Sustainability and Stability: Kellogg Company's Transformation of Supply Chain

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• Analytics & Modeling - Predictive Analytics

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Kellogg Company, a multinational food manufacturing organization with 33,000 employees, faced a significant challenge in managing its extensive supply chain. The company produces 1,600 foods in 20 countries and markets them in 180 countries, making transparency and sustainability crucial. Alistair Hirst, SVP Global Supply Chains at Kellogg Company, emphasized the need for a stable base to build a sustainable supply chain. The company's supply chain extends to multiple tiers, making it a complex task to understand and manage the entire process. The challenge was not only to reduce greenhouse emissions or energy footprint but to ensure sustainability throughout the end-to-end supply chain. The company also had to meet the expectations of its customers, particularly millennials, who demand transparency about the origin of their food and prefer companies that align with their moral compass.

Kellogg Company is a multinational food manufacturing company with a workforce of 33,000 people. The company produces a wide range of food products in 20 countries and markets them in 180 countries. The company's customer base is diverse and global, with a significant portion being millennials who demand transparency about the origin of their food and prefer companies that align with their moral compass. The company's supply chain is extensive, involving multiple tiers and a large number of direct and indirect employees. The company is committed to sustainability and transparency in its supply chain, and it works with various partners to achieve these goals.

To ensure a stable and sustainable supply chain, Hirst outlined four key areas that Kellogg Company needed to focus on. Firstly, resilience against short-term supply shocks to react quickly and secure supply at short notice. Secondly, the ability to predict longer-term supply shocks, particularly those related to climate change. Thirdly, the use of rich data or predictive analytics to anticipate future trends and stabilize the supply chain. Lastly, the formation of partnerships with organizations like the World Bank, Sedex, and SGS to understand their supply chain and sustainability agenda better. The company is also working on four key areas in its supply chain: Climate Smart Agriculture, Climate and Natural Resource Conservation, Human Rights, and Reputation. They are partnering with farmers, working on conservation efforts, ensuring suppliers comply with their global code of ethics, and maintaining their reputation through audits and continuous improvement.

• The implementation of these strategies has led to significant operational benefits for Kellogg Company. The company has been able to increase its resilience against supply shocks, both short-term and long-term, particularly those related to climate change. The use of predictive analytics has enabled the company to anticipate future trends and stabilize its supply chain. The partnerships formed with various organizations have helped the company understand its supply chain and sustainability agenda better. The company's efforts in Climate Smart Agriculture, Climate and Natural Resource Conservation, Human Rights, and Reputation have not only improved its supply chain operations but also enhanced its reputation and customer trust. The company's commitment to audits and continuous improvement has further strengthened its operational efficiency and reputation.

• Kellogg Company is partnering with 15,000 farmers by 2020 to work on increasing productivity and crop resilience and reducing greenhouse gas emission.
• Kellogg Company has been working with the Thai government since 2008 to grow long grain rice in Thailand, ensuring resilience of supply.
• Kellogg Company has invested in solar power for quinoa growers in Bolivia, enabling them to irrigate the fields and light their homes at night.