Collaboration and Information Sharing toward forecasting : A case study at L’Oréal Sverige AB

Abstract: This paper tackles the need for information sharing between retailer and supplier in the fast moving consumer goods industry. Satisfying the end customer demand strains both the supplier and the retailer’s supply chain. Uncertainty and randomness of orders at every level requires every player to forecast future demand. Inaccuracy of these forecasts increases costs in the supply chain, whenevery player tries to minimize its own costs independently. In order to decrease overall cost, collaboration is required. Collaboration can only be achieved through an exchange of information between the considered players. This investigation focuses on how to use information sharing to increase forecast accuracy at the supplier. Using end customer demand allows the supplier to use new indicators to measure its performance; up to taking control of its brand inventory at the retailer’s. The goal is to decrease overall costs by decreasing the demand amplification effect and increasing service levels along the supply chain.