Demand ( Mis -)Management at Campbell’s Soup

Demand (Mis-)Management at

Campbell’s SoupDr. Ron Lembke

Soup Consumption• When do you drink chicken noodle

soup?– When you’re sick

• When do people get sick?– In the winter

Soup Consumption

What would you do?• How would you react to that

demand?

Soup Shipments

11/17/99

Benefits• Campbell’s Benefits

– 15% Sales increase– 6% transportation cost reduction– 30% less sales staff labor time– Less order variation- no forward buys

• Retailer Benefits– Inventories cut in half– Stockouts from 1.5% to 0.3%– Lower order processing costs

2/17/00

Heinz’ Efforts• Aug. 1996