Supply chain management has long been viewed as a support function humming along in the background; brought in only after the big decisions around sales, new products and markets have already been made.
But what if supply chain managers were consulted as the business strategy was shaped? The concept has been tested and proven at General Mills Canada Corp of Mississauga, a manufacturer of cereal and related food products.
Supply chain has a voice in the C-suite at General Mills, and the results are impressive—sales are up, inventory is flat, and service levels continue to improve. What’s the trick? That’s what delegates at the recent Supply Chain & Logistics Canada conference came to learn, and they weren’t disappointed.
“We’re at a time here where the supply chain voice has never been more capable, more credible or more necessary, so it’s really up to us how we’re going to leverage that opportunity,” said Fiona Renzi-Fantin, director of logistics and planning with General Mills, during a presentation at the conference.
Her team leveraged the opportunity by coming up with a bold idea. “We said we would not be purchasing any more outside storage. It really made people nervous…were we going to have [boxes of] Cheerios on the side of the road?”
Through diligence and cooperation with forecasting and sales, however, the team managed to eliminate outside storage as promised, reduce safety stock, while growing sales and improving overall service levels.
“We gained a very collaborative relationship with [sales and marketing],” said Renzi-Fantin. “Gone are the days when we’re finding out when the orders hit our system that we’re going to be out of inventory.”
Looking back on the situation, Fiona points to best practices that can be applied anywhere. She advised delegates to bring ideas forward, instead of waiting for instructions from sales and marketing.
“Take initiative in meetings so you’re seen as innovative; not just a support function,” she said. “But we can’t go into a boardroom with a crazy idea. It has to be based on fact…We have to take the first step to show we understand more than our own [function] and how we interact with other [components] of the business.”
Supply chain practitioners must also be ready to show they’ve studied the risks and drafted a mitigation plan. A longer-term view is another key, she said, emphasizing the importance of seeing beyond the next delivery.
“We’re starters and we’re finishers. That’s what we do. We get the job done…[but] your supply chain needs to be more than flawless execution…You have to ask yourself how much time are you going to spend on [business] strategy?”
She advised delegates to shape a three- to five-year plan, involving succession planning, mentoring, and trading off talent between supply chain and other functions such as sales, marketing and forecasting. The plan should also include targets and metrics such as cost savings, inventory and service levels.
“You can’t start out with a three-year plan and abandon it in two years,” she added. Once the plan is in place, managers should make time to re-visit it, even through the hectic day-to-day, and ensure projects and people are aligned.
That kind of senior-level thinking cultivates a voice at the boardroom table, and as General Mills has demonstrated, tangible savings and innovations across the organization.