The Danish firm announced the formation of Logistics Food Ingredients (LOGFI) in its full year 2009/10 financial results statement. LOGFI was created as of 1 May this year, and its brief to “handle the logistics of finished foods in food ingredients and the supply hereof”.
Karen-Marie Katholm, vice president supply chain told FoodNavigator.com that the aim is “enhance performance towards customers, and improve efficiencies”.
Previously Danisco’s ingredient divisions handled their own logistics, so customers using ingredient from more than one division would have had to deal with Danisco in several different ways. “It was more fragmented,” said Katholm.
The new system will handle logistics, customer service and planning, and will take a global overview of how to handle each customer in the best way. New arrangements may include combining deliveries of ingredients from more than one division, and reassessing the warehousing set up to ensure supplies are kept where they will be most needed.
Katholm explained that LOGFI will also work with customers on managing inventories, closely following their requirements so it can help with planning and forecasting.
Katholm called the switch a “supply chain journey”, emphasising that the company is in transition from the old system to the new.
“It is not a quick fix, it will take some time,” she said, adding that it will evolve and develop. Eventually she expects that business benefits will be realised by Danisco, in terms of cost reductions resulting from greater efficiency, but the internal advantages will become clearer with time.
The management team is currently being recruited, and she expects it to be made up of a mix of internal and external faces. Employees will then be recruited from the company’s divisions and sales functions to the global team, and eventually several hundred employees will be under the new unit.
Widespread relocation to a central logistics hub is not on the cards, however. Rather, operations will be “multi-level” and the team will work with customers on a global, regional or local basis, according to their needs and the markets they serve.