A leading CPG in Australia benefits from $10.6m cost take out through business streamlining and ways of working redesign
Our client is a leading pet food manufacturer and distributor in Australia and China. They are the innovators in the pet food industry and are passionate about delivering good nutrients, textures and flavors to our furry little friends.
The client was at crossroads because of internal and external pressures. The external pressures included inflation, COVID induced supply chain issues, aggressive competition, and customer price sensitivity. Internal pressures included inconsistent understanding of strategic vision, SKU proliferation, unsuccessful NPDs, inefficiencies in demand forecasting and logistics planning, manufacturing inefficiencies and ineffective ways of working. These challenges were causing revenue leakages, spiraling costs, bottom line erosion, and employee fatigue.
A cross functional UST team including supply chain SMEs, commercial analyst and consultants across operating model, and process/ data advisory worked closely with client C-suite executives and functional heads for the 8-week engagement.
The first 6 weeks comprised the discovery and analysis phase during which the team first identified and quantified cost leakages and operational inefficiencies across the client value chain, and thereafter worked closely with client stakeholders to iteratively calibrate the opportunity value. In parallel, process and technology gaps and change inhibitors were also identified and qualified. The last 2 weeks were utilised to devise recommendations, prioritise initiatives and create an execution plan for these opportunities to improve EBITDA and enhance the ways of working.
The roadmap provided had two phases of implementation:
Phase 1 focused on immediate cost take out and governance changes with client value benefits of circa. $10.6m to be realised in 2022. These initiatives included
- SKU and brand optimisation,
- Improve CAPEX & trade spend RoI and
- Optimise freight costs across carriers.
- Operating model improvements across NPD stage gate processes, range review process, demand planning process and manufacturing processes.