Background
VandenBergh
Foods Supply Chain had two distinct parts, an extensive
range of consumer products sold through the supermarket
retail trade and a comprehensive range of products for
the UK food manufacturing industry. Apart from large versions
of the consumer products, the industrial products had
specialised formulations to meet their specific needs.
These products were made at two UK sites: one North, one
South and intermediates were manufactured at both sites.
The industrial customers were focussed in northern England.
The strategic review, forced by the need to justify the
replacement of the train used to transport intermediates
across the country, was to reduce the total distributed
costs of products to the customers, including the cost
of acquisition.
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Activities
·
The as-was supply chain was mapped in detail
The associated costs with each leg of the process was
mapped. This involved collecting cost details in a different
format to the management reporting reports
· A model of the supply chain was built to allow
the costs and investment returns of each stage of the
supply chain to be calculated
· What-if models of the potential alternatives
were then analysed. These models covered raw material
and packaging acquisition, manufacturing costs, intermediate
distribution costs, warehousing and distribution costs
to all customers
· The costs of re-organisation were factored into
the analysis |
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Outputs
A detailed
analysis of three alternatives covering:
· Current supply chain map and costs
· Investment required for the recommended route
and one alternative
· Savings to be realised
· Implementation plan covering 3 years |
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Results
·
A strategy that focussed the manufacturing and supply
chain organisations along market lines
· An 8% reduction in the capital required to service
the market
· A 25% reduction in distribution costs, both internal
and to customers
· A 20% increase in customer service (with other
measures)
· Enabled a reduction in stock-holding
· A route to make further savings |
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