Chi Forrest, a fast-growing beverage company known for its innovative and trendy offerings, has partnered with Sophus Technology Inc. The goal is to improve its capital expenditure (CapEx) decision-making capability as it expands globally.
Chi Forrest, like many businesses in the consumer goods sector, faces significant demand fluctuations across regions and time periods. However, production capacity lacks the same flexibility—it cannot be easily ramped up or down. Investments in production lines are long-term commitments, often spanning 10–20 years, and represent substantial fixed costs. This makes strategic decision-making for CapEx investments critical, as these decisions must be optimized from an end-to-end supply chain perspective to ensure long-term efficiency and alignment with business goals.
Key questions to be answered:
Chi Forrest’s CapEx decisions on production need address below questions:
- Timing and Location: When and where should new production lines be established?
- In-House vs. CMO Production: Should the company build in-house capacity or rely on CMOs?
- Inventory vs. Capacity Investment: Is it more cost-effective to build inventory or invest in new production lines, and how can shelf life and inventory challenges be addressed?
- Supply Network: How can factories and markets be aligned to minimize logistics costs?
Initially relying on a spreadsheet and some customized Python code, the Chi Forrest team found these methods increasingly inadequate for managing the complexity and scale of their decisions.
By adopting Sophus, Chi Forrest gained powerful optimization capabilities, enabling them to make more informed and precise CapEx decisions. As a result, Chi Forrest anticipates potential savings by avoiding costly missteps and optimizing their CapEx investment strategy.
Raphael Yue, CEO at Sophus, added,
‘Chi Forrest represents the new wave of innovation in the beverage industry, and Sophus is honored to support them on their journey to elevate supply chain decision-making capabilities and drive their rapid growth.’
