Building to Consumption: Celebration Foods Delivers Make To Order In The Face Of Supply Chain Comple

1
Building to Consumption Celebration Foods
DeliversMake To Order In The Face Of Supply
Chain Complexity

• Craig Hall
• COO, Celebration Foods

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Celebration Foods and the Ice Cream Frozen
Desserts Category

• Leader in the ice cream frozen dessert category
• Traditionally considered part of bakery
• 67 market share 42 ACV penetration
• Accelerated growth past 3 years
• Entered grocery retail in 1992
• Previously sold only through 550 Carvel
  franchise stores and foodservice outlets
• First ice cream store in Hartsdale, NY in 1934
• Over 80 of business delivered through a
  direct-store-delivery model (DSD)
• Products now sold in over 40 states
• 8,500 supermarkets, supercenters and club stores
• Available in 12 of the top 15 grocery retailers,
  and many leading regional chains

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Business Strategy

• Complete national rollout of the Carvel branded
  products
• Business imperatives
• National brand geographically and conscience
• Innovation current and new items
• Customer centric partnering to maximize the
  category growth
• Supply supremacy freshness, fulfillment
• Supply competencies
• Make-to-order and freshness-to-consumer
• Distribution
• Flexibility
• Maintain financial profile while managing
  increasingly complex system

4
Carvel 2002The stagnant business model
? Six small manufacturing sites ? Dedicated
market areas ? One route to market ? Limited
product range
VT
WA
ND
MT
ME
NH
OR
MN
NY
ID
MA
WI
SD
MI
RI
WY
CT
IA
PA
NJ
NE
NV
DE
IL
UT
OH
IN
MD
WV
CO
VA
KS
MO
KY
CA
NC
TN
AZ
OK
SC
AR
NM
GA
AL
MS
TX
LA
FL
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Celebration Foods 2005 forwardThe growth
business model
? One large manufacturing site ? Three
co-manufacturers one medium one small ?
Mainly centralized production of ? Multiple
routes to market components ? Two in-market
warehouses ? Expanding product range
VT
WA
MT
ND
ME
NH
MN
OR
NY
ID
MA
SD
WI
MI
RI
WY
CT
IA
PA
NJ
NE
NV
OH
DE
UT
IL
IN
MD
WV
CO
VA
KS
MO
KY
CA
NC
TN
AZ
OK
SC
AR
NM
GA
AL
MS
TX
LA
FL
In-market flow through warehouse
Co-Manufacturing Site
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Business Challenges

• Materials Management the right amount in the
  right place at the right time
• Scheduling co-manufacturing operations
• Scheduling central casting
• Aligning in-bound shipments with Shuttle
  availability (backhaul)
• Fulfilling orders with finished goods from
  secondary sites
• Flowing route orders through 3rd party warehouses
• Limited raw and packaging materials and component
  storage on site (1 to 5 days)
• Tempering and shelf life limitations on key
  materials

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Business Challenges

• Lack of visibility across the supply chain
• Need to match supply with demand in
  make-to-order flow
• Orders made up of on-site and off-site sourced
  finished products including non-company brands
• Additional replenishment step with in-market flow
  through warehouses
• gt15, and growing, volume moving to store outside
  of company owned-DSD system
• 90-95 of Plant shipments moving on dedicated 3rd
  party shuttles with fixed routing requirement

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Business Challenges

• Employee/Resource effectiveness
• Complexities force a day-to-day (hour-to-hour)
  focus rather than big idea thinking
• Continually responding to the latest information
• Increased number of moving parts in the supply
  chain obscures the static view, and blocks the
  dynamic view
• Reliance on real-time, current day schedule
  changes to fill orders
• Planning/expediting efforts out-of-balance

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Business Challenges

• Cultural/structural change from mom pop to
  national CPG operational structure
• Supply chain as a science, not an art
• Definition of Customer changing from company
  owned route to this and a customers warehouse.
• Reliance on an informal communication and
  planning structure now a weakness
• Central visibility and macro planning quickly
  evolving from a nuisance to a must

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Key Initiatives Discipline and Focus

• Create the vision, build the plan and corporate
  structure accordingly
• STOP doing just because we always have
• START doing because we know its where were
  going
• Migrate the supply chain to a more integrated,
  open model maintaining/improving responsiveness
  with more complex demand
• Maintain, and advance, the make to order
  mindset
• Establish clear roles and responsibilities among
  departments
• Continuously refine operations based on latest,
  real demand information (e.g. orders)

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Key Initiatives Technology

• Supply Chain Management OnePlan, an On-Demand
  Scheduling Solution from Ross Systems
• Solving the problem vs. purchasing great tools
• The problem is SCHEDULING NOT DEMAND PLANNING
• Demand-driven, lean delivery model
• Built around perfect scheduling
• Feed into inventory tracking / bio-terrorism
  system
• Order Management field Handheld devices
• Orders input and tracked
• DSD orders accurately track and model orders
• 3rd party / other centrally input
• Real-time order changes and tracking
• Critical feed to supply chain management
• Model current orders against history

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For Example SchedulingIts about today

• Creating the perfect weekly schedule
• Schedule feeds everything else
• Challenges we faced
• 40 growth over 3 years
• East Coast facilities grew over 100 in 18
  months!
• Expect 40 growth over next 3 years
• Moderate seasonality
• Limited capital investment in new capacity
• Working with a finished goods inventory baseline
  of less than 5 days
• Business impact and relationships
• Production inefficiencies no scenarios
• Fulfillment issues Key stone cops to insure
  availability
• Material stock-outs no smooth hubbing of data
• Inventory control not matching production with
  instant demand wreaked havoc
• Management waste

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New Scheduling Solution Supports Demand-Driven
Model

• How we solved it
• OPTIMIZED around the issue SCHEDULING
• OnePlan is a Ross Systems SaaS planning solution
• Dedicated resources on both sides
• 12 weeks for initial site
• Pushing the software to solve our problem
• Rigorous performance scorecards

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Business Benefits
Capital Investment
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From Store to Order to StoreMake to Order For
ALL Routes to Market
Dynamic Plant Scheduling and Order Fulfillment
Management
X
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Celebration Foods Solution
Supply chain built around STRENGTHS
Synchronized Plan OnePlan Provides 360 View
Freshness, Distribution, Brand Equity Solve
SCHEDULING
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Reinforcing Demand-Driven Model

• Competitive assets true make-to-order
• Maintain ability to react quickly, but do it more
  productively
• Balance flexibility with lower cost
• Opportunity/need to integrate data from a variety
  of sources
• Handhelds, inventory, order management,
  forecasting
• Effective supply chain matching
• Effective modeling and decision support
• What-if scenarios
• Dynamic balancing of demand

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Benefits and Key Takeaways

• Identify and leverage your core equities
• Quality, freshness, distribution make to order
• Separate equities from traditions and habits
• Organize and develop solutions around your core
• Determine the FOCUSED initiatives required
• Scheduling vs. planning
• Dont solve too broadly youll solve nothing
• Use technology to solve complexity

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Thank You

• Craig Hall
• COO
• Celebration Foods
• chall_at_celebrationfoods.com
• Building to Consumption Celebration Foods
  Delivers Make
• To Order In The Face of Supply Chain Complexity