Supply chain process reengineering in the food industry.

Background

A global branded confectionary manufacturer recognised that replenishment planning was functionally orientated, with little visibility of costs across the supply chain. The result was high inventory and distribution costs coupled with lower than expected service levels.

Objectives

• To utilise Time Based Process mapping to establish the replenishment planning process.
• To cost the supply chain processes for source, make and deliver utilising Activity Based Costing.
• To identify the cost trade-offs that exist between manufacturing and distribution.
• To identify areas for improvement and priorities.

Results

• A range of improvement projects were identified.
• The re-assessment of the manufacturing Economic Batch Quantity led to significant reductions in supply chain costs.