Mondelēz International plans to deploy automation and AI at up to five distribution centers serving its direct-store-delivery network and remake a portion of its U.S. manufacturing operations.
With automated fulfillment centers, the snack and confectionery manufacturer expects to reach the points of sale faster, reduce stock and cut costs across the 55 branches the centers serve, EVP, COO and CFO Luca Zaramella said on an April 28 earnings call.
Mondelēz is also focused on bolstering its manufacturing. About 60% of the U.S. network has been modernized, Zaramella said, while some plants in the remaining 40% run on high waste and at a level of productivity "below expectations."
"We have come to terms that some of the plants will have to deal with much simpler lines as opposed to having complex state-of-the-art lines," Zaramella said. "And so we will play to the strength of the plant."
In addition, the company wants to cut costs by taking in-house the manufacturing of lines of businesses currently served by co-manufacturers, Zaramella said, adding, "We will save quite a bit of money."
The company also wants to bring all packaging for mixed packs of cookies and crackers in-house, which is important for competing in the club channel, Zaramella said. Doing the packaging itself will remove the rigidity and inefficiency of the current system.
The supply chain update provided on the earnings call came several months after executives told analysts Mondelēz had launched a multiyear supply chain improvement program designed to upgrade the company's U.S. biscuits operations.
The program is expected to increase capacity on biscuit, cake and pastry production, modernize packaging capabilities and increase network flexibility, Mondelēz Chairman and CEO Dirk Van de Put said at the Consumer Analyst Group of New York Conference in February. Van de Put expected the company to realize the benefits of the supply chain enhancements at the beginning of 2027.
Mondelēz is halfway into a $1.2 billion, multi-year overhaul of its supply chain and ERP system. The company launched the project in 2024, planning to roll it out in phases until completion in 2028.
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