How the maker of Cheerios and Häagen-Dazs copes with hundreds of supply chain snafus a month
By Danielle Wiener-Bronner, CNN Business
The global supply chain is struggling under the weight of a series of disruptions, including a shortage of truck drivers and other workers as well as massive port congestion.
The issues are forcing large and small companies alike to re-think what they need to do to keep manufacturing facilities humming. Like others, General Mills — which makes Cheerios cereal, Progresso soups, Häagen-Dazs ice cream and more — has had to get creative.
With about 20 manufacturing facilities in North America, the consumer goods maker is used to supply chain woes. Before the pandemic, the company saw about 50 issues, like ingredient or packaging delays, that disrupted operations across its US facilities per month on average, said Jon Nudi, president of North America retail at General Mills, in an interview earlier this month.
But lately, that number has been way higher. Because of those widespread supply chain problems, instead of the usual 50, there have lately been between 500 and 600 disruptions a month on average.
“I’ve been doing this for a long time, almost 30 years, and I can tell you, it’s definitely the most challenged and dynamic supply chain environment I’ve seen in my career,” Nudi said.
A team of experts putting out fires
General Mills doesn’t get much of a warning when something is delayed, according to Nudi. Sometimes that means that “we’ve got to shut our lines down until we get the ingredients that we need,” he said.
To try to make sure that General Mills can make its products despite shortages or delays, the company has set up a “daily control tower” where supply chain experts and other employees huddle to try to fix problems as they arise.
Sometimes, it’s fairly easy to make adjustments, like if one factory is out of an ingredient that is well stocked elsewhere in the system.
“If [the people in the control tower] hear that our plant in Covington, Georgia is short on an ingredient, what they might do is look across the rest of our network and say, ‘Hey, we have another plant in Cedar Rapids, Iowa that has more of this ingredient that they need,'” Nudi explained. “So we’ll put a truck together and rush into that facility.” In that case, the Covington plant might be back up and running after a day.
But sometimes there are broader issues, like when ingredients are in short supply across the industry, and not just at one facility.
To help address these problems, the company has been working to add more suppliers, a process that is “much trickier than you might think,” according to Nudi. “We have to really understand what the impact on the product is,” he said. “In some cases, labeling could be impacted,” in others, “the way that products run on a line could change due to a slight change in the ingredients.”
Sourcing ingredients and packaging materials is one problem. Another is that staffing is a challenge along several nodes of the chain, from distribution centers to transportation companies that employ truck drivers.
Because of that, even if “we get everything right — we make a product, we get it to our distribution center, we ship it — we still run issues,” Nudi said. A truck with General Mills products may arrive at the distribution center for a food retailer, only to find that the center does not have enough staff to unload the truck, Nudi said. “As a result, the truck gets turned away.”
The problems are not causing mass outages like some shoppers saw at the beginning of the pandemic, when fear and uncertainty prompted panic buying.
“Generally, we have enough Cheerios, we have enough Betty Crocker desserts, to satisfy demand,” Nudi said. But, he noted, “you may see some spot outages.”
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