Dan Malovany: Under the Hood at Mondelēz
June 1, 2013
Since splitting from Kraft Foods in October, Mondelēz International has begun to put the pedal to the metal and, in a very short time, has driven the fastest growth at the former Nabisco snack business in more than a decade, according Cynthia Waggoner, vice-president of snacks and confections, North American Operations.
Speaking at the Biscuit & Cracker Manufacturers’ Association Technical Conference in Kansas City, MO, in May, Ms. Waggoner described how separating Mondelēz from Kraft created “a snacking powerhouse worldwide, not just in North America.” She passionately talked about how the $36 billion business, as the category leader, takes responsibility to fuel the biscuit industry’s growth by energizing its 12 powerhouse brands — including Oreo, Triscuit and BelVita — through creative marketing and new product innovation.
Operationally, she noted, splitting Mondelēz from Kraft took two years and included everything from untangling SAP networks to reworking 40,000 contracts involving industry suppliers. “We couldn’t afford to mess up,” she said.
Today, Mondelēz faces another exciting challenge. “How do you take an almost 100-year-old manufacturing organization that’s a very traditional organization and make a difference in the category?” she asked. Answer: “We’re going to be an integrated supply chain that’s competitive across the globe,” she said.
Transforming from a manufacturing organization into an integrated supply chain involves interconnecting all operations, standardizing procedures and actively monitoring performance on a weekly basis. It means establishing 32 metrics to standardize and gauge operational performance around the world. It requires 100% buy-in by its 95,000 employees to create a Six Sigma-driven organization with a single mindset about goals and objectives including ensuring worker safety, reducing customer complaints, improving service, enhancing productivity and tightening inventory.
Perhaps most importantly for suppliers, she said, it also demands standardizing processes. Among its 18 North American bakeries, current production of its iconic cookies and crackers differs in every facility. “Not one piece of equipment is the same,” she said.
In the future, Mondelēz plans to develop one set of production lines for making products belonging to its powerhouse brands. For suppliers, that could mean feast or famine. “Instead of me buying one line for one country, we’ll buy lines for all countries. Whether you go to our plant in China or you go to our plant in Portland, OR, it’s the same set of lines, and it’s the same organization, and it’s the same common practices and materials across the board,” she said.
Sure, the company faces a winding road. Ms. Waggoner estimated it will take five to seven years to achieve world-class standards operationally.
In the meantime, she’s absolutely thrilled at the opportunity to unleash the power of her people. “What we’re doing with Mondelēz and where we are going with this and that and what we’re doing as an organization is really the foundation for something that is truly amazing,” she said.