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Effective operations management in the food and drinks industry is dependent upon visibility and control of all aspects of the supply chain, from crop to consumer. In this highly competitive and dynamic environment, companies must become more agile than ever to compete. Rapid response to the changing needs of consumers is the key to success.

Challenges

A number of evolving dynamics continue to add complexity and challenges to supply chains including increasing materials costs and constrained supply of critical inputs, driven by population growth, increasing wealth and consumerisation. Seismic legislation and taxation changes aimed at altering consumer behaviour and reducing environmental impact have also been introduced in recent years.

Consumer demand has broadened with the growth of premium and fresh products at one end, and cost-conscious consumers driving the continued need for promotions and value products at the other. In addition, there has been a gradual opening up of new markets that can dramatically alter global demand, whilst also responding at home to channel pressures, including convenience retail and direct-to-consumer. 

There is increasing market thirst for innovation due to health / environmental concerns and premiumisation / segmented portfolios are putting stress on NPD processes and product lifecycle management. However, increasing data availability offers opportunities to identify additional sales and faster consumer response to those who are able to analyse this data effectively.

How we can help

At Argon & Co, our role is to help our clients cut through the complexity and attain operational simplicity. We work with our clients to develop a service response that addresses all operational pressures, allowing the strategy to be delivered efficiently. As a recognised specialist in the food and drinks industry, we have worked with some of the world’s largest food and drinks companies over many years. Through these projects we have gained valuable insight into the market dynamics under which they operate.  

We can help you with:

  • Increasing sophistication of demand management processes to inform the best supply response
  • Tightening the control of range management and product lifecycles
  • Adopting production strategies that are efficient and flexible
  • Becoming smarter at materials management and supplier performance management
  • Establishing more effective management of key supply chain partners through more integrated and aligned ways of working
  • Optimising inventory deployment throughout the supply chain
  • Increasing visibility and traceability through our digital solutions
  • Ensuring systems support the processes of the target operating model
  • Identifying people capability gaps and developing training and education programmes
  • Reduction of heavily manual and error prone activities through Robotic Process Automation i.e. mater data management and sales order processing
  • Deployment of leading-edge analytical tools to generate insights and inform better decision making

Food and drink case studies

APS system vendor selection process

winemaking company

APS system vendor selection process

TWE is a leading global grower, producer, distributor and marketer of wine. With its head office in Melbourne Australia, TWE sells over 70 brands in over 100 countries. TWE has seen significant growth which is expected to continue. As a vertically integrated business, TWE required an end to end planning solution with the support of an Advanced Planning System.

The objective of the project was to assess the current TWE end to end planning capabilities and supply chain costs to develop a business case to implement a new APS system.

 

Our role

  • Support TWE with the creation of an efficient RFP process
  • Develop demo scenarios that cover the end to end supply chain and required vendor solutions
  • Lead the RFP and demo evaluations to select the right APS system vendor for TWE
  • Develop an organisation design to support the global planning operating model and the APS system implementation

Results

  • A clear and transparent vendor selection process, leaving only the best APS system vendors to demo their product
  • Demo scenarios using TWE data, that cover the global end to end supply chain
  • A neutral and auditable vendor selection process and final choice of vendor
  • A new global organisation design including roles and responsibilities across planning functions
  • Readiness to implement an APS system

Demand planning and supply planning leadership

FMCG

Demand planning and supply planning leadership

Mondelez International was created by the demerger of Kraft Foods into a global snacking businesses; Mondelez and a USA grocery business; Kraft Foods. Mondelez as a snacking business concentrates its efforts on global brands including Oreo, Cadbury, The Natural Confectionary Company, Philadelphia, Ritz, Nabisco and Premium. Turnover in Australia and New Zealand is in excess of AUD$1.5 billion.

The business had a lack of senior demand and supply planning capability and high turnover of senior staff. There was also limited planning leadership during the implementation of integrated business planning (IBP) and an ongoing lack of focus on supply chain planning.

