Situation

• Bush's product line had increased 4x in 8 years and expected to triple in the next few years
• The new $350 million canning factory was out of capacity, limiting growth

Insight

• Changeovers were excessive due to rampant changes generated by the traditional supply chain management system
• Over 30% of total capacity was being wasted reacting to safety stock and forecast err

Recommendations

• Convert to Rate-based management in operations to eliminate safety stock
• Plan by product/market families to accomplish cross functional communication
• Use advanced simulation modeling and implement demand planning to replace single point forecasting
• Extensive executive and managerial education in IBP to change the thinking processes to implement a value delivery strategy throughout the sales and marketing organization

Results

• $ 25 million inventory reduction and a 100% reduction in overtime for a $2.5 million yearly savings
• The two factories have realized 20% capital free capacity availability, to use for growth