Kraft Foods Supply Chain Management Case Study
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Learn the whole new way of Kraft foods supply chain management with this case study provided by welingkar online. ...

Learn the whole new way of Kraft foods supply chain management with this case study provided by welingkar online.

Kraft Foods has streamlined its supply chain, and its benefits included a more efficient ordering and delivery processes, better management of resources and cost savings. They achieved this by building a Customer Service Excellence Programme to ensure that its products are in the right place, at the right time, in the right quantity, in excellent condition and at the lowest possible supply chain cost.

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Kraft Foods Supply Chain Management Case Study Kraft Foods Supply Chain Management Case Study Document Transcript

  • www.welingkaronline.org Kraft Foods Supply Chain Case Study Summary Kraft has streamlined its supply chain, and its benefits included a more efficient ordering and delivery processes, better management of resources and cost savings. They achieved this by building a Customer Service Excellence Programme to ensure that its products are in the right place, at the right time, in the right quantity, in excellent condition and at the lowest possible supply chain cost. Key challenges Consumers expect their favorite brands to be available on demand and to be of the highest quality. However, consumers are seldom aware of what it takes to get these products to us in prime condition. The immediate challenge faced by Kraft Foods’ Supply Chain function was contributing excellent operational support and delivering continued growth. Solution The stated Supply Chain goal of Kraft Foods is to 'exceed customer expectations in quality of product and service at lowest effective cost'. Kraft’s is a powerful brand that looks to add value and differentiate itself on the basis of its quality, values and a fostering of trust. To help in achieving these objectives, Kraft Foods rolled out a model named the “Service Excellence Programme”. Simply put, this model looks to enhance the customer service experience while at the same time reducing costs incurred as part of the Supply Chain. This is done via a series of concepts that creates a strong Supply Chain relationship between the company and its retailers. Kraft focused on delivering to their retailers, whenever they want it, wherever they want it. By listening to and being empathetic towards their retailers, Kraft Foods helped to manage stocks optimally, meet all seasonal variations in demand and responded quickly to supply constraints and bottlenecks. Kraft Foods developed a 9 point framework to build, implement and evaluate projects with the aim of improving day to day operational efficiency. They are concisely summed up as below. Perfect Ordering focuses on the perfect management of the exact retail requirement right from the moment an order is placed, then processed and finally delivered at the customer warehouse. The use of accurate data, sent at agreed timings with jointly agreed delivery windows helped facilitate this. Knowledge exchange involves a thorough understanding of the Supply Chain from end-to-end (including systems and processes) by all partners. This was achieved via simple explanations on the premises to job swaps. This helped build a comprehensive knowledge base of the systems, people and processes involved. E-mails and extranets have further smoothened the knowledge sharing process.
  • www.welingkaronline.org High quality Seasonal planning ensured that the Supply Chain coped with high volume special events such as Christmas, Valentine’s Day, the Olympics, etc. This included the sharing of historical forecast information, agreeing purchase quantities, arranging delivery timings and ensuring accurate product specification data is shared with all partners. To move stock rapidly and efficiently, a delivery interface was developed to help Kraft Foods and its partners understand each other's distribution operations. Once an order was placed with Kraft Foods, the order needed to be shipped on time as per requirements. This also helped reduce errors or discrepancies. Kraft Foods believed in the need for great people, without which managing a Supply Chain relationship is impossible. Professionalism, trustworthiness, helpfulness, passion and responsiveness were cornerstones on which the Supply Chain partnership was built, and it was made possible by the people involved. Maintaining optimal inventory is vital to satisfying demand. Holding excess stocks defeats the purpose of Supply Chain Management, and to optimize inventory trading partners needed to anticipate future demand so that the product is produced at the right time. Information on stock held at manufacturing plants and warehouses was shared with everyone, ensuring everyone acted upon the same information at all times. Also critical was data alignment, so that all partners have the same data about a given product. This will include but is not limited to product description, number of units in a case, number of cases on a pallet, bar codes, shelf life, etc. Increasingly, technology has proven to be a great enabler in sharing this information through extranets and online catalogues. Variant management is also of importance, for example when a promotional product forces a change. This also happens when new products are launched, demand or
  • www.welingkaronline.org product specifications change and it is important to manage change and keep service levels uniform at all times. The consumer is of paramount importance, as is consumer satisfaction. This is achieved by consistently delivering a high quality product and managing the experience expertly if a quality experience is not delivered. Optimal consumer satisfaction is achieved by constantly reviewing consumer complaints, the mechanism used to resolve it, product recall policies, and feedback mechanisms. Outcome Kraft Foods has been able to substantially improve the quality of service thanks to the implementation of this programme by: Improving the understanding of the Supply Chain. Smoothening the order and delivery processes. Better managing change. Making sure skilled people focus on the right tasks. Kraft Foods’ Customer Service Excellence Programme provides a simple blueprint for best business practice when it comes to Supply Chain Management. No matter whether you are an avid student or a businessman, Kraft’s approach to Supply Chain Management has something for everyone to learn and apply in the workplace.