Our once-small, nimble snack brands customer had experienced its fourth merger in three years. They sought a trusted partner in Point B to prioritize and help with key supply chain-related initiatives. Our team was tasked with identifying the high-impact projects needed to optimize the company’s supply chain and its operating processes. With an objective lens and thoughtful analysis, we realized millions of dollars in potential savings to our customer and a better way to operate under its new parent company.
The company had been working with multiple manufacturing and warehousing partners, all of which had varied communication, production and billing processes. Their customers, largely retail chains and club stores, expected their ordering procedures and qualifications to remain unchanged following the merger. However, their pre-merger mode of adapting to each customer and partner created extreme inefficiencies – eating time and money. Employees were bogged down by manual tasks that added little value to the company. Our team also observed data was often inaccurate due to manual entries and inventory values were unreliable resulting in customer shortages. We also recognized write-downs and discounts of obsolete inventory due to over-production. To realize its potential, the company needed to cut wasted processes and step up its technological capabilities. Being under the wing of a parent company also brought its own set of challenges: Leadership from the parent company was not used to operating in a start-up environment where processes were not already streamlined and integrated with the latest technology. As a result, they did not grasp the barriers that kept our customer from immediately executing with the same efficiency.
Building Trust: Smoothing Out the Growing Pains
To align with the uniform practices of its parent company, our customer needed to do some supply chain groundwork before its operations fell into lockstep with its new owner. Point B was able to bridge the gap and help build the necessary foundation to work towards operational efficiency. With the added advantage of having helped with the merger integration preceding this project, we were able to effectively transition from the integration to post-merger activities with the customer’s full trust and candor, while anticipating the next steps.
Our Point B team brought food industry expertise and best practices to these challenges. We mapped the order-to-cash’s current state and provided a realistic, proposed future state. From the outset, we immediately started implementing this component of the order-to-cash process, eliminating more than half of the order-and-transfer portion of the process along with other improvements to require less steps. The invoice and purchase order practices needed a standardized electronic data interchange (EDI) across the partner network, which we helped set up. For inventory controls, we instituted a universal lot code format, and multiple reports for transparency to inventory levels that were previously unavailable.
Our customer also faced the important step of reining in its many co-manufacturers. We executed a request for proposal to gain supply chain efficiency across several existing, longtime manufacturing partners that had the capability to fulfill multiple product needs within our customer’s portfolio – realizing a simplified, cost-effective solution.
With barriers to efficiencies addressed, our customer can now perform more profitably and work smoothly with its parent company for years to come by:
· Eliminating unnecessary manual data entry.
· Identifying potential savings of millions in freight, product waste, operating expenses and resource hours.
· Cutting fulfillment steps, establishing an order foundation, and adding visibility to inventory for automated fulfillment and quicker invoicing.
· Identifying obsolete, post-merger inventory that could save the company even more money.
· Providing the necessary infrastructure for accountability within our customer’s co-manufacturers and warehouses.