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New and Improved Supply Chain Drives Bottom-Line Results

Saddled with excessive inventory and end-to-end supply chain issues, a leading global food manufacturer was experiencing category underperformance. The company teamed up with BCG to improve forecasting, optimize production, and increase go-to-market performance.

A comprehensive review revealed challenges stemming from the client’s complex product line, inconsistent forecasting, long run-length manufacturing, and suboptimal in-store shelf assortments. The time from processing plant to retail shelf was greater than 70 days, resulting in poor freshness on shelf with less than 50% of code life remaining.

BCG created an end-to-end supply chain optimization program that focused on three areas:

  • Forecasting. The results were simple yet accurate forecasts based on historical demand levels and known pricing actions. The company gained visibility into customer inventory levels, and it set dynamic, segmented safety stock targets.
  • Production. The team optimized and standardized short-cycle scheduling. It also streamlined the client’s product formulations. This led to more flexible assets for faster changeovers.
  • Go to Market. The client increased the distribution of its top-selling SKUs and eliminated underperforming SKUs. It improved on-shelf product availability and shelf life, and it increased its total share of shelf.
reduced inventory 40 forty percent operations

In three months, the client reduced its inventory by 25%. Once the program was fully deployed, the client achieved a 40% reduction.

reduced average turnover 50 fifty percent operations

In three months, the client reduced its average turnover rate by 30%; by full implementation, turnovers happened 50% faster.

sales increased by three 3 percent operations

Sales increased by 3%.

total product formulation costs decreased by two 2 percent operations

Total product formulation costs decreased 2%.

Operations
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