Unlocking multimillion-dollar cost reductions and working capital savings for a leading mid-sized CPG brand through End-to-End Supply Chain Value Stream Mapping

It all started with the senior leaders getting varied perspectives and messages from different teams involved in the end-to-end supply chain. It seemed teams were operating in silos, defining success based on their own objectives. Additionally, concerns arose regarding inventory levels, safety stocks, and the overall cycle and lead times. 

To map out the current state and create a true picture it was decided to leverage Value Stream Mapping (VSM) for an end-to-end supply chain.  Value Stream Mapping provides a holistic view of material and information flows across the entire supply network, from raw materials to final customer delivery. This method would help identify inefficiencies, bottlenecks, and opportunities for improvement in lead time, inventory, and process standardization. 

Our Approach 

Besides a typical Value Stream Map, there were additional deep dives done to create a more realistic picture, backed with actual data to remove any doubts across teams

• Captured Leadership Concerns and Feedback through one-on-one interviews. For example – we have higher touch levels, can we keep it simple, things move quite a bit etc. 

• Mapped the end-to-end process steps starting from New Product Development team to customer fulfillment. This meant extending to additional functions which are not directly under the Supply Chain function. 

• Captured Lead Times, Wait times and Cycle times for every step 

• Resourcing at every function level along with high level volumes and productivity levels. This was done to share the resource distribution. 

• Tools and Technology being leveraged by each team.

• Key Performance Indicators (KPIs) for each team and whether they were aligned with Business outcomes.

• Certain hypotheses were formulated based on feedback from team members. Testing these was crucial in debunking functional misconceptions. 

• Validate findings with detailed data analysis. even creating a power BI dashboard giving the ability to functional teams to play around with the data.  

• Data was also used to expose the risk appetite of different teams which is an important in today’s agile world. 

 

Steps for Conducting End-to-End Supply Chain Value Stream Mapping

1. Define the Scope and Objectives 

• Identify the start and end points (e.g. New Product Development to Customer fulfillment). 

• Define key objectives (reduce lead time, improve inventory, eliminate waste, identify cost savings and productivity opportunities, build a transformation roadmap). 

• Gather stakeholders, existing process documentation and data from all teams involved in the end-to-end Supply Chain 

2. Map the Current State 

• New Product Development 

  • NPD stage gate process and the involvement of Supply Chain team at different toll gates 

  • Cycle time for Renovations and Innovations, workflow, work distribution and KPI’s 

• Commercialization 

  • Project volumes, success, cancelled projects and their root causes 

  • Stage gate process and deliverables at each stage gate 

• Suppliers & Procurement

  • Raw material sourcing process. 

  • Lead times and delivery frequencies by brokers and suppliers (Raw material & Packaging) 

  • Identify single source items and associated risks 

  • Opportunities for supplier collaboration, vendor and item consolidation 

• Planning 

  • Document the end-to-end planning process i.e. Demand, Supply, Material & Deployment 

  • Lead time considerations and the safety stock calculation 

  • Gaps in visibility 

  • Accuracy challenges and reasons 

• Manufacturing & Production

  • Processing steps, cycle times, minimum order quantities 

  • Adherence and Attainment trends and the schedule nonadherence reasons 

  • Portfolio distribution across Comans and inhouse production 

  • Coman concerns 

• Quality 

  • Items and reasons for quality issues 

  • Release timeline trends 

• Warehousing & Distribution

  • Storage locations, picking/packing times 

  • Utilization of warehouses 

  • Repack Operations at Warehouses 

  • Distribution network 

  • TL, LTL, Parcels, IM and opportunities for consolidations 

  • Transport lead times and costs. 

  • Opportunities to Implement Just-in-Time (JIT) principles to reduce inventory. 

• Customer Fulfillment

  • Order processing, lead times, and customer delivery expectations. 

  • Order processing issues and their broad buckets 

3. Data Analysis 

• Some of the data we analyzed closely included 

  • Shipments Orders (Transportation) 

  • Days of Supply at an item level 

  • Material Turnaround times by Suppliers/Brokers & Pricing 

  • Customer Operations issues 

  • Shelf Life at the time of delivery 

  • Micro hold and quality hold data 

  • Active, Completed and Cancelled Projects 

  • Reasons for non-Adherence (Manufacturing/Coman) etc 

4. Identify Waste, Bottlenecks and Improvement Opportunities 

• Excess inventory (Days of supply at an item level) and wait times. 

• Long setup times or defects leading to quality issues. 

• Inefficient transport or unnecessary movements. 

• Information flow delays and communication gaps. 

5. Develop an Implementation Roadmap 

• Identify and prioritize key improvement opportunities. Create an effort vs impact grid to help with that. 

• Assign responsibilities and set deadlines. 

• Identify Key Performance Indicators (KPIs) to track improvements. 

• Automate and leverage digital solutions where possible. 

While improving operational efficiency was a key focus, the broader objective was to enhance the organization's responsiveness. As the supply chain network expands and evolves, the challenge is to maintain agility and adaptability to market demands while striking a balance between desired outcomes and risk tolerance.