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Ajinomoto Foods North America (AFNA) faced significant challenges during the COVID-19 pandemic, including rapidly changing consumer preferences, supply chain disruptions, and escalating freight and warehousing costs. Rather than merely seeking to return to pre-pandemic operations, AFNA aimed for a comprehensive transformation of its supply chain. To address these issues, AFNA engaged Ernst & Young LLP (EY) to conduct a thorough supply chain assessment, which revealed substantial opportunities for improvement in logistics through the integration of technology and digital solutions. EY's tailored solution involved a holistic overhaul of AFNA's supply chain, focusing on enhancing inventory visibility and optimizing logistics operations. This included the implementation of a new transportation management infrastructure that facilitated multi-stop and multimodal shipments, automated carrier selection, and improved cost distribution and invoice verification. The project spanned three years and aimed to transform AFNA into a standout region for its parent company in Japan. As a result of these initiatives, AFNA achieved remarkable quantifiable outcomes. The company saved approximately $40 million, with an additional $23 million projected in savings through April 2026. Inventory write-offs decreased by up to 40%, and warehouse recurring fees and costs associated with product redeployment were slashed by up to 50%. On-time delivery performance improved significantly, ensuring that AFNA could meet consumer demands more effectively. The logistics transformation also streamlined operations by reducing the number of carriers from over 100 to 60, optimizing over 1,000 transportation lanes across multiple plants. Furthermore, the implementation of a new database management platform allowed AFNA to transition from manual processes to a more efficient, automated system. This upgrade enabled planners to access actionable dashboards with key performance indicators (KPIs) quickly, drastically reducing the time required for load planning from two days to just a few hours. The successful integration of AI and machine learning into the supply chain processes positioned AFNA for future growth and innovation, aligning with its mission to provide sustainable food products to consumers.
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Successfully completed $40M transaction
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