Core Summary

  • General Mills Chief Operating Officer Dana McNabb said on a July 1 earnings call that the company plans a sweeping overhaul of its aging supply chain.
  • McNabb told investors that the supply chain redesign is critical because the company's existing network was built for a lower-volume era, and the overhaul is still in its early stages.
  • "We recognize the need for faster innovation and greater packaging flexibility," McNabb said. "So the key is thinking about how to reimagine the supply chain of the future to drive profitable growth."

Deep Dive

General Mills' upcoming supply chain overhaul is part of its plan to restore profitable organic sales growth by saving $3 billion cumulatively by fiscal 2030. About $2 billion of those savings will come from a sharper focus on products and trends.

According to McNabb, the network overhaul will contribute to an additional $1 billion in savings through improved business processes and new ways of exploring technology and operating models.

"These savings are critical to offset inflation, fund investments for growth, and support stronger earnings and cash flow over the long term," Chairman and CEO Jeffrey Harmening said on the call. The company expects to save $750 million in the current fiscal year, which began May 26.

General Mills' supply chain restructuring comes amid personnel changes. The company promoted McNabb to COO in June, putting her in charge of innovation and supply chain. Additionally, earlier this year, the company added "transformation" responsibilities to Chief Digital and Technology Officer Jaime Montemayor's title.

As consumer behavior becomes unpredictable and demand planning faces pressure, supply chains in the consumer goods industry are shifting. Jeremy Tancredi, a partner in West Monroe's supply chain practice, said in an email to Supply Chain Dive: "To keep pace with changing markets, CPG companies need to rethink their entire supply chain to enable faster decision-making and increase flexibility."

Tancredi noted that packaging flexibility—a key goal in General Mills' supply chain modernization—is also becoming increasingly important for CPG companies to support omnichannel distribution. "Packaging increasingly needs to be optimized for multiple logistics models and specific channel assortments to help reduce costs," Tancredi said.

Other CPG companies that have launched supply chain restructuring or major technology upgrades to cut costs and improve operations include Procter & Gamble, which has rolled out its supply chain redesign company-wide this year. Meanwhile, Clorox is migrating its U.S. supply chain and other operations to a new ERP system, and Nestlé is transitioning to SAP S/4HANA, partly to leverage AI for greater efficiency in procurement, supply chain management, and order fulfillment.