Musgrave and United Biscuits case study, December 2011
© IGD 2011
Background

Musgrave , which trades as Budgens and Londis in the UK,
operate through a network of franchise stores and work
closely with retailer partners to deliver sustainable and
cost-effective waste solutions

Waste management is an important part of Musgrave’s
CSR programme and the retailer has pioneered the
concept of ‘one-stop-shop’ regional waste management
contracts

As well as working with retail partners, Musgrave engages
with its suppliers to reduce waste in the supply chain, one
of these companies is United Biscuits

United Biscuits also has an extensive sustainability
programme and works to
- Reduce carbon emissions and energy use
- Reduce waste sent to landfill
- Reduce water
- Reduce packaging waste
- Increase the use of environmentally friendly transport
Source: IGD
© IGD 2011
Key milestones
Through a collaborative programme, funded by WRAP and facilitated by IGD, Musgrave and United Biscuits
established a dedicated team to identify the opportunities to reduce food waste.
The team did this by collecting existing KPIs to prioritise and undertake a detailed process mapping project.
Source: IGD, Musgrave, United Biscuits
© IGD 2011
Identifying the opportunities
This process three key opportunities to reduce waste in the supply chain:
Stockless
Improve
promotions
management
Source: IGD
Review the
range
© IGD 2011
Improve promotions management
Promotional lines represented over half (56%) of Musgrave’s food waste in value terms, with
cakes, crisps, snacks and nuts identified as key areas to focus on.
Strategy
The dedicated team
jointly explored the
issues that were
contributing to waste in
the promotions process
and established four
new ways of working
Source: IGD, Musgrave, United Biscuits
- Improve joint business
planning
- Make the budget forecast
and assumptions more visible
- Better alignment of
timelines
Execution
- Increase focus on initial stock
phasing into depot
- Improved communications of
‘actual’ Vs ‘planned’ performance
- Collaborative monitoring and
adjustment of orders
- Focus on end of promotion
execution and exit strategy
Planning
- Work to one aligned process
- Better understand
accountabilities along supply
chain
- Earlier forecasting inline with
production planning
- Establish weekly meeting to
improve communication
Review
- Category team establish
post promotion review of the
process and KPIs
- The learnings will be built
into the next promotional
cycle
© IGD 2011
What collaborative planning has achieved
Before
A lack of collaborative planning led to reactive
fire-fighting and non-value added activities
There was insufficient two-way communication
and inaccurate information flows both across
functions within United Biscuits and Musgrave
and between the companies
Not a fair understanding and alignment of key
business processes (e.g. Promotions and
seasonal management)
Unclear people structures and
roles/responsibilities, with ‘silo’ mentality
between businesses and across functions.
Lack of visibility and alignment of commercial
and supply chain strategies and some conflicting
KPIs
Source: IGD, Musgrave, United Biscuits
After
The promotions process is now aligned both across
different divisions within each company and
between the two companies:
 Musgrave and UB have an integrated process
and timeline
 Individual roles and responsibilities are
understood and lines of communication are
clear
 A collaborative planning and review process has
been established to build continuous
improvement and reduce non-value adding
activities
 Improved alignment of strategic and commercial
planning
 An end-to-end approach has been established
and promotions are measured across their
lifecycle
© IGD 2011
Benefits of collaborative planning
By implementing this process, Musgrave has reduced product waste as a percentage
of sales from 2.92% to 1.16%. Promotional line wastage has reduced from 19.5% to
6.3%.
Source: IGD, Musgrave, United Biscuits
© IGD 2011
Stockless
With cakes being the single biggest waste driver (at 39% of value), the team identified an
opportunity to move cake from stock-held to stockless and prevent approximately 14 tonnes of
waste each year.
After
Musgrave worked with United Biscuits and other cake
suppliers to move to flow through or stockless model:
Before
Cake is delivered into four
of Musgrave’s depots
twice a week and held for
store-picking
 Move from stock held to stockless so cakes are delivered
to store on the same day as arriving at depot
 Completely removes depots based ‘short-dated’ wastage
 Retailers and consumers get significantly improved
product-life
 Drives promotional sales, improves availability and
removes waste
The key constraint is that this initiative also drives additional transport costs, so the move to
flow through needs to be part of the overall commercial and environmental plan.
Source: IGD, Musgrave, United Biscuits
© IGD 2011
Range review
United Biscuits and Musgrave examined the range and found that 60% of products sell
less than 10 cases a week and account for over 80% of waste, in value terms
Source: IGD, Musgrave, United Biscuits
© IGD 2011
Identifying slow selling lines
The Musgrave and United Biscuits team analysed the wastage of low volume lines. It was found that
approximately 60% of the range is slow. The slow sellers represented around 25% of sales value, 13% of total
volume and over 80% of wastage at value and 7% as a proportion of sales
Low volume lines were driving waste mainly in the cakes and crisps/snacks/nuts category. There
are some lines where the minimum order quantity (MOQ) drives more stock than stores will sell
in the product’s life.
As a result of the review the analysis
category teams now focus on the
end-to-end value chain:




Consumer offer
Rate of sales and margin
Wastage and stock levels
MOQ versus volume
Improved reporting and dialogue is
creating visibility to net profitability.
This is driving better decision making
for the existing range and new lines:
 Opportunity to drive sales
 Review store distribution
 Removing range where this is the
best commercial decision
Silo ‘ways of working’ and KPI’s are being broken down. Decisions are increasingly based on all
factors, including wastage. Five lines have been de-listed and this will reduce wastage by 0.7
tonnes per annum.
Source: IGD, Musgrave, United Biscuits
© IGD 2011
Results

The Musgrave/UB team estimated an equivalent
of 13,800 cases or 36.4 tonnes per annum of
supply chain waste was prevented during 2010.

102 tonnes of waste savings and other benefits
are anticipated for 2011 from improved forecast
accuracy, range review, stock reduction and
increased product life

The Musgrave/UB’s promotions process is now
aligned both across different divisions within each
company and between the two companies

Promotional line wastage has reduced from 19.5%
to 6.3%.

The range review led to five lines being de-listed
and greater understanding of waste is now used in
the decision making process
Source: IGD
© IGD 2011
About Musgrave and United Biscuits
About Musgrave
Musgrave Retail Partners Ireland,
which operates the SuperValu and
Centra brands, is the largest cooperative retailer in Ireland.
In the UK the retailer operates through
the Budgens and Londis brands
Member stores are provided with
central services including purchasing,
supply chain, category management,
marketing, human resources and IT.
Source: IGD
About United Biscuits
United Biscuits is a leading snacks
business producing a range of sweet
and savoury snacks including McVitie’s,
Jacob’s, Carr’s, McCoy’s and Hula
Hoops,
UB's strategy involves driving longterm sustainability in the business and
encompasses three key areas:
 Financial
 Environmental
 Community
© IGD 2011
Further information
•
IGD would like to acknowledge WRAP, Musgrave and United Biscuits in the development of
this case study
•
For more case studies on how retailers and suppliers are implementing improvement
initiatives, please visit the case study section on Supply Chain Analysis
•
Other case studies on Musgrave and United Biscuits featured on Supply Chain Analysis
include Musgrave’s initiatives to reduced miles travelled and United Biscuit’s initiative with
Nestle
•
Subscribers can:
– Gain further insight on supply chain strategy and planning, by reading our in-depth
reports here
– For a detailed understanding of leading retailers’ supply chain strategies, click here
– Read IGD’s best practice case studies on supply chain, click here
•
For any other information, please email Nick Downing at nick.downing@igd.com or call him
on +44 (0)7730822274
© IGD 2011