How ConAgra Drives Supply Chain Transformations With Speed and Visibility

ConAgra has reworked its supply chain strategy in recent years after realizing that reactivity to things that were currently happening is never as valuable as being able to forecast and prepare long-term strategies. In a recent conversation with CGT, ConAgra’s vice president of supply chain, Lance Maddex, emphasized the importance of speed and the power of real-time visibility. Learn by example in this edited transcript of CGT's latest webinar to create a performance playbook that allows CGs to rebound with greater vigor and vitality, respond with agility to long-term outlooks, and create more value for consumers through a supply chain that’s based on collaboration and organization. Hear from Madden of ConAgra as he shares how the brand is meeting consumer expectations, driving internal performance, and finding consistent results by transforming supply chain planning. Lisa Johnston: Hello, everyone. Welcome to “How ConAgra Overcame Disruptions to Drive Supply Chain Transformation.” I'm Lisa Johnston, editor-in-chief at CGT, and I thank you for joining us today. There are no illusions about the supply chain disruptions that continue to persist in retail and consumer goods industries. The supply chains continue to be challenged with demand and supply side shocks. However, as painful as they've been, they've also served to expedite and accelerate innovation and transitions for supply chain professionals. Some companies have rebounded by creating value for consumers, customers, and businesses by developing performance playbooks. To take a closer look at that, we've brought together a panel of experts to learn how transforming supply chain planning can help organizations meet customer expectations, elevate internal performance, and drive results. I'd like to welcome our panelists, Lance Maddex, VP of supply chain at ConAgra, Shri Hariharan, CVP of industry strategies at Blue Yonder, and Santosh Kumar, associate director of supply chain at Accenture. For now, I’ll let Shri take the lead on the discussion, the floor is yours. Shri Hariharan: Thank you, good morning. Lance, I’d like to start with you. ConAgra is a global consumer goods bellwether that offers a range of conveniently accessible nutritional products through multiple channels. Can you describe the scale and scope of your operations and your responsibility within the company? Lance Maddex: Thanks for having me. For folks less familiar with ConAgra Brands, we are primarily a North American food manufacturer with brands in every aisle at the grocery store. We operate 42 internal manufacturing plants and more than 34 points of distribution across multiple temperature states. While you may not be as familiar with ConAgra Brands as a company, hopefully you're very familiar with some of our products, including pantry staples such as Hunts, Pam cooking spray, Duncan Hines baking products, Chef Boyardee; iconic snacking brands like Orville Redenbacher, Slim Jim meat sticks; or temperature-control favorites Reddi Wip, Marie Callender, Healthy Choice, or Birds Eye frozen vegetables. There are 100 more of our brands across your favorite grocery store. My area of responsibility, specifically, is on our temperature-controlled state, running the frozen and refrigerated planning. Johnston: We know that consumer expectations continue to rise and morph. Everyone is demanding assured access to products loved by millions, whether it's through an online channel or offline format — doesn't matter — they count on you as both a pantry and lifestyle essential, more or less. Of course, being in the supply chain, you always have to address challenges and be on call 24/7. However, no one anticipated the timing, intensity, and impact of the disruptions that we've all witnessed over the past couple of years. We definitely haven't seen the end of them, either. It's both fact and coincidence that over the same three-year span ConAgra has transitioned its supply network planning and operations to a new paradigm. Lance, are you able to share a bird's eye view as a leader of that initiative? Maddex: First off, it's an understatement — things have been crazy. It's certainly fair to say that no one could have predicted the magnitude of the disruption caused by the pandemic. However, in a lot of ways, it accelerated what was already a changing landscape, which you alluded to. Pre-pandemic, the world was changing too, be it the rise of e-commerce, shifting labor dynamics and manufacturing logistics, or those once-in-100-years weather events that seem to pop up every single year. We recognized things were evolving, things were changing, and frankly, we needed to modernize our supply chain, as well as, at the heart of it, our planning systems. We decided to go down the journey, starting like most folks. I’d guess many have been part of a surge like this before. You begin by wondering how we can better serve customers and how we can do so at an optimized inventory? But we knew the approach people had been taking in the '70s, '80s, '90s, and early 2000s wasn't enough. Technology would allow us to do more — and frankly, supply chains demand more — so naturally, we wanted to do more. We wanted to look at downstream logistics constraints. How we can model capacities at warehouses, not just pallets, but inbounds and outbounds. Speaking of logistics, transportation, how can we make sure that we're