Supply chains are reducing complexity to better operate in volatile market conditions.

Published by Maria Charalambous on

       

Coca-Cola, Mondelez trim SKUs as CPGs tackle pandemic stresses

June 2, 2020 · Emma Cosgrove, @emmacos  · Supplychaindive.com

Supply chains are reducing complexity to better operate in volatile market conditions.

With 126 manufacturing facilities and 110 distribution warehouses worldwide, Mondelez has plenty of complexity to work with. But demand spikes and complexity don’t always mix.

“Our retailing clients needed us more than ever. They were seeing huge demands for the pantry loading,” said CEO Dirk Van de Put at an investor conference in late May. Revenue (excluding currency fluctuations) for the company was up 6.4% year over year in Q1, but “costs to serve” or operating expenses were up too.

Van de Put described the company’s supply chain as “resilient” on a conference call with analysts in late April, but conceded that the abrupt shutdowns around the world added difficulty to sales and distribution, and gross profit margin fell more than three percentage points. His plan to meet the moment was to do less to deliver more.

“We are working on making our business simpler,” the CEO said….

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