The food business is complicated, but demand patterns are typically well-understood and fairly predictable. Supply chain teams in this sector are veterans of the trade, accustomed to complexity and high volume. What aren’t they accustomed to? Wild swings in consumption patterns and ingredient availability caused by an unforeseeable crisis.
The food business is complicated, but demand patterns are typically well-understood and fairly predictable. Supply chain teams in this sector are veterans of the trade, accustomed to complexity and high volume. What aren’t they accustomed to? Wild swings in consumption patterns and ingredient availability caused by an unforeseeable crisis.
For this highly successful multi-billion dollar and heavily private-label maker of a full range of snack foods and pastas, quality, efficiency, and cost are always in focus. While its ultimate customers are those pushing shopping carts down the aisles or placing online grocery orders, its immediate customers are the food retailers themselves.
The company’s supply chain team had always taken great pride in delivering on time in full to these major retailers. Pre-pandemic–by the company’s metrics–they were crushing it. But the chaos that ensued quickly began to expose existing issues. Feedback from customers also started to tell a different story, even before lockdowns began. What was happening, and why?
They needed to act quickly–and work differently–to stabilize and build agility into their operation going forward, particularly because the pandemic-driven changes to both supply and demand patterns were putting additional pressure on the system. The company’s CEO and head of supply chain knew they needed outside help to untangle the issue, and tapped Navigate to parachute in.
Digging Deep in the Data
Fresh eyes on existing data almost always unlock new insight; this occasion proved no exception. The Navigate team–in partnership with the company’s management–dug in by sorting, segmenting, slicing and dicing copious amounts of information from across the supply chain operation. SKU analysis, financial analysis, risk assessment … you name it, all benchmarked against industry standards.
The findings were clear. There were smart people, strong efforts, and great dedication across the enterprise, but the long-standing approach to supply chain planning began to have unintended consequences. Plans that were introduced to specific teams weren’t properly integrated cross-functionally. There was no structured, consistent evaluation of the plans, either. Data showed that this inconsistency was paired with a lack of understanding of supplier-specific KPIs, and no common system or dashboard to measure performance against supplier metrics. Add to that unpredictable demand and no clear, shared definition of success: there was much to untangle.
A classic case in point: Instead of a single dashboard related to supply chain performance, each team within the supply chain organization recorded quality exceptions separately. This focus on maximizing performance for their own teams was well-intentioned but obscured the more important matter of the end result for the customer. This siloed way of working also meant that teams weren’t tapping the considerable problem-solving abilities of the entire supply chain organization, working in concert.
Resetting, and Rewiring, Together
With clarity on the roots of the problem, the team moved quickly into solution mode. As with most knotty business problems, the momentum began with the teams inside the company now seeing the potential in–and the way forward–to working together differently. Relationships with retailers, and the health of the business, depended on it. (And so did millions of consumers, looking to fill their carts with snack foods and pastas to meet the growing demand for meals and snacks at home.)
First things first. The leadership team partnered with Navigate to align on a clear definition of success and carefully cascade that vision to each team across the company. From that point, success could be measured as a whole, from a single perspective. The answer to ‘how are we doing as a company?’ could now no longer differ based on who was asked. Next, they defined common KPIs and a winning scoreboard to measure performance against customers’ own metrics.
This work set the stage for what followed: a soup-to-nuts redesign of the sales and operations planning (S&OP) process. Siloed no more, teams worked with Navigate to create the underlying strategy structured to eliminate bias. The key to this? Separating the demand plan from the sales and financial plans. In painting a clear, vivid picture of the demand for product, teams could work to filter out the sales and financial noise, and determine what customers truly needed.
Together, they decided which systems and methods could stay and identified the gaps. They developed new tools and set about integrating various improvements. In the early launch period, the Navigate team provided capability and capacity, but the supply chain teams quickly took the baton and leapt fully into their new and highly collaborative process. The net result of this work was–at last–a process that enabled the right people to work together across the supply chain to focus on all the right issues: for the good of customers, the company (and yes, shoppers).
Fit for What’s Next
Supply chain pressures persist even as the pandemic has waned, but the company is now aligned on what success looks like, has clear visibility into customer metrics, and is able to harness the power of the full team with its new S&OP process to deliver on customer expectations. In the words of one leader, “We now actually have the forum and data to make critical decisions. Before that, we were flying totally blind.”
But as the pandemic and other world events continue to disrupt supply chains across various industries, organizations must improve their flexibility to respond accordingly. When the going gets tough, it can be tempting to just keep working harder at what you’re already doing. Real courage–exemplified by this company–is required to do the opposite: to re-evaluate, reset, and rewire. A more challenging route, certainly, but one with far greater rewards. For this major manufacturer, the rewards include new resilience and agility across the supply chain to adapt to meet customer needs, even in uncertain times.
Supply chain pressures persist even as the pandemic has waned, but the company is now aligned on what success looks like, has clear visibility into customer metrics, and is able to harness the power of the full team with its new S&OP process to deliver on customer expectations. In the words of one leader, “We now actually have the forum and data to make critical decisions. Before that, we were flying totally blind.”
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