General Mills: Transforming Supply Chain Management Using AI
General Mills, the multinational manufacturer and marketer of branded processed consumer foods, is adopting an 'always-on' model powered by AI in a bid to slash waste and boost efficiency across the value chain.
Through the use of enhanced datasets and digitalisation within the company, General Mills was able to find ways to leverage AI to drive resilience, cost savings and environmental sustainability, while ensuring seamless operations amidst disruptions.
The business also implemented end-to-end logistics flow visibility and enabled agile decision-making at scale.
How digitalisation is transforming General Mills
Paul Gallagher, Chief Supply Chain Officer at General Mills, is well placed to explain the benefits that can be gained from digitalising the company's supply chain.
He highlights how this approach has led to increased efficiency and resiliency, in addition to cost reductions and a lower carbon footprint.
"In our procurement organisation we're using enhanced datasets to develop models that identify the gap between what we're currently paying and what the ingredients or packaging materials should cost," he told the Gartner Supply Chain Podcast.
“We have evolved to an always-on model, so that our teams are working more in a dynamic model rather than it being episodic.
"Historically we would have rotated through cycles of categories, potentially missing or delaying savings. Our new reality is that we see this always-on approach driving incremental value and the ability to react faster where we get supplier disruptions or market dynamics change.
“In manufacturing, we're rapidly implementing the use of what we call real-time analytics to eliminate waste. Using generative AI algorithms, we've seen more than 30% waste reduction. We've implemented the data and now we're expanding this programme globally, ensuring that we're driving value across our manufacturing."
Revolutionising supply chain management with ‘ELF’
Paul joined the company in 2019 with a clear mandate: to transform the supply chain network to drive a competitive advantage.
Digitalisation was a core part of this strategy and General Mills ramped up its efforts during the pandemic to ensure business continuity and value generation amid disruptions.
The company's focus on digitalisation began with sourcing, where it has created a comprehensive digital platform providing end-to-end visibility into the supply chain.
Collaborating with software developer Palantir Technologies, the duo created a comprehensive digital platform providing end-to-end logistics flow (ELF) visibility into the supply chain. This platform is built on a digital twin of the supply chain, advanced analytics and AI.
“ELF enables full transparency across our end-to-end supply chain with dynamic order processing and optimisation depending on the varying inputs that we put in, whether that be cost, weather, customer timelines or even greenhouse gas emissions,” Paul adds.
“What we've seen in the six months from its initiation – especially where we started, our US human foods business – is that, everyday, those 3,000 orders are being assessed more than 100 times and up to 400 recommendations are coming through the process to our team. Seventy per cent of those are now automatically accepted and it's translating into tens of thousands of dollars daily.
“The key outcome includes decision speed. What would have taken us a day is now taking us a minute. Also, it's driving value by giving time back to our team.
“We're moving from a world where people make those decisions supported by machines to one where the machines make most of the decisions, guided by people. This intelligent execution at scale is where we're seeing the benefits come through to our supply chain."
******
Make sure you check out the latest edition of Procurement Magazine and also sign up to our global conference series - Procurement & Supply Chain LIVE 2024
******
Procurement Magazine is a BizClik brand
