The better the question
Is your supply chain pulling its weight?
Transforming an unwieldy manufacturing operation for the future
In these turbulent economic times, companies are continuing to consolidate and reduce their physical footprint. As a business goes though successive M&As, it can find itself bogged down with multiple supply chains, each with different ways of doing things and different challenges.
Leaders have to look afresh at the situation and be prepared to take radical action, or they may find themselves trying to accelerate while the brakes are on. They need to ask themselves: is my supply chain actually a weak link?
This was the question facing our client, a leading global foods company that had emerged from an intense period of deals with an unwieldy supply chain.
It urgently needed to build a 21st-century manufacturing operation in North and Latin America, aligned to its corporate strategic goals. Its vision was a cohesive and powerful new network, generating billions of dollars of cost and efficiency gains to invest in its most successful brands.
Without that streamlined supply network, the company would be laboring under a cumbersome arrangement unable to underpin its growth ambitions.
The better the answer
From analysis to implementation
Creating the road map, with quick wins along the way
EY first got involved in 2013, winning the trust of the company’s senior executives by pointing out the risks involved in the approach they were considering and suggesting alternatives.
The relationship deepened as we proved that our professionals, as well as offering regional and sector knowledge, could handle every aspect of this challenging project, including strategy, supply chain process support, risk and program management along with insights.
Our multidisciplinary team, which spanned many regions and countries, helped the client define what excellence looks like and formulate a global end-to-end supply chain strategy.
We then entered the assessment phase, which involved creating tool-kits to analyze each region’s current operating capability and identifying quick-win opportunities for rapid performance improvement.
We also assisted with a program of immediate, capital-intensive projects to redesign a supply chain that better supports their business in both North and Latin America. The third and final stage of the project involved implementing the new strategy.
The better the world works
Billions in savings
Freeing up money to fund more success
When the project was completed, production was consolidated in fewer, larger plants that are able to manufacture more of the portfolio of products. This improved agility, flexibility and resilience. The company has a coherent and technologically advanced supply chain that is geared to delivering its corporate strategic goals.
The eventual benefits are considerable: US$1.5 billion in net productivity and US$1 billion in cash flow (both over three years), as well as US$3 billion in cost savings.
The much greater capacity and flexibility and resulting efficiencies feed investment into the company’s most successful brands, setting the stage for growth.