Kraft foods poised to axe 50% of its suppliers...

Kraft mulls axing its supplier base
Kraft Foods is evaluating plans to cut its supplier base in half in a dramatic move that would impact over 30,000 companies, according to media reports.

Reuters noted that the US food giant is seeking to save around $300m annually and has identified consolidation of its purchasing of everything from ingredients to packaging materials as a way of helping to achieve this objective.

The review of purchasing comes as the company tries to simplify a procurement framework that evolved as Kraft acquired numerous companies over the years, the news agency reported.

“This is probably the first truly holistic view we’ve taken,” Julia Brown, senior vice president of procurement at Kraft, said in an interview with Reuters.

“We’re essentially taking a white sheet of paper and saying ‘what is the right number of suppliers to support this particular category, who are they, what is the capability we need for now and in the future, and does the current supplier base have that.”