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Customer Snapshot: Overview

Tempo's new distribution center can dispatch 288 million liters of drinks a year

Since 1954 Tempo Beverages has been helping Israelis beat the heat with a wide range of cold drinks, thus earning the distinction of being the country’s oldest supplier of liquid refreshment. Originally a family-owned company, Tempo has expanded over the past 10 years, gone public, and partnered with Dutch brewer Heineken.

Tempo Beverages

US$271 million (2010)

Number of Employees

Line of Business
Platform and Technology, Supply Chain

SAP Solutions
SAP Advanced Planning and Optimization, SAP ERP

Netanya, Israel

Customer Website

Implementation Partners
Creative Management

Consumer Products

Customer Snapshot: History

A Thirst for Quality

Customer Snapshot: Business Model

Liquid Assets

Licensed by PepsiCo, Tempo manufactures, imports, markets, and distributes soft beverages, (sparkling drinks, juices, bottled water, energy drinks, and malt) and alcoholic beverages (beer, wine, spirits, and ready-made cocktails). Tempo is Israel’s largest alcoholic beverage distributor and third-largest soft drink distributor.

Customer Snapshot: Success Strategy

Getting Bottles on Shelves

Tempo’s innovations (such as introducing PET bottles in Israel) set high market standards. Tempo knows that if their customers can’t find their products when they’re thirsty, they will drink someone else’s brand. That’s why Tempo’s goal is to ensure solid logistics to support both sales and distribution.

The Challenge

Forecast for Improvement

Having gone public, Tempo began improving business processes and replacing homegrown IT with more sophisticated integrated software. Migrating to SAP ERP in 2007 led to better business processes and visibility, but demand planning and forecasting was not included in that implementation. Tempo needed a better way to forecast market desires.

Enter SAP

Better Planning Software

Tempo’s marketing team was forecasting with Excel spreadsheets and homegrown software, and inaccuracies led to higher levels of stock-on-hand. So Tempo looked at three choices: the system being used Heineken; functionality already included in SAP ERP; and SAP Advanced Planning & Optimization (SAP APO), part of SAP Supply Chain Management.

We chose SAP APO for several reasons. We wanted the integration it provided with our SAP ERP application. SAP APO would also allow us to avoid supporting multiple systems.

Enter SAP: The SAP Experience

Making it Real

Tempo implemented SAP APO in three phases. First, they enlisted input from marketing to determine what information was needed. Next, they created a structured organization process, a description of the flow of information between marketing, demand, and IT. Last, they set up the metrics for analysis.

Better Business

Delivering the Goods

Having built all the user screens with implementation partner Creative Management, Tempo now has a structured approach to demand planning and forecasting that was previously absent from the organization. Integration with Tempo’s SAP ERP application makes it all run smoothly.

Better Business: Benefits

Organized for Success

On top of gaining the ability to plan and forecast more accurately, the company overall is now better organized, better managed, and better supported by IT. Tempo’s organizational processes are markedly more effective as a result of the initiatives to improve communication that accompanied the implementation of SAP APO.

SAP ERP was a blessing…. Everything is organized, and you can see all of the processes all the time. In my department we are also responsible for all supply planning, including planning materials and production planning, and we can plan much better because of our ERP system….

Better Business: Lessons Learned

Understanding Demand

The development of new demand planning processes has helped Tempo’s management tremendously, and visibility has increased across the company. All of which supports better decision-making.

The fact that we have a business process has itself improved transparency. Now people can see the input from every department and determine the accuracy of their forecast, what the trend in the market is, and how well they predicted the current demand.

Better Business: Run Simple

Getting it Right

Before the implementation, Tempo had an average of 65% accuracy, and today it’s between 80% to 85%. That increase in accuracy has helped reduce inventory levels by 10% across the organization.

This is exactly what demand planning is all about in a make-to-stock company. You know what you are making and putting into stock, so you are able to set up stock for the predicted demand. You don’t have back orders that you cannot deliver on the one hand, nor do you have excess stock for products that are not required and would cost you money to retain – or worse, actually throw away. It appears that for a make-to-stock company, the benefits of SAP APO are just too tempting to resist. Not unlike a cold beverage on a hot Mediterranean day.

Journey Ahead

Putting Demand Planning into Action

By taking their current business environment into account and combining it with past history, Tempo’s new demand planning processes have improved the business by supporting better decision-making. Across the company, end users can now see input from every department and tap into market trends.

Thanks to the successful implementation of SAP, we have achieved a higher accuracy of forecast.
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