Forecasting Inaccurate Product Demand

Oct 13, 2025 by magicalceylontours.com 132 views

Introduction

In today's fast-paced and competitive business environment, companies are constantly seeking ways to optimize their supply chain systems to stay ahead of the competition. One approach that has gained significant attention in recent years is the Theory of Constraints (TOC) approach. This methodology focuses on identifying and overcoming the main obstacles that hinder the overall performance of a system. In this article, we will explore the application of the TOC approach in designing an effective supply chain system at PT. Coca-Cola Bottling Indonesia Medan.

Background

PT. Coca-Cola Bottling Indonesia Medan, as one of the subsidiaries of The Coca-Cola Company, is responsible for the process of breaking and distributing soft drinks. The extent of the marketing area requires the company to have an effective supply chain system in planning and controlling the inventory of raw materials and finished products. However, the integration of information flow between components of the supply chain is still a challenge, causing obstacles in meeting market demand.

Identifying Obstacles with the Current Reality Tree (CRT)

Observation of the supply chain at PT. Coca-Cola Bottling Indonesia Medan revealed 8 undesirable effects (UDES) which hinder performance. Through the current reality tree (CRT), identified 3 main factors causing the UDES:

Forecasting Inaccurate Product Demand

As a result, the production process is not in accordance with planning and can cause a surplus or product shortages. This is a major obstacle in the supply chain, as it leads to waste and inefficiency.

Determination of Inappropriate Stock Safety

The company sets the same stock for all types of products every month, without considering the needs of each product. This results in a buildup of inventory and waste.

Poor Coordination between Marketing and Production Department

Lack of information and communication integration causes a mismatch between production planning and market needs. This leads to inefficiencies and waste in the supply chain.

Solution to Optimize the Supply Chain System with the TOC Approach

To overcome these obstacles, researchers formulated 3 solutions based on TOC:

Forecasting Demand and Safety Stock Products

Determination of more accurate stock safety stock by considering the demand for each product, reducing waste and ensuring product availability according to market needs.

Development of Logistics Information Systems

Building an integrated information system to improve communication and coordination between marketing and production department, so that information about market demand can be accessed easily and the production process can be adjusted to actual needs.

Improvement Supply Chain Visibility

Increasing visibility supply chain by collecting data about demand, inventory, and production in real-time. This information can be used to make more appropriate and efficient decisions.

Benefits of Applying TOC in the Supply Chain System

Application of the thinking process of Theory of Constraint (TOC) in the supply chain system at PT. Coca-Cola Bottling Indonesia Medan has several benefits, such as:

Increasing the Accuracy of Forecasting Demand

Improve the accuracy of forecasting product demand will reduce waste due to surplus or product shortages.

Optimization Safety Stock

Determination of the right stock safety stock based on the needs of each product will reduce the cost of storage and buildup of inventory.

Increasing Production Efficiency

Better coordination between marketing and production will increase production efficiency, ensure the fulfillment of market demand and minimize lead time.

Improving the Quality of Customer Service

The availability of timely products and as needed will increase customer satisfaction and brand loyalty.

Conclusion

The approach of the thinking process of Theory of Constraint (TOC) is an effective solution to optimize the supply chain system at PT. Coca-Cola Bottling Indonesia Medan. By identifying and overcoming major obstacles, companies can improve efficiency, reduce costs, and improve the quality of customer service. Application of integrated chain supply chain, optimal safety stock, and structured logistics information systems, will make PT. Coca-Cola Bottling Indonesia Medan more responsive to market needs and able to compete in the soft drink industry.

Recommendations

Based on the findings of this study, the following recommendations are made:

PT. Coca-Cola Bottling Indonesia Medan should implement the TOC approach to optimize its supply chain system.
The company should develop a forecasting system that takes into account the demand for each product.
The company should establish a logistics information system to improve communication and coordination between marketing and production department.
The company should increase visibility supply chain by collecting data about demand, inventory, and production in real-time.

By implementing these recommendations, PT. Coca-Cola Bottling Indonesia Medan can improve its supply chain system and become more competitive in the soft drink industry.

Q: What is the Theory of Constraints (TOC) approach?

A: The Theory of Constraints (TOC) approach is a management philosophy that focuses on identifying and overcoming the main obstacles that hinder the overall performance of a system. It is a holistic approach that considers the entire system, including its components, processes, and relationships.

Q: What are the main obstacles that hinder the performance of a supply chain system?

A: The main obstacles that hinder the performance of a supply chain system include inaccurate forecasting, inappropriate stock safety, and poor coordination between marketing and production departments.

Q: How does the TOC approach help to overcome these obstacles?

A: The TOC approach helps to overcome these obstacles by identifying and addressing the root causes of the problems. It involves developing a forecasting system that takes into account the demand for each product, establishing a logistics information system to improve communication and coordination between marketing and production departments, and increasing visibility supply chain by collecting data about demand, inventory, and production in real-time.

Q: What are the benefits of applying the TOC approach in a supply chain system?

A: The benefits of applying the TOC approach in a supply chain system include increased accuracy of forecasting demand, optimization of safety stock, increased production efficiency, and improved quality of customer service.

Q: How can PT. Coca-Cola Bottling Indonesia Medan implement the TOC approach in its supply chain system?

A: PT. Coca-Cola Bottling Indonesia Medan can implement the TOC approach in its supply chain system by developing a forecasting system that takes into account the demand for each product, establishing a logistics information system to improve communication and coordination between marketing and production departments, and increasing visibility supply chain by collecting data about demand, inventory, and production in real-time.

Q: What are the challenges of implementing the TOC approach in a supply chain system?

A: The challenges of implementing the TOC approach in a supply chain system include resistance to change, lack of resources, and difficulty in collecting and analyzing data.

Q: How can PT. Coca-Cola Bottling Indonesia Medan overcome these challenges?

A: PT. Coca-Cola Bottling Indonesia Medan can overcome these challenges by providing training and education to employees, allocating sufficient resources, and developing a data collection and analysis system.

Q: What is the expected outcome of implementing the TOC approach in a supply chain system?

A: The expected outcome of implementing the TOC approach in a supply chain system is improved efficiency, reduced costs, and improved quality of customer service.

Q: How can PT. Coca-Cola Bottling Indonesia Medan measure the success of implementing the TOC approach in its supply chain system?

A: PT. Coca-Cola Bottling Indonesia Medan can measure the success of implementing the TOC approach in its supply chain system by tracking key performance indicators (KPIs) such as inventory turnover, lead time, and customer satisfaction.

Q: What is the next step for PT. Coca-Cola Bottling Indonesia Medan after implementing the TOC approach in its supply chain system?

A: The next step for PT. Coca-Cola Bottling Indonesia Medan after implementing the TOC approach in its supply chain system is to continuously monitor and evaluate the performance of the system, make adjustments as needed, and explore opportunities for further improvement.

By implementing the TOC approach in its supply chain system, PT. Coca-Cola Bottling Indonesia Medan can improve its efficiency, reduce costs, and improve the quality of customer service.