Per WSJ, packaged food companies are struggling to keep shelves stocked, so have changed procurement strategies. General Mills temporarily increased the number of suppliers by 20%, including contract manufacturers and raw material suppliers, to respond to higher demand.
General Mills has 47 food production facilities globally and plans to increase capex to support operations. They are also looking to grow production by adding plant lines or removing bottlenecks, but are unsure how long increased demand will last. In this environment, relying more on third party manufacturers allows them to be more flexible. According to CFO Kofi Bruce, the cost is higher, but “you’re not stuck with the cost of those assets if demand evaporates.”
Many producers face similar questions — how to increase capacity at existing plants or with third parties?; how to eliminate bottlenecks?; how to balance supply, demand, cost with many variables and much variability to consider?; how to manage risk with so much uncertainty? MOSIMTEC addresses these questions every day with dynamic computer simulation tools. How can we help you?
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Learn more here: https://www.wsj.com/articles/general-mills-adds-more-outsourcing-partners-as-it-aims-to-meet-packaged-food-demand-11595842200