ConAgra Shares 5 Steps for Building a Business Case
Most consumer goods organizations struggle to develop a sound business case for implementing technology or business process changes. During a recent CGT web seminar, executives from ConAgra Foods and GE Intelligent Platforms walked through the key elements required to successfully develop a business case for implementing manufacturing continuous improvement systems that are integrated to the supply chain. Together, they proved how doing so drives significant savings around reduction in inventory holding costs.
Peter Hock, senior director, Continuous Improvement at ConAgra Foods, also revealed real-world customer examples and calculations that can be used as a template for your own continuous improvement strategy.
Here are key highlights from the web event:
--Barry Lynch, GE Global Industry manager - Consumer Packaged Goods for GE Intelligent Platforms, kicked off the event by reviewing general trends in the consumer goods manufacturing industry.
“If we look at 2012, that was a tough year for consumer manufacturers, and 2013 is looking to continue that trend in the first half of the year,” said Lynch.
He named external pressures, like increase of cost in ingredients, packaging and logistics, and tied them into market financial pressures of increasing inflation. Additional trends that Lynch sees for 2013 include a demand for product innovation in packaging and portion size, fresh ingredient focus, mobile workforce increases demand for snack foods, and regulatory control, to name a few.
With challenges like these on the horizon, Lynch makes recommendations for what manufacturers can do about it, how to achieve measureable results, and what areas to tackle in order to drive savings.
--ConAgra’s Peter Hock shared examples of the financial savings possible when manufacturing is integrated into the supply chain. When pulling the business case together, Hock and Lynch emphasized five necessary steps.
1. Strategy: Understand your own company’s current strategic focus areas.
2. Production Costs: Understand the value of stabilizing the manufacturing process.
3. Holding Costs: Work with Finance and Logistics to quantify the essential holding costs for inventory.
4. OpEx Journey: Develop your business case and break it down into bite-sized chunks.
5. Business Plan: Finally, present your case. Use its success to drive the next initiative.
“If you expect to contract with someone outside to come and fix your problems and not take ownership of the processes and systems, and really build the capabilities and knowledge and skillsets in your operators, you won’t be able to sustain any gains,” explained Hock.
To listen to this event in its entirety, click here.
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