Procurement Reset at Kraft Heinz

Procurement Reset at Kraft Heinz

 

Procurement is expected to become a strategic weapon for Kraft Heinz.

Beset by poor management and financial misconduct, procurement had become an embarrassment for Kraft Heinz. Under the direction of Marcos Eloi, the new Chief Procurement Officer, the department is being revamped and repositioned as a major cost savings contributor within the supply chain. Centralization, automation, and collaboration are the main characteristics of the transformation that Kraft Heinz touts as game changing, but that skeptics view as perhaps insufficient to deliver the results expected by the company.

 


Video Spotlight: Kraft Heinz’s CEO Describes the Shift in Strategy


This post is based on the Supply Chain Dive article, The Kraft Heinz Procurement Overhaul Is Here, by E. Cosgrove, September 24, 2020, and the YouTube video, Heinz CEO Discusses Selling off Cheese Business and the Company’s Reset Strategy, by Yahoo Finance, September 16, 2020. Image source: Comstock Images / Alamy.

Discussion Questions:

1. Describe the major aspects of the overhaul. Are they aligned with Operations’ competitive priorities (cost, quality, delivery, and flexibility)?

Guidance: The overhaul involves: 1) a decrease in transactional sourcing, 2) a reduction in internal manufacturing capacity and a heavier reliance on outsourcing, 3) Continue reading

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Reducing Emissions From Burps to Burgers

Reducing Emissions From Burps to Burgers

October 5, 2020

Fifty years ago, the Economist Nobel Laureate Milton Friedman wrote an article in the New York Times Magazine in which he stated that organizations cannot have “social responsibility”; only individuals can.  The role of a private corporation is to maximize shareholder value while acting ethically and within legal constraints.

Today, business leaders increasingly have a larger viewpoint of their responsibilities, referring to “stakeholders”, which includes customers, suppliers, employees and communities in which they operate.  On occasion, the sometimes disparate goals overlap, and a company can do good while also serving shareholder interests.  The use of Agolin as a natural feed additive represents one such example.

Livestock represent a significant contributor to greenhouse gases, at 14.5% of global emissions (2/3 from cattle).  With the U.S. representing the world’s largest beef consumer, American cattle herds’ burping and flatulence represent a big share of pollution.

Agolin is a natural feed additive that inhibits animal gas and may increase production.  Already demonstrated with growing use in Europe, American farmers are just starting to experiment with the new feed as new competitors enter a market poised to reach $1 – 2+ billion by 2030 (or faster by other estimates). Continue reading

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Walmart Drone Deliveries Take Off

Walmart Drone Deliveries Take Off

October 5, 2020

Walmart is partnering with drone delivery provider Zipline to make on-demand deliveries of select health and wellness products in the United States in early 2021.  Zipline is known for medical drone operations in Africa.

Walmart also has a pilot project to delivery grocery and household products with automated drones from Flytrex. This is in response to Amazon obtaining FAA approval to test its own Prime Air delivery drones.


Video Spotlight: 


This post is based on the CNBC article, Amazon and Walmart’s emerging delivery drone battle escalates with Zipline deal, by Riley de Leon, September 14, 2020, and the YouTube videos in the Spotlight. Image source: Flystock/Shutterstock

Discussion Questions:

1.  What additional operations processes will need to be designed to support drone delivery for most companies in the future?

Guidance: Students should readily note what can go wrong with a drone delivery.  What happens if a drone malfunctions along the route?  What happens if someone interferes with the drone’s flight path?  How would Continue reading

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