<By the way, our top 20% of suppliers, 80% of our sales are doing fine too.>
Sure hope KRAFT and KELLOG weren't included in this top 20%.
I had lunch with Kraft V.P. last spring in NYC. If you're interested and want to search SI, I recapped our conversation and his comments. He was a speaker at same conference I was speaking at.
Guy from Kellog was sitting in back of me at Process Control meeting in Houston a few months later. We discussed Kraft's problems, and he concurred they were running into the same thing.
Plan is to cut-out certain product lines. Cut out certain vendors. Stockpile raw materials on a measured basis, to not alert competitors and affect commodities market. Some vendors are critical for high margin Kraft/Kellog product lines, yet don't have expertise and finances for fix. Kraft/Kellog are fully funding Y2K remediation for certain critical, key suppliers.
BIG problem in the plants. Some chips have to change. Since plants were built, size of chip has changed. So, motherboard has to change too. Problem is, motherboard is affixed to valve ... so valves have to be replaced. Problem goes a few more levels beyond.
Kraft V.P. had Computer Science AND Electrical Engineering degrees. Said he had a tough time with IT people who didn't understand plant floor. He was with company 30+ years. Built 9 plants. He also resigned from Kraft a week following conference and I heard he bought a small food-processing plant.
One final comment re Kraft. He said they lost a year on Y2K fix, in determining who key suppliers were. Initially some bean counter deemed high $ purchase clients as mission critical, and crossed off the little guys. Ended up many little guys were key to making products unique. They had to go over product and ingredient list very carefully ... and re-determine mission critical vendors.
Cheryl |