writing the proper number of loads every single day to maximize the route guide, maximize mode, to execute perfectly, systematically, and leave our folks more time to do the things when exceptions invariably pop up. Above all, and most importantly, we wanted to be fast. How can we execute the IBP process more quickly, more dynamically, more scenarios, more iterations, and how can we do those things systematically, leaving again, our folks time to work on continuous improvement versus execution? We have been on the journey, laying out the roadmap. When the pandemic hit, it reinforced that we're headed in the right direction. All the challenges that popped up, told us we're headed to the right place. That's not to say change is easy. Everyone here will tell you that it's hard: it takes buy-in at all levels of the organization, then it takes detailed change management plans for everyone involved throughout the process, and recognizing that we worked hard to find a partner that could not only help us identify tools that accomplished our goals, but help with all aspects of the journey. Santosh, Accenture's been with us from the beginning. Could you share with the group an industry perspective on the new supply chain imperatives and the executive change agenda? Santosh Kumar: Thanks for the partnership and collaboration. It has been a fantastic journey together. Before I begin talking about the trends and patterns I've been seeing in the marketplace, I'd like to take a moment on the current state of supply chain. Supply chain has seen more changes in the past two years than it has in a decade. With everything that is happening in the world around us — be it pandemic, logistic breakdowns, or inflation, raw material shortage and many more — today's supply chain has become much more complex than ever before. It requires a different approach, a new approach to manage all the disruptions that are happening around us. Supply chain today is seen as a competitive differentiator. Today's supply chain initiatives are no longer just about cost and efficiency. It's all about improved resilience, increased speed, and moreover, new ways of working. The three key patterns emerging in the marketplace, especially with the customers that Accenture has been engaged with are: 1. A huge focus on visibility and collaboration. Continual investment in the cloud, companies are looking to reevaluate their talent strategy. As we all know, visibility has been a continuing problem in the supply chain, and it is one of the top agenda items for supply chain executives. With the fast-changing consumer trends and preferences, supply chain executives are looking to drive better transparency, as well as improve flexibility, responsibility, and speed through enhanced visibility and collaboration across the ecosystem. This trend will continue to evolve as the supply chain does the same. 2. Companies are continuing to invest in the cloud, moving beyond the current supply chain. Today, companies are looking at the cloud not as a destination, but as a continuum of capabilities. They're looking at it as an adaptive technology foundation that enables supply chain innovations and helps them connect data across the value chain. 3. Most importantly, the talent strategy — we’re all grappling with the talent shortage in the marketplace. As companies continue to accelerate the pace of digital transformation, the need for digital talent is growing more and more. Companies are looking to address a skill challenge and evaluate the talent strategy, but the new skill targets are not about improving digital fluency or bringing digital literacy. It's about creating a cross-functional mindset, broadening employees' horizons and speed. As companies look to accelerate the pace of digital transformation, they need to continuously evolve the talent strategy — it's going to be a continuous journey. Those are the three key trends I've been seeing in the marketplace. Shri, you have been in the market. If you look at the consumer goods customers, when you go out in the field, are you seeing similar trends and patterns, or are you seeing something different? What questions is Blue Yonder helping customers answer? Hariharan: It's always great to have a point-of-view like the one you shared, with Accenture looking broadly across the industry. When we engage with customers and the market, the question we're trying to answer at a high level is how do we help companies make good business decisions at scale? That's the theme we've been focused on the last couple years. When you drill down into that, the notion of building resilience and agility is the objective. At any given time, a supply chain professional should be able to answer three questions: What's the overall health of these supply chain operations? How is my business performing against my plan? Are there risks, gaps, challenges, or am I ahead of plan? Let's continue to do more of what we're doing well. That leads to the second point. When you see operations being executed, you want to understand the plan as things evolve: I made a plan, I'm executing the plan, and what are the business impacts from disruptions and potential risks? There are two paradigms. One is being able to respond when you have an issue and understand the tradeoff of what it does to improve customer service or meet the demand? Second is the corresponding impact on the operations, the cost to serve, the cash to serve — those