Improve Delivery Performance-172

The Situation:

One of the premier North American ice cream manufacturers was experiencing increasingly competitive pricing in an already competitive market.  Coupled with their inability to consistently meet market demand, the paucity of forecasting information and process, and an enterprise resource planning system that had not been integrated; they found themselves producing products for which there was no demand, unable to fill orders in-season, and in a position where they had to continually change their production runs.  They asked The Highland Group to assist them in developing and implementing plans and processes to address these issues.

The Driver Goal:

• Achieve peak period customer service levels (April-August) of 98%
• Reduce inventory levels by 10% by year end
• Reduce landed costs by 2.5%

• Developed and implemented an enhanced production planning and inventory control process that supported more accurate forecasting and inventory planning
• Developed and implemented a project prioritization and rationalization process that focused resources on implementing those critical projects needed to integrate the enterprise resource planning system and support production planning, capacity optimization, and scheduling
• Re-engineered the equipment utilization, maintenance, changeover/set up, sanitation, and scheduling processes
• Developed labor efficiency models for direct and indirect labor
• Re-architected the distribution model to optimize inventory positioning, movement efficiency, and transportation channels
• Conducted a SKU rationalization determining profit contribution, consumer demand, pricing, channel and portfolio breadth and content

• Achieved customer fill rate of 96% during the project and will achieve 98% by year end
• Reduced inventories by 10% with an additional 10-15% projected by year end
• Reduced landed costs by 3%