Snapple 2009 Annual Report Download - page 13
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strengtheningthefoundation
Over the past year we’ve invested heavily
in network infrastructure upgrades to boost
standardization and productivity across our
organization. Savings from improved operating
efficiencies have allowed us to reinvest in our
business and enhanced our ability to execute
well against our business objectives in 2009
and beyond. The process is ongoing, but we’re
pleased with our progress thus far.
Building a World-Class Supply Chain
To create a leaner, more efficient supply chain,
we've streamlined our operations over the
past four years from 28 U.S. manufacturing
plants to 19 as of the end of 2009. At the
same time, we've consolidated our warehouse-
direct distribution centers. As a result, working
capital for our supply chain network is down
for the third consecutive year.
Effective demand planning, vendor-managed
inventory and technology advances are
enabling case-fill rates of up to 99 percent
and reducing out of stocks. With a more
standardized and efficient warehouse-
direct delivery system, forecast accuracy
for demand planning has improved by 10
percent, and inventory obsolescence is down
more than 25 percent. As part of an ongoing
effort to rationalize our product offerings,
we eliminated more than 10 percent of our
SKUs in 2009. Our overall supply chain
operating efficiency measure is up more than
6 percentage points in two years.
With the safety of our facilities and our
employees paramount, we’re pleased that
16 of our supply chain facilities were accident-
free in 2009. In addition, the number of
lost-time accidents at our manufacturing
facilities is down 32 percent from 2008.
Investing to Boost Efficiencies
Our DSD upgrade to SAP 6.0 has occurred
seamlessly and is nearing completion.
The rollout will be extended to our Mexico
business and our warehouse-direct system in
2010. Likewise, our businesswide deployment
of a handheld order-entry system is almost
complete and is paying dividends in better
inventory tracking.
Outsourcing many of our back-office
functions, including our end-user IT services
in 2009, has also allowed us to crush costs,
standardize our processes and improve
service delivery.
Productivity Office
Our newly established productivity office is
allowing us to foster a continuous improvement
mindset and make incremental investments in
the business for long-term growth. Each year,
we’re setting aside funding that our teams
can use to invest in local and corporate
productivity initiatives. Ultimately, the
compounding of the benefits will result in
a program that is self-funding and a key
offset to inflationary pressure.
11
strengtheningthefoundation
strengthening the foundation
Our supply
chain operating
efficiency
measure
is up 6
percentage
points