Case Study - Leading Food Manufacturer

The Scenario

This leading food manufacturer was the main supplier to all McDonalds, supplying 95% of goods to the McDonalds facilities in the UK. The network of 3500 McDonalds restaurants in the UK was supplied by 3 key Distribution centres, 2 of which had on-site bakeries for freshly baked product. The Distribution centres provided cross docking activities for up to 5000 SKU’s of Ambient, Fresh and Frozen products, as well as 1 day life cycle products such as bread.  The operation was also linked with a Dairy operation for other fresh products such as cheese and Milk.  The Network was complicated and ran a 24 hour operation in order to cope with the demand.

Key Issues

1. Service was not measured yet demanded, initial measurements showed complete and on time delivery at 40%
2. Cost of operation exceeded the cost to serve
3. Network was complicated and had a huge amount of duplication
4. No overall measures per site to understand the overall picture
5. Pick rates, throughput and management of capacity very poor overall for each centre
6. Line performance of production facility constantly causing delays
7. Stock rotation and overall inventory management very poor
8. Overall planning of transport, production and picking very poor

The Mechanism

After a 6 week assessment of the overall supply chain end to end WBS Group Consultants put in place a 4 pronged work-stream approach to achieve the following:

1. Put in place standard measures into all 3 facilities including a measure of the perfect order
   
   
2. Improvements in Planning in 3 key areas – Transport, Warehousing and Production
3. Improved stock management programme
4. Improved shop floor change programme – targeting on new measures such as Hygiene, Safety, productivity, Capacity management, throughput and setting in place basic disciplines

The Benefits

On completion of the programme WBS Group achieved jointly with the leading food manufacturer the following:

1. Improvement of service up to 85% (45% GAIN for OTIF%)
2. Savings in working capital 600k
3. Improved pick efficiency – 75% productivity gain by re-designing the layout of the pick faces
4. Improvement in transport utilisation – Load fills per vehicle up 23%
5. Overall improved focus by management team, morning meetings by video conference with key measures and focussing on cross-over, removal of duplication through collaborative communication

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