IBM Case Study
US Dairy Industry Leader Supply Chain Strategy and Network Optimization Overview
With annual sales of more than U.S.$44 billion, this Dairy Industry Leader is one of the largest processors and distributors of milk and other dairy products in the United States. The company sells milk and a full range of other dairy products under more than 50 wellknown local and regional brands and a wide array of private labels. Business need: The company looked at its supply chain and saw that it could do things better. Historically, the company lacked a centralized supply chain function. It had no direct authority over plants, limited supply-chain expertise and no common metrics or analytical frameworks to drive improvement. Without a wellconceived and closely managed supply chain, the company could not make informed competitive decisions about production, plant and distribution center (DC) placement, regions to serve and delivery options such as trucks and railways. Solution: The company looked at its supply chain and saw that it was spending approximately U.S.$11 billion on landed costs annually. To bring costs down, it targeted those for procurement, production and network operations by standardizing plant management, simplifying product portfolios, designing a better network and manufacturing the right products in the right places. To help it build a better network and locate plants and DCs, the company selected IBM® ILOG LogicNet Plus XE. The network optimization application has given the company a detailed interface for viewing the supply chain and its resources, a powerful solving engine for optimizing operations, and tools for analyzing the effects of key strategic decisions before, during and after their implementation. The company sees LogicNet Plus as an invaluable tool in the company’s effort to reduce annual landed costs by more than U.S.$300 million in the coming years. Benefits: •
Reduced landed costs Better plant positioning...
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