Case Study:Alsea

Managing Mexico’s Fast-Food Growing Pains

As if to prove the universality of the forecast- when executive management made implemen- “We didn’t even have anything in Excel,” ing dilemma, Alsea has projected rapid growth tation of a scalable and easy-to-use forecasting Jimenez said. “We might have had some infor- as it provides ordering for most Dominos and demand planning solution a mandate. mation on lead times but not all. The trouble Pizza and Coffee in Mexico. To make the transition the company hired a was not the interfaces to Demand Solutions, the Dominos Pizza has become the number software consulting firm that recommend five problem was we didn’t have the information.” one quick service chain in Mexico, solutions. Each of those five companies made Of course this gave the company time to with more stores than any other single chain a presentation and a proposal in the DIA’s get a “fresh” start. there. Alsea’s subsidiary, Distribuidor headquarters in . That way they “Still, we had active and inactive products Internacional de Alimentos (DIA), services could see the applicability of the solution to in the same database,” Jimenez said. Since it 472 Dominos in Mexico. their own planning and forecasting issues. didn’t have a single integrated database DIA The exclusive Starbucks franchisee for Each presentation was attended by the compa- could begin with a clean slate. Mexico since 2002, Alsea also acquired the ny’s directors and specialists, each evaluating “This system of planning was a big step for second-largest operator in the ease-of-use and practicality. our planners,” Jimenez said. “In the beginning country this year. Following an aggressive they had a very hard time understanding. It expansion plan the company hopes to have The three best- was a tremendous challenge for users and 100 fast-food in its chain by 2008. huge resistance when they already had a way Alsea SA de CV was founded in 1997 as selling toppings they were doing things.” a holding company of seven subsidiaries On the other hand, Jimenez says, now they dedicated to developing the Dominos Pizza in Mexico are love it. “Everyone can do forecasting them- franchise in Mexico and as well as selves and it helps them make more informed providing food service to the restaurant, jalapeno peppers, decisions,” Jimenez said. entertainment and hotel sectors. With such Jimenez cited one of the most popular fea- diverse holdings as snack bars in movie the- ham and pineapple tures of Demand Solutions, its ability to work aters, forecasting could save thousands of with an Excel datasheet, as a welcome exten- dollars monthly in spoilage, proper planning Under the management of Alsea’s sion of the utility of the software. The compa- and historical patterns. Corporate Director of Logistics Hector Orrico, ny’s three users now routinely provide their The DIA subsidiary was founded by Alsea DIA decided to purchase Demand Solutions reports by exporting to Excel templates for to satisfy logistic requirements, purchasing, Forecast Management and Demand Solutions planning meetings. storage and distribution to Alsea’s franchise Requirements Planning. There are more than 1,300 items in DIA’s locations and customers. DIA manages five “Installing the system itself did not present database and Jimenez said the software has distribution centers, located in Mexico City, any major problems,” said Gustavo Jimenez, “improved our business a lot. All the sales Hermosillo, Monterrey, Cancún and Tijuana. the planning manager for DIA who works for and the history of those sales are now in the When many US planners say they were Orrico. “The training was very good and the system, and the system now gives us a fore- using manual systems it often applies to the problems we had were internal problems. We cast.” Also, Jimenez says, they can see their “spreadsheet solution” using a computer. DIA had to track some things that we weren’t yet inventory levels and we know when to order was working strictly manual—meaning hand- tracking in order to determine proper lead the products, reducing spoilage and decreas- written—forecasting calculations a year ago time, safety time and safety stock. ing returns. DS

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