22 March 2019
Largest (frozen) snack manufacturer in the Netherlands with various factories all over the Netherlands. Produces both private label and various A-brands within the frozen snacks.
An interplay of increasing volumes, smaller batches, more extensive recipes and new labels and allergens led to an increasing non-value-adding complexity within the customer’s factories. As a result, losing control of the operation. The customer asked Gwynt for help to map out the non-value-adding complexity and to make suggestions for reducing existing complexity and limiting new complexity.
Gwynt has developed a method to score products within the customer’s range for complexity based on (overlap of) recipes, quality marks, line arrangement, average batch size and more. Subsequently, Gywnt explained how to use this method in rationalising the range, setting up platforms for new product development and setting up complexity-based costing.
The customer has gained insight into the non-value-adding complexity within the factory, as well as the costs (or loss of turnover) involved. This has directly led to rationalisation within the existing range. Using the developed methodology, the concept of complexity-based costing has also been introduced, with which new cost prices and margins of the range are now calculated. Finally, the customer has started developing platforms to keep complexity within existing and new products under control.