Supply Chain Blog Series – Inventory Optimization at Campbells Soup
Today at SapphireNow Mr.James Melly who provided a wonderful overview of the Campbell’s Company’s Inventory Optimization project.
First, James provided a quick introduction to the Campbells Company, explaining that they have an $8 billion portfolio highly focused in three core areas; simple meals, baked snacks, and healthy beverages. The company is organized into the following
- US Soup, Sauces and Beverages
- Baking and Snacking
- North America Foodservice and StockPot
- International Soup, Sauces and Beverages
Overall Campbells have over 26 worldwide brands of which 20+ are market-leaders. They operate in in 120+ countries with over 18,000 employees worldwide.
He then went on to discuss the scope of Project Maestro, that spans the breadth of the companies planning processes driven by a Sales & Operations Planning process that integrates the business.
- Demand Management capabilities that leverage consumer insights and collaboration with customers to improve forecast accuracy. Agile, flexible and responsive.
- Supply Planning capabilities across a network that reacts quickly to changes in consumer & customer demand.
- Business Intelligence that enables what-if analysis capabilities to allow planners to model multiple scenarios to drive
quicker, informed, and more optimized decisions.
- Collaboration and integrated relationships with customers and suppliers to leverage scale, improve information flow, and provide better responsiveness.
- Exception management processes and enhanced information delivery capabilities that provide greater insight into business performance
- Aligned metrics and Integrated Business Management to enhance collaboration between functions to drive improved profitability
- Significantly reduced “grind” through better processes, capabilities, skills and organization design
Inventory Optimization at Campbells
James then delved into the Inventory Optimization component of Project Meistro with involves the SAP Enterprise Inventory Optimization by SmartOps and APO. Campbells are currently utilizing EIO output to develop a static “Safety Time” value for use
in ECC. This approach is in use for approximately 70% of Active SKUs and the execution of the supply plan should result in an inventory reduction of over 5%. Campbell’s plan to be in a fully integrated state in Sept ’13.
James finished by giving some candid advice on the lessons learned:
- Be honest with yourself about your current processes. are they mature or not
- Quality of Master Data and Key Figure maintenance
- Improve quality of the Product Lifecycle
- Qualifications of your Supply Planners – Are they ready to manage inventory a different way?
- Know who in the organizational structure “owns the inventory” – Who has the authority to make the call?