aspects come into mind. When we engage with CG companies today, there's an equally high focus, even a top two focus, on driving these decisions in a more responsible way and keeping sustainability in mind. Sustainability is not just the planet and the GHG gases and emissions, although there is a huge focus on that. It's also the employee part. That's where you were talking about talent development, talent retention, and the upskilling of the workforce. We are absolutely seeing those trends. Our point-of-view at Blue Yonder is how can companies weaponize supply chains as the enabler of growth and future proofing business models? That's where the high-level attributes are, how do you become resilient and performance driven? How do you become a live enterprise? There's flexibility in how you operate and adapt to changes. How can you stress test and optimize your value network, not just within the four walls, but extending to your suppliers and their suppliers. How do you drive responsible growth? For a lot of CG companies, revenue growth management is a big opportunity, especially as consumer demand changes and we look at macroeconomic forces. What are those levers you can push and pull to drive that growth strategy? Which then brings you to the role of data technology and the workforce. The answer lies in blending the plethora of data that we're all generating — consumers, our manufacturers, distributors, all the way to retailers, and the extent of the value network. That convergence of data, technology, and creating an augmentation for the workforce, where you make recommendations based on the right decision. Maybe there's trade-offs. As you learn from that, is there an opportunity to automate some of these and augment the decision process? We're excited at the confluence of all this change for companies like ConAgra, their customers, and working with companies like Accenture to be able to bring this to a capability building model. Johnston: I’d like to dig in a little bit more on ConAgra, if we can. Lance, you alluded a bit to what ConAgra wanted to do differently in their supply chain. What can you share about the ConAgra supply chain that they can do now that was maybe extremely difficult or not possible previously? Maddex: It's speed. I keep coming back to the same word: speed, the power of real-time visibility, and the opportunity to influence. We could always see things that were happening to us in a moment, but rarely were we able to look and flag potential things that were going to happen to us two weeks from now, four weeks from now, or five weeks from now, and get more proactive alerts. Even when we would get those in the past, that would become an Excel exercise with a small group of people working hard to problem solve one potential thing — not even seeing the trade-off decisions that were coming as a result of trying to solve this small thing in a vacuum. Santosh alluded to collaboration, oftentimes solving it in one place and having unintended consequences in another place in the organization, sometimes for the person sitting across the aisle from them. What we can do now, fundamentally differently, is not only see those things coming at us, we can see the things that are happening to us. We can see the things that are coming at us, and we can iterate — we can get together, collaborate systematically, talk about trade-offs, and talk about scenarios. Instead of being an Excel exercise that comes back to me in eight hours, or two days, when you have an answer — we're talking about seconds. We're taking the opportunity to pivot to a different solution, make a discrete decision, have a different conversation with a supplier or different conversation with a logistics partner, and the outcome of those conversations become a new input, a new scenario. Then, seconds later, we have an answer. It made us fast, nimble, and frankly, it made the quality of discussions with partners and the quality of decisions a lot better. Johnston: Sounds like it's transforming all the operations to become more valuable. Can you talk about how this is impacting customer experience? Maddex: With external customers, we see positive trends and on-shelf availability. We see that our food is making it across the scanner and into the homes of consumers. We're excited about that. But internal customers, the quality of the conversation is embedded in the work we've taken away from our planners. In a more manual planning solution, in a dynamic environment with things changing left and right and all of that work having to be done manually, those folks were executed on keystrokes. Those folks were focused rigidly in having to type things into a system to derive an outcome downstream. With the system doing much of that work, our internal customers — whether it be sales partners, brand partners, or downstream manufacturing partners — will tell you that the conversations with the group are fundamentally different. They're more evolved and solution-oriented vs. task-oriented. It's been a great thing, certainly internally for our organization, and for the planning team. Johnston: Lance, I understand you can't reveal too much about the actual metrics, numbers, and benefits that ConAgra has realized for these strategies. Perhaps more generally, can you talk about a few key metrics that the audience should track at top-of-mind to ensure that supply chains are resilient? Maddex: The traditional supply chain metrics, that