Continental’s project has already paid off handsomely. Inventory turns in the food service business have doubled, and inventory obsolence went from about $1 million a year to almost nothing.
Food manufacturer fuels efficiency through supply chain
Continental Mills, a maker of bakery dry goods and consumer food brands such as Krusteaz, runs up to 175 different product SKUs on a single production line in a year. Besides trying to maximize asset utilization in such a fast-changing production environment, the company must also react to rapidly fluctuating prices for commodities such as flour and sugar. And Continental Mills must avoid allergen contamination when shifting lines from one product to another.
Who knew making pancake mix could be quite so complicated?
In 2008, Continental set out to overhaul its supply chain with the goal of improving asset utilization, reducing working capital, and more closely monitoring regulatory
requirements. The company rolled out Logility’s Voyager Solutions supply chain management software in an evolutionary manner, focusing first on demand planning, then moving on to inventory planning and production planning. So far, the project is live in one-third of the company’s facilities, and full implementation is expected by later this spring.
Continental’s Supply Chain Project has already paid off handsomely. The company can now view its capacity graphically, seeing bottlenecks, their causes, and solutions. Forecast accuracy has improved, leading to better inventory management. Inventory turns in the company’s food service business have doubled, and turns in the consumer/retail business have nearly doubled. And inventory obsolescence went from about $1 million per year to almost nothing. Lag between the change in demand and when Continental could respond with a new production schedule was 10 to 12 days; now, it is just a few hours.
The project has also improved collaboration inside the company, with the sales team more accurately and quickly capturing customer demand information and communicating that information to the production team.
Phase one of the project produced $3 million in reoccurring savings. The implementation of phase two is expected to have a payback time of less than a year.
In recognition of its accomplishments, Continental Mills received a 2011 PM100 Award for Supply Network Mastery.