In the educational session of CSCMP's annual conference in 2009, Philippe Lombotte, senior vice president of global customer services and logistics of Kraft foods, provided some examples of how Kraft frees up cash. These include:
– Linking managerial incentives to cash flow as well as to revenue
– Monitoring and reducing the number of stock-keeping units (SKUs).
– Creating a fixed, weekly production schedule that produces the same sequence of SKUs for the same length of time, and only in the quantities actually needed. This ensures more regulated flow of finished goods and reduces raw material and packaging costs.
– Phasing out SKU's with low revenue and high sales volatility after a careful evaluation.
– Reducing service levels for some product lines to operate with less inventory coverage.
Source: "Kraft uses SCM to increase cash flow," CSCMP's Supply Chain Quarterly, Quarter 4/2009.