we've all tracked for years, went crazy during the pandemic. Whether it was a case fill, an on-time delivery, or on-shelf availability, the things that we traditionally felt if those are going well, the supply chain's doing great — we know those all went haywire during the pandemic. While everybody is recovering and getting to a better place, it doesn't stop the downstream disruptions caused by all those macroeconomic things we spoke about earlier. Johnston: Santosh, based on what Lance is explaining with these metrics and objectives, what technologies and solutions are helpful to address this? Kumar: First of all, it's important to understand the vision of the company. In the case of ConAgra, it was clear what they wanted to achieve. They had a clear leadership commitment and a very clear North Star-vision that leadership had laid out. Now, let’s look at the vision and what capabilities are needed to bring that vision to life. When we started the journey at ConAgra, looking at that vision, we started defining those core capabilities. Once those core capabilities are listed down, then we started looking at what technology is needed to enable those capabilities. Looking at the requirement of nimbleness and ability to iterate and run scenarios more often, we wanted to have a technology that not only serves the current purpose speed, but also positions ConAgra for future success. When building the architecture, we also left room for flexibility because we all know that technology landscapes are changing very fast and new capabilities are evolving rapidly every day, it’s a surprise. Having room for that adjustment is equally important. For ConAgra, Lance made it sound very easy, but there is a lot of change management and leadership commitment. Taking people along in the journey and making them a part of everydays, a part of this overall transformation journey, is easier said than done. ConAgra stuck to their guns and made sure that everybody understands why change is important for us, what we are trying to drive, and what is in it for them. Outside of the technology process, change has an equally important role, if not more important, to bring this transformation to the success that ConAgra grew as part of this transformation. Johnston: Shri, how is the market responding to this? We've been talking about being laser-focused on the customer and what they need, regardless of the uncertainty and disturbance. In order to do this, what is the technology vision that the market needs to embrace and in your view, your perspective, how is the market adapting to this more customer-centric supply chain? Hariharan: Based on what we've led up to now, it's clear to operate at the level of performance that companies want to be at, you need to have transparency, speed, and the ability to affect decisions of humans by giving them the right insights, analytics, and augmentation. For that business transformation to occur, and also sustain Blue Yonder's perspective, you need to start collapsing, planning, and executing together. They have to be happening simultaneously with a clear set of workflows that when the plan is made, it can understand the constraints of the network. Therefore, the output of that plan is something that the execution side of the house will agree it's possible, feasible, and can be done. Then, of course, you begin executing and things happen. Much like Lance and Santosh discussed, when things happen, you need to be able to bring that visibility near real-time in several situations to be able to look at what’s affected, how much is affected, and what are my options? When you think of this paradigm of continuous planning and execution that the market needs, this is where Blue Yonder feels privileged and uniquely positioned to bring capabilities. We offer a foundational, integrated platform that brings together these elements that you’ve heard about. What we're doing is not only bringing this platform together, but looking at how we can enrich the decision process using data. Then, applying techniques along with data comes a bunch of causal factors, the context, why certain things happen, why did a consumer make a decision a certain way? When you start to aggregate those context factors, you are able to apply newer models. Those newer models are more agile, they’re not only predicting the short-term demand by looking at the promotions and the demand-shaping activities that companies in the consumer goods space are activating over the next 30, 60, 90 days. But they're also looking at category data. They're looking at what's happening across the categories to understand what the long-term IBP decision process looks like. Creating that unified view where the same solution can look at the short-term, the mid-term, and long-term, and allow the cross-functional stakeholders, the customer service and logistics team to respond to things happening right now — the tactical demand supply planning team, the network planner, looking end-to-end and trying to make decisions. Then, your commercial teams, brand teams looking at how to grow the business and what’s happening in the marketplace. Having that fabric which stitches all these together is foundational. That's one area where Blue Yonder's platform excels. Start thinking about how to use this foundation to help create better plans and better execution. When you think of planning, warehousing, logistics, distribution, etc. the whole paradigm