The challenge
With Latin America’s accelerating pace of change, companies such as Kellogg’s constantly need to adapt their go-to-market strategies, and the logistics resources and capabilities necessary to support end-consumer demand.
One of the key supply chain questions that the Kellogg’s leadership team faced was whether their competitive advantage in terms of manufacturing was enough to meet the challenges from competitors. An assessment of the first four management processes of the SCOR model — Plan, Source, Make, and Deliver — revealed an issue with planning, causing bottlenecks in the supply chain.
With a mostly new LatAm leadership team, Kellogg’s needed to build capability to effectively deliver the company’s products across the region to suit different markets, different consumer needs and through different channels. A TRACC assessment highlighted the lack of a clear strategy and connectivity across the various nonmanufacturing functions, most notably those in the supply chain environment.
Ranked by Forbes as one of the world’s most powerful and innovative brands, the Kellogg’s Cornflake Company began in 1906 with the Kellogg brothers who originally ran a sanatorium in Michigan, USA. Headquartered in Battle Creek, Michigan, Kellogg’s has a presence in 180 countries, with eight plants in Latin America; four of them in Mexico. Kellogg’s is now the world’s leading breakfast cereal manufacturer and the second largest snack company globally. It is also the leading producer of frozen foods. It produces a wide range of cereal products, including the well-known brands of Kellogg’s Corn Flakes, Rice Krispies, Special K, Fruit ‘n Fibre, as well as the Nutri-Grain cereal bars.
The solution
- Implement K-Lean to focus on four fundamentals
K-Lean — Kellogg’s continuous improvement program supported by CCi TRACC – focused on the fundamentals of food safety, people safety, and regulatory and product quality. - Shift focus to how to win and how to lead category and industry
‘How to win’ concentrated on customer service, financial excellence, product network and elevating the Customer Service and Logistics role, while ‘how to lead its category and industry’ focused on an end-to-end supply chain, manufacturing excellence, and customer service and logistics as a competitive advantage. - Move supply chain closer to customer and channel interfaces
One of Kellogg’s LatAm’s new strategic objectives was to improve go-to-market excellence by building stronger channel and customer capability. This included demand, supply, sales and operations planning, and supply chain alignment. - Establish steering committee
Similar to the implementation structure on the manufacturing side, a Steering Committee, comprising functional leads and headed by the Planning Director was established to identify and analyze the bottlenecks in the planning process.
The results
Kellogg’s successfully implement lean principles for supply chain planning
Having already established internal capability on the manufacturing side, Kellogg’s found that Lean principles are highly applicable to supply chain planning. Aspects of the implementation road map such as continuous improvement, teamwork, reducing lead times in people processes, etc. were already instilled, leading to a straightforward and structured transition to a lean supply chain.
94.5% reduction on unplanned orders and change requests in eight weeks
10% average uplift in plant service rates
50% increase in plant service rates in Brazil
From our client
“Creating an end-to-end demand driven supply chain and value network is the goal and ultimate source of competitive advantage. For a global manufacturing organization such as Kellogg’s, we believe that the AE TRACC completes the ‘Make’ piece of this end-to-end supply chain.”
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