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Bega Cheese: getting day one ready for Vegemite business

Bega Cheese: getting ready for Vegemite business

When Bega Cheese bought Vegemite it needed to ensure that it was ready to deliver product to customers from day one. KPMG stepped in to help by creating a future Supply Chain Strategy and developing a Target Operating Model that would ensure product continued to be delivered to retail stores, keeping customers happy.

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Toast with Vegemite

Challenges

When Bega Cheese acquired the Vegemite business from international food company Mondelēz, it needed to establish an end-to-end supply chain for Vegemite that would operate seamlessly from day one, with minimal impact on customers. 

It also needed to prepare for the storage and distribution requirements of Vegemite, for both chilled and ambient products, and needed to train staff and hire key management roles.

Bega only had a short time until handover day, and it knew the consequences for failing to have product ready for shipment would be strong. The major supermarket chains in Australia could mark against a brand for missing deliveries, and three marks could see the range removed from shelves.

KPMG was engaged to help Bega achieve day one preparedness in two phases. 

The first was to design and develop a Supply Chain Strategy in the form of a Target Operating Model, that outlined the necessary supply chain and logistics processes, systems and operational capabilities required. 

In a 2nd phase, the team implemented the Target Operating Model, which focused on identifying and contracting suitable third party logistics providers in the areas of inventory optimisation, enhancing the outsourced logistics facility layout and design, operational process improvement, and preparing a future state organisational structure for the Customer Service and Logistics (CS&L) team, including job descriptions.

Solutions

KPMG stepped in to help design and develop a future state supply chain model, including processes, technology enablers, and external partnerships. 

The team developed end-to-end Order to Cash (OTC), Procurement to Pay (P2P), and Make to Stock (MTS) processes aligned to the American Productivity & Quality Center (APQC) framework.

KPMG then implemented and executed the supply chain model, found suitable supply chain partners, and established the Target Operating Model for the CS&L network of the business unit. This included designing the roles that needed to be filled, and writing job descriptions to fast track recruitment of key staff. 

KPMG also supported the CS&L team to ensure correct system set-up, efficient order releasing, and key account management. KPMG acted as an escalation point for all parties in the supply chain, providing advice and introducing operational efficiency. 

The result was a newly set up, accredited warehouse, a fully operational end-to-end supply chain, an adequately trained CS&L team, and new staff hires on track.

Insights

A key to success was aligning the targeted business model to the APQC framework. This not only helped develop trust in the methodology, but resulted in Bega gaining international accreditation that can benefit its exports and trade. 

The use of the APQC framework has been highlighted by ALM Intelligence as a reference point for their ranking of KPMG within the top quartile of consultants for logistics capability. 

The project’s success was also thanks to the breadth of capabilities, skills and experience that KPMG can draw upon. Professionals from across KPMG were involved from supply chain operations, transportation and logistics, LEAN manufacturing, business change, technology, procurement, tax, and contracts.

The next step for Bega’s ownership of Vegemite is optimisation and driving efficiency. KPMG were the first consultancy approached by Bega to bid on the next stage of the project.

© 2020 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Liability limited by a scheme approved under Professional Standards Legislation.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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