December 1998 | Commentary | Checking In

Got Milk?

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What did you have for breakfast this morning? A bowl of Wheaties at your kitchen table? No? You stopped at McDonald's for an Egg McMuffin, or you upscaled your way to Starbucks for coffee and a croissant, didn't you?

I know, I know. Who has time to sit down for breakfast anymore? If you actually do have time, can you afford it? Name-brand breakfast cereals cost more than four dollars a box! It is almost cheaper to get that fast-food 99-cent breakfast special than to eat a bowl of cereal.

Less time and more cost have combined to drive America to the drive-thru and away from the breakfast table and the traditional cereal bowl. Reports from Kelloggs and General Mills say your morning diet is slimming them down, causing indigestion as they both announce restructuring efforts. General Mills says it will cut 200 jobs and take a $32-million charge this quarter. Kelloggs reports profit off 32 percent last quarter, requiring management to restructure, diversify, and extend existing product lines.

Can you guess what else these cereal makers are turning to to stabilize profits and share of market? Bingo! Supply chain management. Recent announcements indicate an expansion and acceleration away from outbound toward inbound. General Mills has set some aggressive goals in this area. It will use the SCM savings to boost stock earnings and invest in more marketing. (Here's a marketing tip from someone with four voracious kids - forget the stockholders and remember the spoonholders. Cut the price by a dollar a box, and your bottom line will snap, crackle and pop.)

Moving to inbound logistics is fine, as far as it goes. But why wait until business goes south to head in the right direction? Wouldn't it be wiser to logistically redeploy when you are flush?

In any event, two giants of the breakfast table are now your logistics soulmates. How about giving them a little encouragement? Let's all have a bowl of Rice Krispies or Kix tomorrow - the breakfast of (supply) chainpions.

If you don't, that will make you a cereal killer, won't it?

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