How a frozen-foods powerhouse kept their cool on the way to being #1

EY teams also assessed the frozen-food producer’s existing equipment, manufacturing efficiency and continuous improvement processes alongside alliance partner Procter & Gamble (P&G). The team’s zero-loss analysis identified over $175m in value from incremental cost savings and profit margin, saving millions that can now be devoted to new capital investments in production lines.  

Finally, EY teams analyzed logistics to identify cost-improvement areas including transportation and warehousing, vendor sourcing, network design, and redundant shipments. An evaluation of non-value-add activities revealed that some products were being handled as many as five times before reaching the consumer. By removing unnecessary manual tasks, products can now reach their destination more efficiently with only a single contact point.  

Overall, EY teams consolidated distribution centers, shortened shipping times, optimized distribution, and altered freight sourcing options, realizing cost-saving potential of up to 27% of their annual logistics spend. 

“Our team zeroed in on the key areas to make a significant impact, focusing on the fundamentals of complexity reduction, productivity improvement and cost savings,” said Chris Cookson, US West Supply Chain and Operations Consulting Leader, Ernst & Young LLP. “By focusing on these core areas, the client has built the foundation for success in their supply chain and transformed their business.”  

EY teams’ strategy optimized the supply chain end-to-end, strengthening its flow of goods, logistics and manufacturing to meet consumer demands during the pandemic and beyond. 

The EY-P&G Alliance and its Integrated Work System (IWS) provides a leading-in-class solution that will empower the company to deliver on future demands. This IWS solution engages 100% of the workforce through new digital tools, lowers manufacturing costs, and defers over $400m in capital investment. A healthier inventory model simultaneously reduces overall inventory levels while improving customer service. New digital dashboards provided by the IWS solution help managers across the organization eliminate redundancies, reducing baseline costs by $20m+.

The new supply chain solution EY teams helped in delivering for this frozen-foods powerhouse has accelerated the company’s growth strategy around the globe. With a more streamlined portfolio and efficient supply chain, it can now focus on demands beyond the basics - such as shipping directly to customers, elevating service levels and increasing flexibility. 

Next up, a multiyear SAP implementation that will allow EY professionals to continue to help this distributor reach the top of the frozen-food chain. 

Results

•  $175m in incremental cost savings and margin uplift within the first five years
• $20m reduction in logistics costs realized
• $400m potential cash deferral for three-five years
• 20% reduction in SKU system so that inventory and distribution matched demand
• 27% realized cost-savings potential of annual logistics spend
• 15% potential capacity increase across the manufacturing network
• 100% of the workforce engaged