The new supply chain strategy starts from the consumer

Logistics and Supply Chain News

Mondelēz is one of the most well-known companies on the market. Their Covid-19 response stepped on a few pillars that assured business continuity and adequate response to consumers’ needs.

‘We spent a lot of time making sure that we have safety protocols and PPE for our staff,’ says Sandra MacQuillan, EVP & CSCO, Mondelēz International during the virtual Supply Chain USA, organised by Reuters. ‘We extended that to their families and made sure people understand what they need to do in work and outside it.’ According to MacQuillan that helped the company to protect its business and created a business continuity.

The company found that consumers went back to products and brands that they recognise and felt comfortable with. ‘We saw a shift away from our less known brands and back to those like Oreo,’ MacQuillan explains. That clearly put a strain on the supply chain as the company had to switch its portfolio almost overnight. Mondelēz worked on simplifying its portfolio and focusing on the products that customers knew the most.

Crisis advantage

‘We used the crisis to accelerate what we wanted to change in our supply chain,’ MacQuillan says about the move to simplify supply chain operations. The company is going to have a 25% reduction in its stock keeping units (SKUs). New product development also saw a decrease of 25%. By doing these changes the firm was able to rapidly respond to the changes in demand.

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Mondelēz has been looking at how e-commerce will affect their business for a few years now but Covid-19 brought a very rapid shift to online ordering. ‘We needed to refocus to make sure that we have the products at the right place but we haven’t changed our strategy,’ explains MacQuillan. Additionally, the supply chain had to look at what were the consumers’ similarities and differences on and off-line and how they can be reached through marketing campaigns and better operations.

MacQuillan says Mondelēz’s strategy starts from the consumer and goes all the way back to the producer. A nonnegotiable part of the strategy is sustainability and the pandemic has not affected the commitment to use the resources in the best possible way. ✷

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