SUPPLY CHAIN TRANSFORMATION

Situation

One of the world’s largest confectionery companies wanted to radically improve their supply chain performance in parallel with a global restructuring effort. The company faced immediate cost pressure from increased commodity prices, making near-term cost savings a necessity for their reorganization. Organizational leaders spearheading this effort faced several challenges, including:

  • Fatigue in their supply chain from the continuous ask to drive more improvement where the company’s established internal improvement group had already looked and delivered.
  • The need for immediate profitability growth while simultaneously investing in a company-wide culture change.

Organizational leaders brought Stroud in to help chart a new path and inspire change through rapid, large-scale improvement across the supply network.

 Leading with Results

Company leaders believed that a faster rate of improvement was both necessary and achievable. They needed their organization to share this belief and actually go and achieve it. The organization and Stroud set out to transform the performance of the supply chain by tackling the toughest challenges that would unlock the greatest change.

They piloted the transformation by going after the company’s toughest long-standing technical challenge, a multi-million dollar waste source at the best performing facility. The organization had tried and failed several times to solve this waste problem, leading to the view that it was “just a part of the process.” By applying a new approach to solving the problem, the team was able to implement a capital-free solution that eliminated the issue in 8 weeks. Solving this problem did more than reduce plant-wide waste by over 50% and drop $1MM in savings to the bottom line, it began the transformation of what the broader organization believed was possible.

Using Excitement to Drive Change

Organizational leaders leveraged excitement from the pilot project to build momentum for further engagement across the supply chain. Leadership challenged each facility to seek out and challenge the opportunities they viewed as impossible to solve. By leveraging Stroud’s strength in tackling the toughest operational challenges the leadership team helped guide their people to find and resolve the biggest opportunities for the business and transform the cultural mindset and capabilities to drive improvement.

The supply chain transformation increased profitability 15% over the next 18 months by delivering $46MM in operational cost savings. In the years following our engagement the company has sustained the cultural belief that more is possible and has driven further top and bottom-line growth allowing the company to consistently exceed earnings of their comparative industry index and the S&P 500.