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.