is changing, especially with e-commerce. Now, you start thinking about how to make the best decisions in deploying that inventory across the network and then at any time when the demand signal comes, you're no longer managing a static decision framework, but have the ability with intelligence to source this demand from the right location without needing to split demands. Johnston: Shri, if you can dust off your crystal ball for just a minute, could share some insight on what the industry should expect from these evolving technologies moving forward? Hariharan: We are here to read the tea leaves as they are today, but a big part of Blue Yonder's role is to imagine the future. Looking at the possibilities, it's this notion of intelligent agents — we call it cognitive business planning. A big opportunity for our customers is to supplement human talent with intelligent agents that are perusing through the data, connecting the dots for them, and allowing them to see what the likely possibilities are. Lance mentioned scenario planning, which is so important these days. The paradigm that Blue Yonder is bringing to the table is, what if we can drive those scenarios behind the scenes, look at the business objectives that somebody has set, look at the levers that are part of the art of the possible, and then decide based on the business objectives and the levers that are in play, what are the top three. Maybe we ran 250 scenarios behind the scenes automatically. This isn't a human trying to create scenarios real-time, it's the system doing it and offering the capabilities to the planner to present the top three that come closest to meeting business needs. Now you can incrementally plan additional scenarios on top of that. We believe in optimizing the whole, bringing a good answer, and then leaving that little stretch of imagination where the business intelligence that the business has can be imparted and you get to the right answer, which works for you. Then, be able to learn from that. Every decision is scored and stored, therefore, when the same situation or a variant comes up, the system is able to see what happened in the past and come back based on these parameters, with a narrower set of scenarios that make sense for you. Over time, that recommendation to augmentation to automation for the right use cases as possible. That's where I see Blue Yonder bringing capabilities to ConAgra, and the rest of the CG world, very shortly. Johnston: Santosh, we have a question about data integration between Blue Yonder and SAP. We don't want this to be ConAgra-specific, but can you share any challenges or lessons learned that you've had between data integration and management? Kumar: One of the key things we need to ask ourselves when we go into the integration is what's the right integration architecture for the solution that is in play? Obviously, depending on every customer's need, those requirements could be different. One of the objectives is to leverage the most modernized integration framework that not only positions you well for today, but also positions you for the future. When it comes to integration between SAP and Blue Yonder, we also try to decouple as much as possible — that should be the objective of any integration. We should look at what the key integration data patterns are that need to come from SAP, as well as what could come from other places where we might already have the data. For example, a lot of companies have invested heavily in the data lake, and most of the data is now in the data lake. If you look at an application where you want to extend visibility and collaboration and need a controlled tower solution, you need a lot of data, not just from the internal system, but also from the external systems. You need more real-time data visibility into those two. Based on that requirement, look at what data needs to come from SAP, what makes sense to come from the data lake, and what needs to come from the external carriers or external data systems. Then, you create your integration architecture. One thing we have learned is that once you know what the integration requirement is and the volume that will be needed to go through, doing a POC beforehand to make sure that the integration chosen is not only supported today, but will be able to support the future growth that business has in mind. Those are the key items that we need to bring into those discussions and align on before making a true technical architecture and integration decision. Hariharan: We're talking about ecosystem integration here. The minute you start thinking about supply chains being enabled by platforms, you automatically look at not only a single ERP, but multiple versions of that, multiple countries with different configurations. What I mean is, no longer are we saying the customer has to give us the most pristine data. Of course, we will all always accept the most pristine data, but within the platform, we've built capabilities that look at data, its quality, its patterns, and allow for configuration of business rules and objectives, which tell us if this data is good enough to move into a production-worthy solution or if we need to flag it with yellow and let it pass, somebody gets a warning, or it's red and somebody has to take a look and cleanse it then send it over. That's one aspect, making data integration easy for our customers and partners. The second thing is how do you learn from the quality of