Tillamook turns supply chain planning into growth engine

For Tillamook, the challenge was not simply deploying new technology. It was redesigning how a historically regional dairy cooperative could scale into a national consumer brand while maintaining product quality, controlling spoilage, and managing increasingly complex inventory and fulfillment networks.

The Oregon-based cooperative, founded more than 100 years ago by dairy farmers, has spent the past decade steadily expanding beyond its traditional West Coast footprint into national retail markets. That growth created significant new planning complexity, particularly given the nature of Tillamook’s products.

“Implementing planning technology at Tillamook has dramatically lowered our operating cost and increased our service levels simultaneously. Broad-based business improvements like this are difficult to find today, so embracing the next implementation phase is a big priority for us,” Jake Anderson, vice president of supply chain at Tillamook, said in a statement to Supply Chain Management Review.

Tillamook’s core products rely on aged cheese, sometimes as long as eight years. That long aging cycle fundamentally changes the nature of supply chain planning. Unlike many consumer products that can be replenished relatively quickly, Tillamook must make production and inventory decisions years before products ultimately reach consumers.

“Their sharp cheddar [ages] for a year and a half,” said Erik Secan, vice president of sales for supply chain software firm Logility, told Supply Chain Management Review recently. “They’ve got to know how much they’re going to sell a year and a half from now.”

Historically, companies facing that level of uncertainty respond by buffering inventory to avoid out-of-stocks. But as Tillamook expanded nationally, that strategy became increasingly expensive and difficult to scale.

“There’s a tendency to want to really buffer that,” Secan said. “But that’s expensive, especially to store it for that long, and some products will go bad as well.”

Instead, Tillamook focused heavily on improving forecast accuracy and building greater confidence in demand planning across the organization.

Unified planning

According to Logility executives familiar with the project, Tillamook used demand planning, inventory planning, and supply planning technologies to establish a more unified planning structure and improve forecast visibility across the business.

The implementation resulted in an increased forecast accuracy of 85%, up from 70% prior to implementation. That improved forecasting capability became increasingly important as Tillamook’s distribution network expanded geographically.

Originally, the company primarily focused on aggregate demand forecasting. But national growth required more granular planning capabilities that accounted for regional demand variation, retailer-specific requirements, and inventory positioning across multiple locations.

“As they went national, they had to understand where the demand was going to be, where do they want to put the products,” Secan said. “So, they not only [improved] their forecast accuracy, but it also got more granular.”

That planning transformation produced measurable operational results.

According to statistics shared during the interview, Tillamook reduced spoilage-related losses by $4.2 million while simultaneously reducing finished goods inventory by 75%.

At the same time, the company maintained companywide fill rates of 99% across roughly 200 items spanning seven product categories.

Those improvements supported broader business growth as Tillamook expanded into new geographic markets and product categories, including ice cream and other dairy products.

Growth grows

Sanjiv Gupta, global head of Aptean Ascent (Aptean is the parent company of Logility) noted that Tillamook sustained approximately 8% compound annual growth over an 11-year period while gaining market share against significantly larger national competitors.

“This does not happen while just doing general business,” Gupta said. “Technology … was key to achieve that growth.”

According to Gupta, Tillamook’s market share in cheese increased steadily over the past decade even as portions of the broader category remained stagnant or declined.

The company is now entering another phase of supply chain transformation as its East Coast presence continues growing.

“They’re now looking at things like network design,” Secan said. “Continuous network optimization ... contract manufacturers, 3PLs; they’re building new plants … to service customers from.”

That next phase reflects the operational realities of becoming a national brand. What once functioned as a relatively localized dairy supply chain increasingly requires sophisticated inventory placement, transportation optimization, and production decisions across a distributed network.

Tillamook’s history itself mirrors that evolution. When it started, the challenge was moving product closer to the end markets. More than a century later, the company is still solving essentially the same challenge—just at a much larger scale.

The company’s conservative operational culture may also have played a role in the success of its planning transformation.

“They’re a farmer-owned cooperative, so they’re conservative [by nature],” Secan said. “Very conservative growth strategy, conservative investment approach.”

But according to Gupta, Tillamook leadership made an early commitment to supply chain planning technology as a strategic growth enabler rather than simply an operational tool.

“Management made some early bets on, ‘I’m going to use this piece and this will help us grow,’” Gupta said.

For Tillamook, that bet appears to be paying off.

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