Food & Beverage

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Supply Chain Planning Integration Improvement

Our client,a large FMCG dairy manufacturer with approximately 85% of its volumes being delivered to the major supermarket retailers was experiencing significant growth. In order to service this growth profitably, the manufacturer was looking for the optimal way to collaborate with the retailers to improve the accuracy and velocity of its planning processes. We worked with our client to achieve the following outcomes: safety stock days cover was reduced by a quarter; high service levels and low write off cost were maintained despite lower inventory; increased visibility of the promotions, leading to better collaboration when comparing forecasts; improved low stock allocation processes; faster planning cycles effectively leveraging the planning already performed by the retailers.

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Planning Assessment

Our client, a manufacturer and distributor of food solutions, had doubled their revenue within the last seven years, so were looking for opportunities to ensure their systems and processes were able to support their continued growth. Additional challenges our client faced included a recently implemented ERP system that was not being leveraged to drive purchasing requirements, unclear roles & responsibilities, multi-level substitutable BOM components, a high proportion of product innovation and introduction, and a high supplier volatility. GRA was engaged to review their current supply chain and develop a roadmap that would deliver the required improvements. 

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Demand Planning & S&OP Review

Our client is a national producer of dairy drinks, food and fruit juice for industry and retail channels. They were facing significant challenges maintaining acceptable service levels to customers with customers threatening to de-range various products if service levels did not improve. Our client sought help to review their demand planning processes and tools with a view to identify improvement opportunities. Quantified savings identified included up to $23M reduction in inventory holdings, service level improvements from 87% to 98% and a reduction of damaged and dated (D&D) products from $32m to $15m.

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Supply Chain Strategy - Network Design

Our client, the Chinese division of a global food manufacturer, has over $7bn in global revenue. GRA was engaged to develop their Chinese supply chain strategy by assessing the implications of the business’s growth projections on their current operations. This covered modelling of the business’s five year growth strategy across each of its sales channels, and projecting the impact on domestic manufacturing volumes, import volumes across multiple ports, inbound flows to 3PL distribution centres, and the outbound flows to its customer channels. Sensitivity testing was performed to understand the implications of exceeding or missing the growth estimates. The outcome from the project formed the basis of their supply chain strategy for the following five years, and included the opening and closing of distribution centres, optimisation of transportation routes and modes of transport, stocking strategies, and manufacturing implications.

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Planning & Warehouse Operations Review

Our client is a vertically integrated food and logistics business. Their core business is as an online, direct-to-home retailer of fresh food and grocery product. The company was embarking on an organisation wide transformation with the objectives to raise customer numbers, average basket size, and optimise costs. As a result they engaged GRA to review the appropriateness of the current supply chain, its warehouse operations, transport, planning, procurement and network from a cost, service and growth perspective. The outcome was a workshopped roadmap of a series of recommended Process and Systems changes in the areas of the warehouse operations and demand, inventory and replenishment planning. This Roadmap factored in the business’s growth strategies and provided a practical approach on the key enablers that would allow the client to deliver to the roadmap. 

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Planning Review & Integrated Long Range Planning Development

Our client is an Australian family-owned winemaker of quality, award-winning wines for the domestic and international market. The company was experiencing a disconnect between the marketing/sales elements of the business, the supply chain department and the wine making end of the business which contributed to excessive inventory levels. GRA was engaged to assess the current operating model, design an improved operating model and assist with its development and implementation with a goal to look for opportunities to reduce the investment in inventory held by the business to free up cash for reinvestment in other activities. The outcome was the development of an Integrated Long-range Planning (‘ILP’) process and tool to facilitate the process that the business bought into that agreed stocking policies & targets signed off by management; identification of $1.7m in inventory savings; Coaching & Mentoring of key executives; and a detailed gap analysis and next steps roadmap around improvement opportunities.

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Planning Capability Review 2

Our client is a market leading national producer of food products for the foodservice and retail channels. They operate in a complex environment where inventory opportunities are strongly influenced by supply seasonal versus make-to-stock nature of categories. They were facing rising inventory levels with their service levels goals not being met. GRA conducted a qualitative and quantitative assessment of their process, systems and inventory to establish the framework to unlock the opportunity in their supply chain. Results included $14m inventory reduction; $5.7m operating cost savings; $1.6m write-off reduction opportunities; and service level improvements from 94% to 98%.

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Sales & Operations Planning (S&OP) Design 4

Our client is a New Zealand-based natural health company which produces, sells and distributes its range of natural health and natural skincare products globally. The organisation had been undertaking significant business transformation and wished to improve the process by which they made decisions in order to better balance supply with demand, integrate strategic and operational plans and align the business. GRA was engaged to design a Sales and Operation Planning process that would build on the organisation's existing planning capability in order to meet these needs. A comprehensive solution was developed for the client which allowed them to establish an effective S&OP process.

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Testimonials

GRA’s consultants are clever, system-savvy, ex-Planning Managers from industry – who have hands-on experience in the planning requirements of FMCG. Their engaging, logical, and disarming approach meant that our planning team were happy to cooperate with GRA in full, and also happy to hear GRA’s list of suggested improvements.

– Danny Mellon, GM Planning, Logistics & Procurement, Simplot

Typical results

  • 20-40% inventory investment reduction
  • increased service levels ranging up to 99.9%
  • 10%-15% reduction in supply chain operating costs
  • 5%-20% spend management savings
  • the ability to fund business initiatives from operating cash flow (OCF) improvements
  • improved return on capital employed (ROCE)
  • a minimum 3:1 ROI (10:1 to 30:1 typical)