Page 41 - Case Study Annual 2018

LAA Silver Award
development analysts, project management
and industry experts. The team interviewed
30 KraftHeinz staff members, which touched
every aspect of their supply chain. This included
sales, procurement, imports, the S&OP process,
warehousing, distribution, 3PL suppliers and
return logistics.
The SVA team focused on two primary
aspects of the KraftHeinz supply chain, including
the ‘ambient’ or non-perishable product line
such as bottled and canned product situated
in Wellington Western Cape, and the ‘frozen’ or
perishable product line, which included pies and
pastries, situated in Atlantis Western Cape.
All interviews were conducted with complete
confi dentiality; this allowed employees to
speak their mind without any fear of reprisal or
victimisation. This is the only way to understand
the underlying cause of supply chain failure
and how to rectify productivity constraints and
supply chain waste. CEVA Logistics used this
information to plot the current supply chain,
identify all supply chain constraints and develop
solutions for a future supply chain through cost
savings.
The solution
Within three months from start to completion,
CEVA Logistics provided a solution whereby it
would focus on:
• Reducing stock holding in 3PL network through
utilising bulk storage facilities in Western Cape
and Gauteng at reduced rates.
• Focusing on all full truckload distribution from
factory to 3PL fi nal mile distribution, as well as
direct loads into DCs.
• The ability to measure and track cost savings
through 4PL control.
The CEVA Logistics solution focused on
the implementation of a Control Tower at the
The Logistics News Case Study Annual 2018
KraftHeinz ambient facility in the Western Cape,
which was designed to operate as a separate
entity, so that it remains totally objective and
unbiased in all decision-making and management
of the supply chain. The staffi ng of the Control
Tower consisted of a mixture between CEVA
Logistics staff and KraftHeinz supply chain staff ,
but with management and control under CEVA
Logistics.
Operations and day-to-day activity focused
on warehousing and stock holding reduction,
forwarding and clearing, transport and transport
management, POD control and increasing
cash fl ow, SOP implementation and process
management and 3PL management and control.
The Control Tower cost structure operates on
a fi xed monthly management fee as well as an
agreed ‘Gain Share’ option through continuous
improvement opportunities to reduce waste from
the supply chain and achieve cost savings, and
improve cash fl ow.
The Control Tower has now been managing
the supply chain for six months and has achieved
substantial savings. Over and above the savings
and cash fl ow improvement, there was a marked
improvement in service levels from KraftHeinz
into the 3PLs, and from the 3PLs into the trade.
This is by far the most important improvement
as it directly impacts revenue, market share and
brand image.
The way forward
The goal remains to continuously analyse
the KraftHeinz supply chain and to identify
opportunities to reduce cost, increase cash fl ow
and increase profi tability for the customer. CEVA
Logistics believes this can be achieved through
fl exibility in terms of internal strategy changes at
KraftHeinz and CEVA Logistics aligning to these
challenges and changes. •
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