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© IGD 2011 Musgrave and United Biscuits case study, December 2011
© IGD 2011
Musgrave and United Biscuits case study, December 2011
© IGD 2011
Background Musgrave , which trades as Budgens and Londis in the UK, operate through a
network of franchise stores and work closely with retailer partners to deliver sustainable and cost-effective waste solutions
Waste management is an important part of Musgrave’s CSR programme and the retailer has pioneered the concept of ‘one-stop-shop’ regional waste management contracts
As well as working with retail partners, Musgrave engages with its suppliers to reduce waste in the supply chain, one of these companies is United Biscuits
United Biscuits also has an extensive sustainability programme and works to
- Reduce carbon emissions and energy use
- Reduce waste sent to landfill
- Reduce water
- Reduce packaging waste
- Increase the use of environmentally friendly transport
Source: IGD
© IGD 2011
Key milestones
Through a collaborative programme, funded by WRAP and facilitated by IGD, Musgrave and United Biscuits established a dedicated team to identify the opportunities to reduce food waste.
The team did this by collecting existing KPIs to prioritise and undertake a detailed process mapping project.
Source: IGD, Musgrave, United Biscuits
© IGD 2011
Identifying the opportunities
Source: IGD
This process three key opportunities to reduce waste in the supply chain:
Improve promotions
management
Review the range
Stockless
© IGD 2011
Improve promotions management
Source: IGD, Musgrave, United Biscuits
Promotional lines represented over half (56%) of Musgrave’s food waste in value terms, with cakes, crisps, snacks and nuts identified as key areas to focus on.
Execution- Increase focus on initial stock
phasing into depot- Improved communications of
‘actual’ Vs ‘planned’ performance- Collaborative monitoring and
adjustment of orders- Focus on end of promotion execution and exit strategy
Review - Category team establish
post promotion review of the process and KPIs
- The learnings will be built into the next promotional
cycle
Planning - Work to one aligned process
- Better understand accountabilities along supply
chain- Earlier forecasting inline with
production planning- Establish weekly meeting to
improve communication
Strategy- Improve joint business
planning- Make the budget forecast
and assumptions more visible- Better alignment of
timelines
The dedicated team jointly explored the
issues that were contributing to waste in the promotions process
and established four new ways of working
© IGD 2011
What collaborative planning has achieved
Source: IGD, Musgrave, United Biscuits
Before
A lack of collaborative planning led to reactive fire-fighting and non-value added activities There was insufficient two-way communication and inaccurate information flows both across functions within United Biscuits and Musgrave and between the companies
Not a fair understanding and alignment of key business processes (e.g. Promotions and seasonal management) Unclear people structures and roles/responsibilities, with ‘silo’ mentality between businesses and across functions. Lack of visibility and alignment of commercial and supply chain strategies and some conflicting KPIs
After
The promotions process is now aligned both across different divisions within each company and between the two companies:
Musgrave and UB have an integrated process and timelineIndividual roles and responsibilities are understood and lines of communication are clearA collaborative planning and review process has been established to build continuous improvement and reduce non-value adding activitiesImproved alignment of strategic and commercial planningAn end-to-end approach has been established and promotions are measured across their lifecycle
© IGD 2011
Benefits of collaborative planning
Source: IGD, Musgrave, United Biscuits
By implementing this process, Musgrave has reduced product waste as a percentage of sales from 2.92% to 1.16%. Promotional line wastage has reduced from 19.5% to 6.3%.
© IGD 2011
StocklessWith cakes being the single biggest waste driver (at 39% of value), the team identified an
opportunity to move cake from stock-held to stockless and prevent approximately 14 tonnes of
waste each year.
Source: IGD, Musgrave, United Biscuits
Before
Cake is delivered into four of Musgrave’s depots twice a week and held for store-picking
AfterMusgrave worked with United Biscuits and other cake suppliers to move to flow through or stockless model:
Move from stock held to stockless so cakes are delivered to store on the same day as arriving at depotCompletely removes depots based ‘short-dated’ wastageRetailers and consumers get significantly improved product-lifeDrives promotional sales, improves availability and removes waste
The key constraint is that this initiative also drives additional transport costs, so the move to flow through needs to be part of the overall commercial and environmental plan.
© IGD 2011
Range review
Source: IGD, Musgrave, United Biscuits
United Biscuits and Musgrave examined the range and found that 60% of products sell less than 10 cases a week and account for over 80% of waste, in value terms
© IGD 2011
Identifying slow selling linesThe Musgrave and United Biscuits team analysed the wastage of low volume lines. It was found that
approximately 60% of the range is slow. The slow sellers represented around 25% of sales value, 13% of total
volume and over 80% of wastage at value and 7% as a proportion of sales
Source: IGD, Musgrave, United Biscuits
Low volume lines were driving waste mainly in the cakes and crisps/snacks/nuts category. There are some lines where the minimum order quantity (MOQ) drives more stock than stores will sell in the product’s life.
As a result of the review the analysis category teams now focus on the end-to-end value chain:
Consumer offerRate of sales and marginWastage and stock levelsMOQ versus volume
Improved reporting and dialogue is creating visibility to net profitability. This is driving better decision making for the existing range and new lines:
Opportunity to drive salesReview store distributionRemoving range where this is the best commercial decision
Silo ‘ways of working’ and KPI’s are being broken down. Decisions are increasingly based on all factors, including wastage. Five lines have been de-listed and this will reduce wastage by 0.7 tonnes per annum.
© IGD 2011
Results
Source: IGD
The Musgrave/UB team estimated an equivalent of 13,800 cases or 36.4 tonnes per annum of supply chain waste was prevented during 2010.
102 tonnes of waste savings and other benefits are anticipated for 2011 from improved forecast accuracy, range review, stock reduction and increased product life
The Musgrave/UB’s promotions process is now aligned both across different divisions within each company and between the two companies
Promotional line wastage has reduced from 19.5% to 6.3%.
The range review led to five lines being de-listed and greater understanding of waste is now used in the decision making process
© IGD 2011
About Musgrave and United Biscuits
Source: IGD
About Musgrave
Musgrave Retail Partners Ireland, which operates the SuperValu and Centra brands, is the largest co-operative retailer in Ireland.
In the UK the retailer operates through the Budgens and Londis brands
Member stores are provided with central services including purchasing, supply chain, category management, marketing, human resources and IT.
About United Biscuits
United Biscuits is a leading snacks business producing a range of sweet and savoury snacks including McVitie’s, Jacob’s, Carr’s, McCoy’s and Hula Hoops,
UB's strategy involves driving long-term sustainability in the business and encompasses three key areas: FinancialEnvironmentalCommunity
© IGD 2011
Further information
• IGD would like to acknowledge WRAP, Musgrave and United Biscuits in the development of this case study
• For more case studies on how retailers and suppliers are implementing improvement initiatives, please visit the case study section on Supply Chain Analysis
• Other case studies on Musgrave and United Biscuits featured on Supply Chain Analysis include Musgrave’s initiatives to reduced miles travelled and United Biscuit’s initiative with Nestle
• Subscribers can:– Gain further insight on supply chain strategy and planning, by reading our in-depth
reports here– For a detailed understanding of leading retailers’ supply chain strategies, click here– Read IGD’s best practice case studies on supply chain, click here
• For any other information, please email Nick Downing at [email protected] or call him on +44 (0)7730822274
