Reference

Fuelling 14 million dollars of annual cost savings in a regional FMCG business division's end-to-end supply chain
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Fuelling 14 million dollars of annual cost savings in a regional FMCG business division's end-to-end supply chain

Challenge

Detect insufficiently explored buckets of cost leakage within the end-to-end supply chain to fill an annual cost saving gap of 12 million dollar

Approach

Mobilizing unusual suspects to crowdsource valuable ideas, cross-functional workshops to examine ideas on feasibility vs. net saving potential

Results

Identification of an annual 14 million-dollar cost savings buffer with concrete implementation targets for the next year

Challenge

For a couple of years, a North American FMCG division has been running a successful cost reduction program, through which they assign a reduction goal to every brand and plant across the end-to-end supply chain. For 2016 however, the cost saving project pipeline still had a 12 million-dollar gap of annual saving potential.

As the supply experts had already addressed the most apparent cost reduction opportunities via traditional techniques (brainstorms, lean methods, six sigma sessions…), supply chain management considered new techniques to involve unusual suspects in Supply, R&D, and Marketing, to reveal beyond-trivial cost saving ideas, and to increase overall awareness on the running cost reduction program.

It's good deal: I pay a single project fee and I get 14 million dollars of savings

Challenge Owner Inspiration Game

Approach

To ensure bottom-up engagement of a large group employees on different plants and to capture their ideas on savings in production losses and primary & secondary packaging, Venture Spirit coordinated an on- and offline communication and gamification campaign. Based on the end-to-end supply process, all game ideas were analysed, and the most significant savings initiatives were distilled. Through cross-functional interactive workshops, the chosen ideas were examined on their feasibility vs. net saving potential.

Results

Through this gamified approach, Venture Spirit managed to mobilize 77 unusual suspects, crowdsourcing no less than 117 valuable ideas. The management was surprised to reach such an outcome in only 4 weeks’ time.

These ideas were further assessed, resulting in a joint creation of a 14 million-dollar cost saving project pipeline. The most relevant ones were assigned to project leads, who were given concrete implementation targets for 2017.

The collaboration and the input from the participants were way above our expectations

Challenge Owner Inspiration Game

Benefits

  • Identification of an annual 14 million-dollar cost savings buffer
  • Transparent views on (excess in) the entire P&L cost structure, thanks to a bottom-up approach
  • Increased awareness on the cost-reduction program; buy-in from all functional stakeholders across the end-to-end supply chain
  • Action learning of best practice methods for cost reduction, by applying them to one's own professional context