Our role

  • Manage the demand planning and supply planning teams on an interim basis
  • Implement a quick win process and people improvements whilst stabilising performance
  • Train and develop the planning teams
  • Implement a new planning organisation

 

Results

  • New demand and supply planning organisation implemented within six months
  • Customer service improvement from 96.2% to 98.3%
  • Turnover within the planning teams improved from 2 to 4.5 years
  • Forecast accuracy improved from 65% to 78%

 

Supply planning and manufacturing improvement

FMCG

Supply planning and manufacturing improvement

Mars is a global manufacturer of confectionery, pet food, and other food products with US$35 billion in annual sales across 180 countries. It is one of the world’s largest privately held companies.

After conducting an initial diagnostic of the end to end supply chain to root cause ongoing customer service issues, Supply Planning and Manufacturing performance were identified as areas for improvement in line with industry standards. We were asked to help them drive a customer mindset and introduce new metrics to ensure that both functions were aligned to deliver the service and agility expected by customers.

 

Our role

  • Roll out advanced safety stock setting tool for the UK market to deliver more accurate stock level by SKU
  • Review and update planning system parameters to reflect contribution and service level prioritisations accurately
  • Develop customer-centric supply planning and manufacturing KPIs and roll out for UK market
  • Assess and update manufacturing run rates to reflect true factory utilisation
  • Introduce freeze periods into manufacturing schedules

Results

  • Rolled out and embedded safety stock tool with a quarterly review period to incorporate seasonal demand
  • Increased capability and knowledge of supply planning team, allowing them to better manage risks whilst balancing cost and service
  • Initiated a new set of agreed KPIs in PDPs to delivery 98.5%+ customer service
  • New factory run-rate methodology rolled out across 16 factories in Europe to optimise scheduling and project true long term utilisation

Complexity management

global FMCG

Complexity management

Arla is a vertically integrated dairy company with a farmer co-operative ownership structure. The company operates dairy activities in Denmark, Sweden, Germany, the UK, Belgium and Luxembourg, and had a global presence through its numerous subsidiaries. Products are sold under such brands as Arla, Lurpark and Castello and include milk, cream, yoghurt, cheese, butter, spreads and milk powder, among others.

Poor product portfolio management had led to a proliferation of SKUs and degradation of margin. Changes in staff and communication issues also resulted in a poor understanding of manufacturing complexity.

 

Our role

  • Gain stakeholder agreement on the complexity factors to measure and how to rate them
  • Break down functional silos to focus on total cost to serve and profitability
  • Instil a “challenge everything” mindset to identify complexity reduction ideas
  • Develop a brochure to shape future customer choices

 

Results

  • Sustainable complexity management process with metrics implemented across all sites
  • £3.6 million of cost saving initiatives implemented
  • Avoided capex by releasing 5% capacity through changeover reduction and product simplification
  • Improved knowledge of complexity, manufacturing constraints and associated costs through training

 

Site planning and material flow

global drinks

Site planning and material flow

Diageo plc is a multinational beverages company. It is the world’s largest producer of spirits and a major producer of beer and wine.

The company’s bottling site had grown from 6 million to 35 million cases per year. Its previous peak season had seen significant issues with service levels and material flow. The company wanted a review of poor peak performance and recommendations for improvement.

Our role

  • Review the planning and material flow processes
  • Analyse performance to identify key improvement recommendations
  • Develop an improvement road map, prioritising the initiatives
  • Lead the implementation of the road map alongside the local team
  • Document ‘How-to’ guides and on-going performance metrics

 

Results

  • Increased adherence to the plan from 85% to 98%
  • Improved Overall Equipment Effectiveness (OEE) by 10%
  • Decreased excess stock on site by 20%
  • Reduced dispatch dwell time from 50 to 20 hours
  • Formal daily and weekly review meetings