Supply Chain World - Volume 7, Issue 3 - 126

food & beverage conagra brands inc.

are telling us what they think we should work on. The
first year we worked on joint-value creation, communication and the innovation pipeline. Joint-value creation
and innovation were really about using suppliers more
effectively. But I was chagrined to learn about our record
of communication."
He found the Conagra team was not great at doing routine communication with its suppliers, and O'Rourke saw
that as "a huge opportunity" to improve. For example, no
supplier wants a call from Conagra on a Friday afternoon,
saying it needs a different configuration on Monday morning because Conagra wasn't going to use its original order
during the next week. That gives the supplier little time to
run a new specification and load another truck, and it was
likely to incur a loss.
"There's a cost to those change- orders," O'Rourke
stresses. "We also found our demand signal wasn't always accurate, and so we could add incremental or detrimental orders quite suddenly. We found our feedback on
quality wasn't always as clear and concise as it could be,
even though we have a system to track that. This wasn't
just about procurement, so we had operations, planning
and quality folks involved. My simple value chain mentality is if there's a loss, you have to eliminate it and drive
it out of the system. Not having good communication
creates loss."
To resolve this, O'Rourke and others from Conagra took
a group of suppliers to one of its largest frozen plants, and
spent nearly two days finding ways to optimize communi-

Conagra rewards its approximately
50 locations for their sustainability
efforts, recognizing employee-led
initiatives that reduce energy
usage and waste.

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Supply Chain World VOLUME 7, ISSUE 3

cation and the operation, and also developing new ideas
for that facility. The Conagra team learned ways to use
suppliers more effectively, and this summer, it will take
other suppliers to a different plant to drive out losses and
gain efficiencies.
"We really focused on thinking of our suppliers as an
extension of our team and as an extension of the value
chain," O'Rourke says. "The alignment is amazing, and
it's become clear in the organization what the priorities
are and that we're going to do it. That is all incremental
to operational excellence, the cultural fit and strategic fit.
We still have to focus on the day-to-day work - if we can't
make the product to ship to our customers, we can't sell
it, for example." Today, the company regularly sets standard KPIs for its suppliers so it can measure and award
performance, while also creating joint business action
plans with them.
"It is a way to be more strategic with our key suppliers
to make them an extension of our key supply chain and
work with them on long-term goals," Biegger says, noting
that these have included productivity targets.
"We've also deployed working capital reduction goals
with how they can contribute by terms or inventory levels," he says. "That helps with our cash flow as a company."

Driving Innovation
Conagra's emphasis on working without silos has supported its focus on innovation. Instead of only relying
on its supply chain associates to roll out products and
get them on store shelves, it has brought them in at the
beginning of the product development process.
"We approach innovation with end-to-end thinking from the start. We design the product while taking
production capabilities and requirements into account,
so production processes can be optimized from the very
beginning," Biegger describes. "This gives us the ability
to deliver 'a vertical start-up,' and this helps us get to
market sooner." This way, when the product reaches the
plant level, it has already-proven and tested processes so
that the start-up itself can go more smoothly.
Conagra's goal is to cut the start-up time in half. But
the approach itself has already earned a positive reception. "The reaction from the broader organization is an
appreciation and value for us getting together to drive
innovation as one team," Biegger reports.
The company also tries to use current suppliers as
much as it can when innovating new products. "It's

Supply Chain World - Volume 7, Issue 3

Table of Contents for the Digital Edition of Supply Chain World - Volume 7, Issue 3