How a beverage company added refreshment to its supply chain

Related topics

Transformation Realized
Consulting
Consumer Products
Supply chain
Alliances
EY Global
Ernst & Young Global Ltd.
1

The better the question

Can you reimagine a supply chain by focusing on just one link?

Business-as-usual wasn’t working, and the answer wasn’t a matter of installing one platform or fixing one process.

Serious middle age woman quality control worker checking robotic line for bottling and packaging carbonated black juice of soft drink into bottles.

How EY can help

After two large mergers within about a decade, a global beverage company became a powerhouse with nearly 100 brands and dozens of manufacturing facilities. But operations were inefficient and burdensome: two separate SAP systems, three warehouse systems and inconsistent manufacturing practices. These operational complexities drove the beverage company’s costs much higher than those of its competitors. 

The solution wasn’t a matter of installing one new system or updating one plant or warehouse. To achieve optimal business value, it was critical the beverage powerhouse focused more broadly across its supply chain: achieving cohesive integration between manufacturing and warehousing. Additionally, as the consumer goods industry has been undergoing a supply chain revolution for some time, it was important that they managed risk through supply stability. So in 2016, executives embarked on an ambitious plan of standardization and modernization

This effort to unify processes and streamline disparate back-end systems aimed to save the company time and money, improve its throughput, and reduce expired product — a reimagination of business-as-usual from factory floors all the way through to warehousing. 

To guide its long-term transformation, the company called in Ernst & Young LLP (EY) professionals, backed by powerful alliances with SAP and Procter & Gamble, to address three items: warehousing optimization, manufacturing operations and automated storage/retrieval enhancements.

How supply chain reinvention went down smoothly at a beverage titan

Several mergers left this beverage giant with disjointed processes and disparate back-end systems. Implementing SAP Extended Warehouse Management streamlined warehouse operations while Procter & Gamble’s Integrated Work System addressed manufacturing inefficiencies.

2

The better the answer

The power of alliances delivers the recipe for success

A streamlined way of working — from production to packaging to the warehouse floor — joins human talent with next-generation technology.

How EY can help

The first course of action was for EY professionals to perform an operational assessment and design a plan with SAP Extended Warehouse Management (EWM) on the warehouse side. As an SAP Global Strategic Services Partner, EY was well-positioned to handle this work, and the blueprint developed was then implemented across the company’s beverage manufacturing network in the US. However, a software implementation was just the foundation. EY also took steps to merge legacy operations and add automation to product storage and retrieval. Even the way in which trucks arrive at the plant to be loaded was rethought and optimized.

While the team was working to streamline warehouse operations, a similar transformation was occurring further upstream in the supply chain. Using a powerful combination of our sector-specific skills and Procter & Gamble’s Integrated Work System (IWS) — provided through a purpose-built digital transformation platform from EY — we were able to help to address inefficiencies within manufacturing. This proprietary way of improving manufacturing reliability, reducing costs and elevating productivity was founded on two primary principles: the drive to zero losses and 100% employee ownership. It would bring rigor and integration across all global plants.

Humans at center — how can employees work smarter, not harder?

EY’s knowledge, alliances with SAP and Procter & Gamble, and collaborative approach were crucial differentiators in winning the manufacturing work. EY professionals don’t just bring clients into a room — they walk right onto the shop floor, talk to employees about their day-to-day challenges and work together to develop smart solutions to complex issues.

To set operators and teams up for success, IWS aims to establish a sense of ownership within the workforce. Employees are encouraged to assume responsibility for the equipment they use with the power to perform fixes themselves. IWS helps drive better utilization and increased operating capability through autonomous maintenance. To date, EY professionals have rolled out IWS in almost every manufacturing facility.

Technology at speed — how does one new system trump three old ones?

An element of risk exists in all transformations. To reduce the warehouse engagement risk, EY professionals worked with the client on a controlled transition during the SAP system go-live and hyper-care phases. The volume at the facility was temporarily lessened and shifted to other warehouses, and a ramp-up plan was established in advance, factoring in what’s needed from staffing, assets and change management perspectives.

The EY team delivered a single, global SAP EWM template replacing the three legacy systems, enhancing performance tracking and improving warehouse operations. This fully customized approach streamlined warehouse operations and strengthened packaging production processes, thus giving the beverage company visibility into its warehouse inventory that it had previously lacked. Now, inventory is accurate, and the company is better equipped to meet consumer demand.

Innovation at scale — when robots carry the load, what will you be free to imagine?

To top it off, EY assisted with automating a storage and retrieval system and implementing laser-guided vehicles to handle movement of products within each warehouse. Packing and unpacking systems and process can also be a huge bottleneck. The EY team introduced SAP yard management, a system that allows for better orchestration of loading and unloading product on trailers based on when they arrive at the warehouse and where they need to go. None of this would have been possible with fragmented systems and hasty planning. Together, the newly implemented systems and process allow for a much more streamlined approach to beverage production and distribution.  

3

The better the world works

$100 million saved, and that’s just the beginning

The company’s supply chain has greater operational efficiency, empowered workers, more agility — and fresher product.

Since 2016, the company has seen significant achievements: a savings of over $100 million globally in manufacturing with the help of IWS, planned savings of $30 million a year in warehouse efficiencies, a $4 million savings from a reduction in the waste of finished goods, and a 10-percentage-point increase in overall equipment effectiveness.

USD
100 million
Global manufacturing savings with the help of IWS.

Ultimately, the IWS process on the manufacturing side together with the SAP warehouse management component drove significant overall benefit and value to the client. Beyond the greater cost savings, these projects added agility and improved the organization’s value to their customer through increased responsiveness to demand and better quality assurance.

And as the projects continued, lessons learned from previous deployments greatly accelerated speed-to-market by cutting out timely and costly bottlenecks in the supply chain. Now, EY professionals have been tasked with turning their attention to the company’s warehouses outside of the US. And we’re looking into improving the company’s strategic planning as well — because opportunities for better supply chains exist from end to end in a consumer goods industry undergoing massive change.

The team

EY Global

Ernst & Young Global Ltd.

 

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