Conagra Brands reimagining and renovating its supply chain
By Keith Nunes, Food Business News
CHICAGO – Conagra Brands, Inc. plans to deliver $1 billion in cost savings over the next three years as it renovates and updates its supply chain. Dubbed “fuel for growth,” the initiative will encompass production, logistics, margin management and new capabilities.
“By implementing a fuel for growth program, we will accelerate productivity over the next three years,” said Alexandre O. Eboli, chief supply chain officer, during the company’s July 27 investor day presentation. “From a historical average of 2% to 3%, we expect to accelerate productivity to achieve 4% of cost of goods sold by fiscal year ‘25.”
Conagra’s supply chain encompasses 42 plants and 25 distribution centers with 15,000 employees that produce more than 5,000 products and account for 80% of the company’s volume. External partners make up the rest of the volume.
Five components will support the program, including optimization, productivity, agility, people and a focus on sustainability. Perhaps the most significant impact will be felt in logistics, said Mr. Eboli.
“Today, we have 25 distribution centers supporting our business,” he said. “We will reduce our distribution centers by 50%, while at the same time, leverage best-in-class logistics operators to provide automation that will allow facilities to run 24/7, service our customers and optimize our costs.”
Mr. Eboli used a distribution center in Atlanta as an example, noting that the site now combines a Conagra and former Pinnacle operation in the Southeast.
“This is a 24/7 fully automated distribution center operating with 50% fewer people than a traditional warehouse,” he said. “Only in this location we are expecting to deliver $3 million in savings in warehousing cost per year...