Circle K fuels a better forecast
Global convenience store chain drives an accurate global forecast with Connected Planning.
Before Anaplan, Circle K managed its supply and demand planning in a disjointed combination of spreadsheets and enterprise resource planning (ERP) systems. This led to inaccurate forecasting, an unstructured approach to information gathering, and conflicting demand forecasts.
“One of my objectives has been to try to connect the dots in the supply chain,” recalls Magnus Tagtstrom, Senior Director of Supply Chain Optimization. “I think we had good solutions, but people were doing forecasting in silos, so I wanted to connect that planning process end to end.”
Tagtstrom and his team built a connected approach to demand and supply planning with Anaplan for Supply Chain. Implemented together with Anaplan partner Executit (now part of Anaplan Gold Partner Vuealta), the solution enables the team to accurately predict supply and demand down to the individual-station level across Europe. Using intuitive forecasting and scenario-based planning, the planning teams at Circle K now have a dynamic capacity forecast per product and station so they know exactly where and when to send fuel.
The key result is an accurate and dynamic 18-month rolling forecast of current and future stock levels for its European locations. Tagtstrom says, “One of the clear benefits that I see is the forecast accuracy—this has helped us have the right stock level throughout all our sites. That’s money that we have as a buffer in the supply chain now.”
With an accurate view of capacity needs, Circle K can save money by reducing inventory and using resources more efficiently. “We have full visibility of our current inventory levels, as well as forward-looking inventory levels,” Tagtstrom explains. “With Anaplan, we know how much we will sell and when we can distribute it to sites. This has resulted in driving down both distribution costs and working capital.”
Another benefit is increased sales, because an accurate forecast means Circle K has fewer stock-outs. “If there is ever a time when our store has no fuel, the customer might not shop with us the next time,” Tagtstrom explains. “So it’s very important to us to anticipate demand.” Circle K also realizes intangible benefits: confidence (because everyone is working from the same plan and data), less stress, more collaboration, and the ability to make better-informed decisions.
Circle K chose the Anaplan platform for its ability to get up and running quickly with an iterative development process. Other important factors were the platform’s scalability and intuitiveness, which led to high end-user acceptance. The road ahead includes broader usage, more data sources (such as weather data), machine learning integration, and partner views.
I’m Magnus Tagtstrom, and I lead supply chain optimisation in Circle K. We have four to five products and around 2,500 sites. One of my objectives has been to try to connect the dots in the supply chain. I think we had good solutions, but people were doing forecasting in silos, so I wanted to connect that planning end to end. I looked into other point-specific solutions—the requirements from my side was that we need something flexible and we need something quick. Then I came across Anaplan, which for me is like a … I don’t know, I think people use the words “Excel on steroids.”
The approach that we’ve taken to the entire implementation is: I would like a solution that we can maintain in-house. We’ve trained model builders in my team to develop this in the future. But we were not used to Anaplan, and we were not used to quick development—and we were not really used to what you could do with it. So therefore we chose Executit, which is a local partner here in the Nordics. They’re quick in the development, and they can challenge me. So the solution that we built is replicating a lot of Excel’s, replicating a lot of ERP functionalities. But the nice thing is that we created a connector to the ERP systems, so we get daily updates on volumes and daily updates on sales across the entire field supply chain automatically integrated to the model.
Biodiesel is a big thing in the Nordics. We would like to sell as much as we can, but we have a shortage of it, so we need to allocate it to where our customers need it the most. So taking the Anaplan solution that we have now, it actually automatically had an impact; e.g., what products do we need to supply into our terminals? So I think, for me, that was the kind of, “Okay, when you put the plans in the same place, when you put the known things and when you do allocations, it automatically has an impact on the people doing the shipping plans.”
Some of the clear benefits that I see is the forecast accuracy—being specific in forecasting and then also having the BU inputs to plans into that—I think that will help us to have the right stock level throughout all our sites. That’s money that we have as a buffer in the supply chain now.
So when let’s say [we buy a] product that we got from the Anaplan solution, we have full visibility of our inventory levels and the inventory levels, as well as forward-looking inventory levels, because we know how much we will sell from our demand plans and we know when we can distribute it to sites. This makes us much more specific in being able to drive down both distribution costs and working capital. So what we utilized is taking analytics, in our case power BI on top of Anaplan, to be able to create a much better report to get the insights. With Anaplan, I think we have taken this low-tech industry into something more high tech, and we’re ready for the future.
We spent roughly 90 percent of our time just going through the process. Taking the information from the business partners, turning the handle, going through the process, validating the information at the end, just to make sure it made sense-and then only probably 10 percent of the time going through and really challenging what was coming out of the models, and requiring evidence from our business partners for where the peaks and troughs were.
We didn’t think we were serving our internal customers or our external customers. Getting something in right away, as quickly as we could, was probably the big thing. It had to be easy to implement, easy to use, and everybody from a super-user to an executive, who’s just going to be looking at a dashboard, would find it very, very easy.
[The Anaplan platform] is up there with probably the fastest speed to market that I’ve seen. I’ve done two different technologies that were more process-based-workflow management, things like that-which all took a significant amount of time, were significantly more expensive, and were altogether a lot more difficult. What we want is for our own team to be super users, and we don’t want to have to rely on somebody else to do the work for us.
We’ve been using Bedford Consulting to help us with that. The key thing-what we wanted was to make sure that when our time with Bedford Consulting was done, we’d be able to fully operate the tool on our own and have only very limited interaction afterwards. Literally, the first day of getting people into it, they’re already able to see all the benefits that they’re going to get from it.
Not just the stuff that we’re telling them they’re going to get, but as they’re building stuff, as they’re doing the e-learnings and as they’re working through it, they can go, “Oh, I’ve never been able to do this in [spreadsheets,] and now I can do this in Anaplan.” In a planning role, it’s difficult to make things sexy, but I think Anaplan does that. And it’s a cure for all the issues that you get with [spreadsheets]: manual errors, reporting issues, all that kind of stuff.
I think the great thing about what Anaplan brings in, in its nimbleness and its adaptability, is that you can do whatever you want, whenever you want—today, right now, push it through instantly—to give you real-time information to make real-time decisions.