Supply Chain Q&A: Right-Sizing the Footprint
July 1, 2012
Heinz North America’s new frozen meals factory in Florence, S.C., prompted the company to reevaluate its logistics network.
Refrigerated & Frozen Foods talks with Sandy Evett, vice president of logistics and distribution for Heinz North America, Pittsburgh.
Refrigerated & Frozen Foods: Summarize Heinz’s approach to supply chain and logistics.
Sandy Evett: Heinz’s supply chain strategy is largely based on a focused approach to core competency that provides the company with competitive advantage. Where we have proprietary knowledge and expertise, we in-source our manufacturing and logistics functions. We are also highly focused on driving year-on-year consistent productivity across all aspects of the supply chain in order to off-set inflation and manage costs.
R&FF: Any key developments involving your group (personnel, structure, location, etc.) during the past year?
Evett: During our fiscal year 2012, concluding on April 29, Heinz closed three foodservice factories (one dry and two frozen). Additionally, on May 10, we announced the divestiture of our foodservice desserts business to a group of investors led by Superior Capital Partners, LLC. This transaction included two additional frozen factories that are now operating under the name Dianne’s Fine Desserts. These changes prompted us to evaluate our logistics network and to continuously right-size our footprint and organization.
R&FF: What are some key warehousing/transportation initiatives that took place over the past year? Any initiatives in place for 2013?
Evett: The logistics team implemented a significant WMS upgrade at three of our dry foodservice distribution centers. We have been, and remain focused on, developing direct plant shipment programs with our customers and driving rail and intermodal utilization for our interplant shipments. We see the evolution of intermodal and rail as critical to managing the supply chain of the future. Our transportation team just completed a comprehensive procurement event concluding with new and reinforced long-standing partnerships and new routings now being reflected in our day-to-day execution.
R&FF: What were some challenges faced over the last year?
Evett: Managing financial performance in light of commodity and fuel volatility remains a consistent challenge for all supply chain professionals, and our fiscal year 2012 was a particularly inflationary period. Additionally, many consumer packaged goods companies experienced demand shifts over the last 12 months, and these changes in demand presented us with challenges, as we sought to reduce inventory while maintaining industry-leading service levels to our customers. We successfully managed our inventory and service, but only by stretching the flexibility of our supply chain.
R&FF: This year, the new Southeast plant comes online. Congratulations. How did this change your network model/footprint?
Evett: Our new frozen meals factory in Florence, S.C., started up in August 2011. Simultaneously, over the past 12 months, Heinz has elected to discontinue two of our frozen meals lines-the Boston Market line and the TGIF meals line. We remain highly committed to the TGIF brand and are re-focusing our attention on TGIF snacks.
R&FF: Does Heinz host a meeting or bring in its warehouse and transportation partners? How can these third-party operators better help you in the future?
Evett: We have historically pursued a strategy of maintaining a limited number of significant and strategic third-party partnerships with our warehousing and transportation vendors. We conduct frequent operational reviews and conduct formal quarterly business reviews with our most strategic partners. Collectively, we must be even more collaborative in order to drive costs out of the supply chain.
Meet Sandy Evett, vice president, logistics and distribution Heinz North America, Pittsburgh
Sandy Evett joined Heinz North America as vice president, logistics and distribution in September 2010. Prior to joining Heinz, Evett worked at Barilla America, Inc., holding various supply chain roles, including director of logistics and customer service and vice president of supply chain. From 1997-2001, she served as director of logistics with Pactiv Corp. and held several logistics and supply chain roles with The Quaker Oats Co.