FOSC chat: How Nestlé is strengthening its supply chain

BIOS:  Kessman has over 20 years of supply chain industry experience, mostly through a variety of leadership roles within Nestlé. In his current role as senior director of supply chain, he is responsible for customer collaboration, replenishment, forecasting and annual plan execution. Waller is dean of the Sam. M. Walton College of Business at the University of Arkansas, where he also serves as the Sam M. Walton Leadership chair and as a professor of supply chain management. He is a former co-editor-in-chief of the Journal of Business Logistics, as well as a co-founder of Bentonville Associates Ventures and Mercari Technologies.

KEY QUOTES FROM GREG KESSMAN

“Ultimately, we want to make sure the product is available in store or online when the consumer wants to purchase it. That’s really our goal. It’s a shame if a consumer has the intention of purchasing your product but it’s not available. So, we want to make sure we have the most efficient supply chain and the most cost-effective supply chain, but that we get to that service level goal of meeting our consumers’ demand.”

“How do you get to 97%-99% product availability? It’s a very difficult question to manage. Obviously you can carry more inventory. But it’s difficult to carry that much inventory. The importance of the first move from the factory is something we look at. How do we improve that? Because if you miss that, you’re going to be out of stock somewhere.”

“Pre-pandemic, the automation in the warehouse was a cost-savings exercise. What we’re seeing now is that it’s a way to improve our reliability. It requires a little bit more planning of the throughput through the distribution center, but it’s reliable. Our LGVs and RGVs are always available. They’re always moving product between our warehouses. The automatic layer and picking system are working all the time. They don’t call in sick. They may have occasional unplanned downtime, but we’re able to provide some redundancy around that too. So, when you talk about this theme of resilience and reliability, I think automation is key.”