the data that you get and provide insights and intelligence for continuous improvement? That's where the opportunity is and this is where Blue Yonder's platform uniquely takes data as the foundation, but is able to operate on different dimensions to make sure we don't put the onus on the customer alone, but have a feedback loop to make things better for the future. Johnston: Lance, you mentioned ConAgra was working on this large project, the pandemic happened, and of course, the war in Ukraine and we know the next crisis is just around the corner. What are the lessons that you can share that you and ConAgra learned about keeping focus during disruption? Maddex: It comes down to a few things: leadership and commitment. It's easy to say it's too hard to do right now. Even without those big things you've mentioned, there's always going to be something small, there's always going to be a reason why it's too hard to do right now. At number one, when we clearly need to move to something better or need to take a step change and get to a more flexible, adaptable platform. I understand this crazy thing is happening in our business right now and we need all hands on deck working on that, but we have to keep these resources doing what they're doing, focused on the long-term and push through. There will always be an opportunity to say no. It's up to leaders to help the organization continue to say yes when it's important, and a lot of that starts with picking the right solutions. I give a lot of credit to Accenture for helping us pick the right solution in Blue Yonder, then keep us on track — whether it be project management, keeping timelines moving forward, helping with resources, as again, a significant portion of our organization was trying to figure out how to fill cases tomorrow as the store shelves were wiped clean. We made sure that we kept resources off to the side, focused on our future and focused on our technology platforms. Johnston: Shri and Santosh, do you have any final words of advice for consumer goods companies and retailers who still have a lot of heavy lifting to do on this journey? Hariharan: Absolutely. There's a two-speed architecture going on more recently. Earlier today, the GDP for the second quarter came out and there's some short-term macro forces at work. From my perspective, as I interact with leaders in companies, there's still a couple questions: First, What is the future business model that we want to grow up to be? This is profound because of e-commerce, omni-commerce, and the convergence of consumer retail, manufacturing, and distribution. Consumers don't wait. We're all used to the same-day, two-hour, one-hour paradigm. How do you become and stay relevant and reinvent yourself, but what's that right future model blueprint? Second, COVID and the pandemic, especially, drove some learnings around how you should configure supply chain networks to be resilient and sustainable. How do you drive revenue growth and profitability in that paradigm? What's the fulfillment network of the future, the logistics, the workforce? As I interact with CFOs and COOs, the question is also, what does the lens look like over the next three to 8, 9, 12, 18 months? There is inflationary pressure. There's changes in the housing market in the U.S. We are very privileged to serve this industry, and we'd love to talk to more customers and prospects about what we can do to help build out their future in a sound manner. Kumar: It's important that we keep the long-term, we can’t lose sight of the long-term because we know that these disruptions are going to stay and at some point it will be behind us. We need to have that long-term state-of-mind that provides us the flexibility to operate in this environment because this is going to be the new normal. It's important that companies take a step back, look at, and redefine their purposes. Look at their outlook, look at the trends like micro and macro that's happening, and how it's going to influence competitive positioning — laying out a clear vision. Then, taking that vision and how we translate that vision into reality, that's going to be the key. The visibility and the collaboration in the short-term needs to take the front seat and requires more focus, but eventually you need to develop an architecture, develop a foundation that not only enables you to run and operate today, but also prepares you for the future. Who knows how long the pandemic or the micro chain is going to stay. It's important that we build a foundation, we build that talent strategy. People are at the heart and center of digital transformation. Even a good and advanced solution put in place, unless it is adopted and well-accepted by the business users, it will end up becoming a technical exercise. People need to be kept at the front-and-center of this transformation and need to have the talent strategy to support that initiative. To top it off, leadership commitment is always needed, and a clear change in communication strategy goes a long way to keep the momentum on a large transformation program, like what ConAgra went through. Johnston: I can't think of better words in keeping people at the center to leave our audience with. Thank you, Shri, Santosh, and Lance, for taking the time to share your subject matter expertise. I'd also like to thank Blue Yonder for sponsoring the webinar. Have a great rest of your day.

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