Free Articles From The Current Issue
At Kraft, cash is kingWhen Kraft Foods needed to cut costs and free up cash, its supply chain organization rose to the challenge. Better inventory turnover played a leading role in boosting cash flow by 20 percent.
San Diego—you need to be here!
Just about anyone who's involved in supply chain management will converge on San Diego for CSCMP's 2010 Annual Global Conference.
Germany gets top marks for international trade logistics
Germany tops the World Bank's ranking of nations' capacity to facilitate international trade logistics.
Companies struggle to build "cash culture"
Many companies that are fighting to free up cash in their supply chains have not taken the necessary steps to make that happen.
New book advises: Give both parties a stake in outsourcing
A new book says that 3PL relationships will improve when both company and supplier have a vested interest in each other's success.
Most Read Articles
Does your company need a supply chain SWAT team?
Our article titled "At Kraft, cash is king" on Page 38 details initiatives by Kraft Foods Inc. to free up capital in its supply chain. Back in 2007, Kraft's chief financial officer wanted to improve overall cash flow by US $1 billion. Since inventory ties up capital, the company's management determined that examining supply chain practices would be a good way to ferret out available cash.
However, because each of Kraft's 23 business units operates its own supply chain, there was no single solution that would work for all. So the food giant decided to educate each business unit about best practices and allowed the unit's leadership to choose the practices that were best for its particular supply chain. To help its divisional leaders find ways to liberate cash, the company recruited its own managers and experts to act as internal consultants. In short, Kraft assembled a group of experts for the task—what one Kraft executive calls a "supply chain SWAT team." (For readers who are not familiar with this term, SWAT is a law-enforcement acronym for "special weapons and tactics." A SWAT team usually is brought in to handle unusually dangerous situations. In business, it refers to a team of specialists called in to resolve a situation that local managers may be unable to handle.)
The team met with each business unit to analyze its particular proposesituation and ways to improve cash flow. In some cases, that meant changes to production, relationships with customers, and inventory holding practices. To motivate its managers to find and make these changes, Kraft offered them bonuses. Offering such incentives is an effective tactic, as a recent study described in this issue's "Forward Thinking" section found.
Indeed, Kraft's approach to solving its problem is one that any company might consider emulating: Instead of turning to outside consultants, it looked within its own ranks for the best and brightest to help lead the way. Tapping people who were familiar with the company's culture and understood the potential internal barriers was a factor in the project's success.
Although the challenge facing your supply chain organization probably is different than Kraft's, developing an inhouse SWAT team is an idea worth considering. Whether it's improving customer service, finding freight savings, or implementing carbon mapping, an internal team may just provide the solution to your problem.
We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter 1 2010: Does your company need a supply chain SWAT team?"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.
Want more articles like this? Subscribe to CSCMP's Supply Chain Quarterly.
