Severe supply disruptions means ‘2021 is shaping up to be anything but business as usual’

The CEO of the cereal giant said the impact on the global supply chain remains severe and ongoing, with everything from shipping pallets to truck drivers in short supply placing pressure on the amount of goods companies can produce.

“We continue to supply the world with food, though, this remains challenging as the pandemic persists. A reacceleration of COVID cases has brought on new restrictions, causing temporary shutdowns of production in some countries. Meantime, we and the vendors that supply us are having to manage through bottlenecks and shortages of materials, labour and freight, all created by demand-supply imbalances that are also pushing up costs,”​ said Cahillane.

“If you’re planning on running Product A and all of a sudden you have a shortage of one ingredient out of 50 ingredients, well you can’t run it anymore, so you have to make a changeover and switch to something else,”​ he said, adding that such changeovers in production – once rare – have become more frequent.

“There’s not one of [Kellogg’s more than 50 global plants] that has not been affected in some shape or form,”​ Cahillane added.

Stock up on Frosted Flakes

This has placed pressure on several lines, ranging from Frosted Flakes cereal to Eggo waffles to the company’s alternative-meat brand Morningstar Farms.

The company is still filling orders, said Cahillane, but it is also adding more production capacity.

“We’ve successfully added capacity throughout the world. We had what we call a vertical start-up of our Pringles line in Poland, which was done very successfully.”

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