Excess inventory in supply chain was flagged as an industry problem in a 2002 logistics survey by the Grocery Manufacturers Association. The survey found food companies averaged 45 days worth of inventory in distribution, almost double the target for consumer packaged goods. In the case of major producers of nonperishable foods, more than $30 million in working capital could be freed by bringing inventory levels in line, GMA concluded.
Campbell Soup Co. may be the world’s largest producers of shelf-stable foods, and the Camden, N.J., manufacturer made supply-chain efficiency a top priority in 2004 when it brought a Procter & Gamble executive on board to manage the global supply chain. The company’s portfolio of soups and beverages was reasonably stable, but the packaging options were proliferating.
P&G was noted for its technology-driven supply-chain initiatives, and that first P&G executive (recently retired David White) recruited a half dozen or more former colleagues to help get the Campbell supply chain in order. The mandate went well beyond excess inventory; production facilities are officially known as Campbell Supply Co. sites, identifying processing as a link in the supply chain.
Ten years after the supply chain initiative began, Campbell is a much leaner and more nimble processor. Instead of adding lines and expanding facilities, it has retrenched. Three plants closed in the past year, with three remaining thermal facilities now meeting North American demand (another soup facility in Marshall, Mich., closed in 2011).
The granddaddy of them all is in Napoleon, Ohio, Campbell’s largest facility, with 2.4 million sq. ft. under roof. The sprawling operation is really four plants in one. Standard Brands built the beverage facility in 1938, Campbell acquired it in 1948, and nine years later the soups and sauces plant was added. Five major expansions have followed. A can production operation was turned over to Silgan, and Amcor added a PET blowmolding facility.
“We’re a big spend area for the company,” observes plant manager Mark Cacciatore, vice president-manufacturing. Cost reduction and margin management are part of his marching orders. Squeezing more from existing assets is another, and that requires optimizing plant efficiency.
“These plants were built for long, continuous runs,” he continues, yet the Napoleon operation produces approximately 520 different SKUs, about half again as many as a decade ago. That level of manufacturing flexibility often requires a tradeoff in volume, yet Napoleon produced a record 107 million cases of finished goods last year, worth more than $2 billion at retail.
Throughput increases are more remarkable because of the required handling diversity. Besides dealing with many more container types, operators must deal with more customized pallet patterns and case packs. “Forty-eight can cases were all we used to pack,” notes Alan Rippey, director of high-performance operations, but retailer requests have resulted in significant customization. “Now we move to whatever our customers want.”
More equipment plays a role in increased efficiency. Instead of a single blender feeding seven soup kettles, dedicated blenders now serve the lines. Better yield, faster clean-up and changeovers, and more consistent quality are among the gains. Napoleon also has benefited from union-approved work rule changes that allow employees “flow to the work” as needed, says Cacciatore.
Napoleon’s infrastructure compares favorably with many mid-sized American cities. Water is drawn from the Maumee River three miles upstream of the plant and then treated for process applications. Wastewater is treated and field applied on 640 acres to grow canary grass, some of which will help fuel a new biodigester, with the rest used as cattle feed.
One of the plant’s most notable features is a seven-story hydrostatic cooker that soars above the main roof line. As many as 16,000 containers at a time rotate up and down on a carousel to reach commercial sterility, completing the process in about half the time as other plant retorts. The system addresses volume needs, but flexibility advances depend on continuous improvement. A total productive maintenance program involving Prego sauces is credited with boosting line efficiency to 86.7 percent from 69.1 percent eight years earlier, for example.
Manufacturing flexibility and efficiency are desirable characteristics for all food plants, though they are particularly important when producing mature products in low-growth market segments. That describes condensed soup, and Campbell is addressing this need with an ongoing, network-wide initiative to simplify the soup-production process.