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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Forecasting Halloween During a Pandemic

Forecasting Halloween During a Pandemic

September 20, 2020

Tricky forecasting leaves chocolate companies wondering how candy sales will fare this Halloween.

Mars’ time horizon for planning for the Halloween season spans two years, yet no one could have known how different things would be this year because the pandemic.  For Hershey, Halloween spending comprises ten percent of annual sales.

No one is sure right now if “self-consumption,” when people buy Halloween candy to eat themselves rather than to distribute to others, will be enough to fill the gap of sales lost from trick-or-treating.


Video Spotlight: 


This post is based on the Fortune article reposted to Yahoo Finance, How scary will a COVID-19 Halloween be for candy companies?, by Beth Kowitt, August 29, 2020, and the YouTube video in the Spotlight. Image source: Shutterstock / Sandy Morelli

Discussion Questions:

1.   What role does aggregate planning play in the current availability of candy for Halloween of 2020?

Guidance: Many companies have a long planning horizon.  In part this may be to ensure adequate supplies of materials and resources when it comes time to manufacture product to meet demand. In addition, manufacturers need to Continue reading

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