Cadbury – Network Design
- Cadbury is the largest chocolate and candy brand in Australia and New Zealand since the nineteen sixties and manufactures the majority of their products in four key locations locally. Iconic brands include Cadbury dairy milk, Picnic, Freddo, Cherry Ripe, Boost, Pascall, TNCC.
- The objective of the Cadbury project was to design and implement the optimal logistics network for Cadbury in Australian & New Zealand to safely and efficiently support the customer service agenda. The network design study included all ANZ modes of transport and DC’s and resulted in the development and deployment of a new manufacturing strategy.
Supply Chain Cover was brought in to both project manage and execute many parts of the network design study. The SCC and client teams worked very closely together and through an interactive process modelled the cost, service and safety implication of over ten different network models each with multiple permutations. The scope of the study included all inbound (global) and outbound ANZ finished goods transport flows and all DC locations. The project also made strategic decisions around the “in-house or outsource” and the “own” versus “lease” solutions for the DC operation and assets.
- SCC led the project with a small team of seven expert client team members including finance, supply chain, regulatory, HR and IT.
- The network design went through an iterative modelling process where the cost, service & safety impacts for each model where considered.
- Through a process of elimination the team selected the optimal network design
- Through a strategic exercise of core versus non core activities we made decisions on outsourced and leased DC’s
After this extensive network study the project recommendations for the optimal ANZ distribution network and the business case were approved by the board in the UK, the business case included:
- The delivery of a 2.8 year payback from a $20m investment, an annual steady state cost reduction (2011) of $9m
- Long term (10yr) lease authorisation for two new distribution centres with a liability over the 10 year term of $46m
- The project was implemented successfully and the programme of work was completed on time, at cost and subsequently delivered all the anticipated benefits.