Heinz Supply Chain Improvements Running Ahead of Schedule

When they announced the company's results for its third fiscal quarter, executives from H. J. Heinz Company (Pittsburgh) said that productivity gains as a result of its two-year restructuring plan announced last June are running ahead of schedule. The company is reportedly on track to achieve global supply chain savings of $175 million, $10 million above the target for fiscal 2007, which ends in April. It is also on schedule to close 15 factories and will exceed overall productivity targets by 10%. To continue to drive productivity improvements, Scott O'Hara, president and CEO of Heinz Europe, will lead "global supply chain taskforce."
"Our productivity gains combined with prudent pricing have allowed us to offset commodity cost headwinds while still investing aggressively in current and future growth," said Heinz CEO William Johnson. "I am confident that Scott will leverage the excellent cost cutting experience he gained at Gillette to better coordinate our productivity initiatives and drive global best practices across our business units."
Heinz third quarter sales increased 5.0%, to $2.3 billion from $2.2 billion. Sales increased 1.4% from volume, 2.3% from net pricing and 4.0% from foreign exchange, partially offset by a 2.7% decline from the impact of divestitures, net of acquisitions. The quarterly volume increase was driven by growth in North American consumer products, Italian infant nutrition and the company's Australian businesses.

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