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How the Cheerios Maker Tackles Supply Issues

2021-10-22T00:04:44.514Z

With around 20 factories in North America, the maker of Cheerios and Häagen-Dazs faces problems in the supply chain.



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New York (CNN Business) -

The global supply chain struggles under the weight of a series of disruptions, including a shortage of truck drivers and other workers, as well as massive port congestion.

The problems force companies large and small to rethink what they must do to keep factories running.

Like others, General Mills - which makes Cheerios cereals, Progresso soups, Häagen-Dazs ice cream and more - has had to get creative.

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With around 20 factories in North America, the consumer goods maker is used to supply chain problems.

Before the pandemic, the company saw about 50 problems a month, such as ingredient or packaging delays, that disrupted operations at its U.S. facility, said Jon Nudi, president of North America Retail General. Mills, in an interview earlier this month.

But lately, that number has been much higher.

Due to those pervasive supply chain issues, instead of the usual 50, lately there have been between 500 and 600 outages per month on average.

"I have been in this for a long time, almost 30 years, and I can tell you that it is definitely the most challenging and dynamic supply chain environment that I have seen in my career," said Nudi.

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General Mills doesn't get warnings when something is delayed, according to Nudi.

Sometimes that means "we have to close our lines until we get the ingredients we need," he said.

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To try to ensure that General Mills can manufacture its products despite shortages or delays, the company has established a "daily watchtower" where supply chain experts and other employees come together to try to fix problems. problems as they arise.

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Sometimes it is quite easy to make adjustments, as if a factory ran out of an ingredient that is stored elsewhere in the system.

"If [the people in the control tower] find out that our plant in Covington, Georgia is missing an ingredient, what they might do is look at the rest of our network and say, 'Hey, we have another plant in Cedar Rapids. , Iowa that has more of this ingredient than they need, '"Nudi explained.

"So we'll ride a truck and rush into that facility."

In that case, the Covington plant could be back in operation after a day.

But sometimes there are more complex problems, such as when ingredients are in short supply throughout the industry, and not just in one facility.

To help address these issues, the company has been working to add more suppliers, a process that is "much more complicated than you might think," according to Nudi.

"We have to really understand what the impact is on the product," he said.

"In some cases, labeling could be affected," in others, "the way products are created on a line could change due to a slight change in ingredients."

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Sourcing ingredients and packaging materials is a problem.

Another is that staffing is a challenge across various nodes in the chain, from distribution centers to trucking companies employing truck drivers.

So even if "we do everything right - we make a product, we bring it to our distribution center, we ship it - we still have problems," Nudi said.

A truck with General Mills products may arrive at the distribution center for a food retailer, only to find that the center does not have enough staff to unload the truck, Nudi said.

"As a result, the truck is rejected."

The problems are not causing massive outages as some shoppers saw at the start of the pandemic, when fear and uncertainty triggered panic buying.

"Generally, we have enough Cheerios, we have enough Betty Crocker desserts, to meet the demand," Nudi noted.

But, he noted, "there may be some specific interruptions."

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Source: cnnespanol

All news articles on 2021-10-22

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