Client Name

National Foods Limited

Faculty Advisor

Mr. Asif Jaffer

SBS Thought Leadership Areas

Other

SBS Thought Leadership Area Justification

Global and regional market volatilities demand a reevaluation of traditional inventory models. This proposed thought leadership area will investigate the strategic shift between Produce-to-Stock and Produce-to-Order systems, specifically analyzing optimal supply chain decoupling points. Championing this research will position IBA SBS at the forefront of operational resilience, providing businesses with scalable frameworks to minimize stockouts and optimize demand planning.

Aligned SDGs

GOAL 12: Responsible Consumption and Production

Aligned SDGs Justification

The transition to SDG 12 (Responsible Consumption and Production) is structurally difficult, as global industries are increasingly pressured to adopt sustainable practices. Traditional supply chains, developed solely for speed and scale, inherently result in overproduction and waste of resources. This proposed area of thought leadership will investigate the critical intersection of sustainable production and operational resilience by analyzing the optimal supply chain decoupling points. The project will evaluate the strategic shift from Produce-to-Stock to Produce-to-Order hybrid systems and will show that robust demand planning is the critical lever to reduce inventory waste. This research will position IBA SBS as a leader in sustainable operations management, equipping businesses with data-driven, scalable frameworks that enable SDG 12 compliance while maintaining market responsiveness.

NDA

Yes

Abstract

In this project we will be exploring the practical application of a demand-based segmentation Made-to-Stock (MTS) and Made-to-Order demand planning strategy within the FMCG Industry – specifically on National Foods Limited. Traditionally, production systems in the food industry have primarily relied on MTS approaches to ensure product availability, avoid out of stock situations and leverage economies of scale. However, increasing market volatility, demand fluctuations, product variety, and perishability challenges have greatly impacted the effectiveness of purely forecast driven systems. The main objective of this project is, hence, to propose a variable production and demand planning framework that combines the efficiency of MTS systems with the flexibility and responsiveness of MTO systems with the aim to improve inventory utilization, reduce wastage, and enhance service levels. Production planning in food manufacturing aims to keep stocks which are ready to meet customer demands. The focus is on trying to keep production stocks from running out. Such a system combines planning production stocks and planning the stocks of supplies and is, therefore, very beneficial. Nevertheless, systems such as this will always have a problem if they are controlled by planning forecasts in order to meet the requirements of an unpredictable market that is characterized by a lot of variety, short product life, and high perishability. The system has a three-layer model: strategic, tactical, and operational. The focus of the strategic layer is the P/D ratio. This layer also employs analyses to classify products as Make-To-Stock or Make-To-Order. The model includes a tactical level Customer Order Decoupling Point. This decoupling point differentiates customer orders based on a policy of storing arrangements of semi-finished products. Flexible delivery of customer orders is met by a design offering an adaptive weekly production plan.

Literature findings support that hybrid production systems can significantly improve supply chain responsiveness while balancing inventory holding costs and production efficiency. The proposed model demonstrates how staple and products with accurately predictable demand can be produced in advance (MTS), while products with low-volume and largely fluctuating demand can be customized after ensuring customer orders. This approach minimizes overstocking risks, reduces product obsolescence, and improves the organization’s ability to respond to changing consumer demand patterns effectively.

Keywords: • Variable production system • Demand Segmentation based production • Make-to-Stock (MTS) • Make-to-Order (MTO) • FMCG supply chain • Demand planning • Customer Order Decoupling Point (CODP) • Food industry operations

Document Type

Restricted Access

Document Name for Citation

Experiential Learning Project

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Available for download on Friday, June 06, 2031

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