Sweden is a nation of coffee-lovers. Coffee drinking is part of the culture and the average Swede gets through four cups per day. Löfbergs, with its characteristic purple and yellow branding, is synonymous with coffee tradition in Sweden. The family-owned company has been operating from a base in Karlstad since the early 1900s.
A passion for good coffee, as well as a commitment to sustainability and fairness has served the Löfberg family well. Today the company is one of the largest coffee producers in the Nordics, and among the world’s largest importers of organic and fair trade coffee.
The majority of Löfbergs coffee is still roasted and packaged in Karlstad. From here, it is shipped across Scandinavia, to the Baltics, the UK and more recently, Canada.
A tricky balancing act
Löfbergs serves a broad spectrum of customers – from major retailers and national restaurant chains, to small, independent cafés. Many expect next-day delivery. The company buys directly from growers’ cooperatives and coffee retailers in the Equatorial belt, and ships the beans back to Sweden – a journey that typically takes eight weeks. Löfbergs needs to be able to meet demand, but at the same time, doesn’t want to over-purchase. If they don’t get it right, their purchasers end up having to buy from the spot market, which is a lot more expensive.
Jerker Friberg, Logistics Manager at Löfbergs highlights the challenge, “When your customers expect next-day service, but procurement lead times are measured in weeks and months, and production involves a delicate roasting process, you have quite a challenge on your hands. Having a clear and accurate demand plan becomes essential to balance both stock and service levels.”
Getting a handle on production planning
In 2012, Löfbergs began looking at better and more efficient ways to respond to the ever-changing demand for its coffee. In its search for a forecasting tool, the team recognised that the production side of the business also lacked adequate planning.
The planning functionality offered by the MRP system didn’t take production capacity into account. Jerker, who was planning manager at the time explains, “The plans we had available to us would only tell us how much to buy and produce, but not answer the more critical questions of how, where and when. Optimity’s Supply Chain Optimizer offered this functionality and has helped us greatly. We now have the ability to quickly generate optimized production plans that take into account the most up to date forecasts and order situations, while respecting the capacity and current load of the plant.”