create them manually, which resulted in a time-consuming process.

Using the two-way integration in Plex SCP, Poeschl can now seamlessly pull data from NetSuite and push work orders out to production in one seamless, streamlined process.

"We really needed a good supply chain planning system, so we could execute more effectively on our orders. And what’s great is SCP gives me this in a way that works well with our NetSuite system — I get the best of both," says Poeschl.

Using Precise Planning for Agility

TCHO’s customers range from wholesale distributors to online consumers. To maximize efficiency, the company manufactures chocolate in master cases. While this batched production is efficient, it presents additional challenges downstream. 80% of order lines call for individual units, such as bars and gift boxes – these orders require the master cases to be broken up. Lacking forecasting on their legacy system, this process caused shipping delays and inventory issues.

Thanks to Plex SCP, TCHO has been able to streamline fulfillment of these orders. For example, with the enhanced forecasting precision she gets from SCP, Poeschl can give the warehouse advanced warning when to break into master cases to pull out “eaches” (individual units) to meet upcoming online orders and the 48-hour turnaround they require. Process improvements like these have enabled TCHO to boost on-time shipments by 20%.

Additionally, the precision of Plex SCP ensures the chocolatier doesn’t overstock on certain SKUs. For example, among its many product lines are eight-gram squares. They come in six or seven flavors and in nearly 50 different packaging configurations. Poeschl likes that Plex SCP enables her to fine-tune inventory planning for products like these, which, though limited shelf life, have so much variety.

“I don’t want to plan too far in advance on the eight-gram squares. I don’t want to end up with too many of one product when the demand comes in at the last minute for a different configuration,” says Poeschl. The planning agility Plex SCP provides is one of the key reasons why TCHO has been able to increase production by more than 50% while maintaining or exceeding a 98.5% service level.

Making Better Decisions with Visibility and Insight

Poeschl says that the enhanced visibility she gets from Plex SCP reveals insight into her supply chain that helps her make better decisions about TCHO’s product portfolio.

For example, during a recent demand review, she noticed that the inventory within a particular product family was not depleting as expected. She checked with her sales team, who had no information on the slowdown. Sensing something was up, Poeschl canceled planned production.

“Then we got notification from a customer that they were discontinuing three SKUs related to that product family,” Poeschl says. “We were able to make a timely decision and cancel production on those products because of what I saw in SCP. That was visibility I did not have previously.”

Before Plex, we were siloed and unconnected. We were managing everything appropriately, but we were paper-based and doing lots of documentation rework. After Plex, many of those pain points are gone, there’s less paperwork, and we can realize revenue quicker.

We have access to a vast amount of data and can catch errors much quicker than we had in the past.

Robert Vaccaro

Technical Services Manager

Tech Met Inc.