General Mills Revolutionizes Supply Chain with AI and Cloud Technology
Introduction: A Shift in Supply Chain Management
General Mills, a leader in the consumer packaged goods (CPG) industry, is taking significant strides in evolving its supply chain management. Moving from a traditional design-to-value model, the company now adopts an “always-on” approach, leveraging artificial intelligence (AI) to enhance its operations dynamically rather than episodically.
Implementing AI in Procurement and Logistics
Paul Gallagher, the Chief Supply Chain Officer at General Mills, recently detailed on a Gartner podcast how the company is utilizing enhanced datasets in procurement to develop models that pinpoint cost gaps in ingredients and packaging materials. This implementation of generative AI algorithms has led to a notable reduction in waste by over 30%, prompting an expansion of the program.
Gallagher highlighted the departure from traditional cyclical productivity models, which often missed or delayed savings opportunities. The new always-on model enables General Mills to respond more swiftly to supplier disruptions or shifts in market dynamics, ensuring continuous incremental value.
ELF: Enhancing End-to-End Supply Chain Transparency
In logistics, General Mills launched the End to End Logistics Flow (ELF) product, developed in collaboration with Palantir. This AI-driven tool is designed to improve supply chain execution by providing dynamic order processing. ELF optimizes various inputs, including cost, weather conditions, customer timelines, and greenhouse gas emissions, to support comprehensive supply chain transparency.
Since its inception in the U.S. human foods sector, ELF has handled approximately 3,000 orders daily. In just six months, the technology recommended hundreds of optimizations, with 70% being automatically implemented, translating into significant daily cost savings.
COD Pod: Cloud-Based Innovation Spurring Cultural Change
The introduction of COD Pod, General Mills’ first fully cloud-based application, marks a pivotal advancement in the company’s Business Performance Management strategy. Initially deployed in the North American retail segment, COD Pod integrates master, operational, and transactional data across more than 2,000 tables.
This platform not only streamlines day-to-day operations but also enhances the management of long-term goals and supports enterprise-wide transformation. Gallagher emphasized the shift from intensive manual processes to a more automated and error-resistant system, significantly boosted by the challenges and learning curves presented during the pandemic.
Real-Time Data and Decision-Making
The COD Pod platform provides near-real-time data to nearly 2,000 users weekly, driving necessary cultural changes within the organization. It facilitates rapid decision-making processes where unactioned decisions are automatically escalated, ensuring efficiency and accountability at all levels of management. Gallagher noted the effectiveness of this system in minimizing the number of decisions requiring his direct intervention.
Future Prospects and Continued Innovation
As General Mills continues to integrate AI and cloud technology into its operations, the benefits extend beyond just operational efficiencies. These technologies are crucial for maintaining a competitive edge in today’s fast-paced market and for supporting sustainable practices across the supply chain.
Looking ahead, General Mills plans to further harness the power of AI and advanced analytics at the upcoming Analytics Unite event in Chicago, where industry leaders will converge to discuss the potential of generative AI in supply chain management.
Conclusion: Leading with Technology
General Mills’ strategic adoption of AI and cloud technologies illustrates a significant shift in how major CPG companies manage their supply chains. By transitioning from a design-to-value to an always-on model, General Mills is not only optimizing its supply chain operations but also setting a new standard in the industry for innovation, sustainability, and efficiency.
More news: General Mills warns of ‘food shaming’
Source: Consumer Goods
