Better Forecasts, Less Waste Boost Grupo Bimbo’s Profitability

Bimbo Bakeries USA (BBU), part of $15 billion packaged-food company Grupo Bimbo, had what it described as a “persistent and unrelenting” waste problem. It was discarding unsold food at a rate double that of its peers, creating significant economic and environmental challenges. “We continued to build this waste into our operating budget, and we had to put a stop to it,” says Tony Gavin, executive vice president, BBU.

BBU’s executive team issued a bold challenge: Create a “perfect order” system that would reduce waste, while still driving growth. This call to action catalyzed a company transformation—one that couldn’t be executed within a boardroom. “We decided to engage our frontline associates into major transformation,” says Morgan Smith, vice president, BBU. “They had the answers that we just didn’t have.”

How We Helped

So the joint BBU and Bain team went directly to the source, talking to frontline employees to find out why there was so much waste. While there were several issues, two main problems surfaced: The first was an order forecast that was highly inaccurate for any given SKU, in any store, on any day. The second was a food-ordering system that made it hard to make “good” adjustments to those forecasts. Given these two challenges, frontline workers mainly followed their gut when ordering products. They lacked the data to make strong decisions, and the information they did have was spread out over several pages and ultimately deemed untrustworthy. As a result, the data was largely ignored in favor of ordering with a bias toward making sure they never ran out of a product.

To reduce waste, we needed to dramatically improve forecast accuracy and give the front line a tool that would build trust and enable them to make targeted interventions. When we couldn’t find any off-the-shelf software to solve these problems, we harnessed the power of Bain Micro-battles System® to build our own. We assembled a cross-functional team, bringing together members of BBU’s front line with the consulting team, data scientists from the Bain Advanced Analytics Group, and design strategists from Innovation & Design.

In just 2½ months, we built a forecast that was 35% more accurate. At the same time, we designed a new ordering-tool prototype with a user-friendly experience and the power to reinforce effective ordering. We then tested the proven solution in three more sites. With BBU’s commitment to experimentation spurring continuous improvement, we made hundreds of changes to get it right.

The final tool, dubbed “ION,” was built on a simple, but potent ethos: “Make it easy to do the right thing and hard to do the wrong thing.” The tool was designed to enable the front line to make smart, informed orders in the moments that matter. Employees could view their route overview and stores, and quickly identify key metrics, including categories with high accuracy, or those with low volume. And as users entered more information, the algorithm got smarter. 

The Results

Critical to ION’s success was defining the path to scale early in the process—and garnering frontline advocacy for the scale solution.  This meant not only identifying the architecture and partnering with the right experts, but also implementing a plan for change management and training.

Once launched, the tool’s impact was immediate and broad. Predictive analytics and a purpose-built user interface removed the guesswork; the time needed to make and adjust orders was cut by 50%, releasing organizational energy to focus on growth. And adoption cultivated satisfaction. Early versions of the solution yielded a Net Promoter Score℠ of 50, compared with an average of –8 for IT enterprise resource planning (ERP) applications.

A year-long journey took us from early sketches to a solution that could be scaled—one that not only made forecasts more accurate but, crucially, made ordering more streamlined and efficient. And this changed not only the business, but employees’ well-being. “It makes me emotional because these frontline individuals have more time with their families, and they make more money to support their families,” says Troy Rudd, market sales leader, BBU.

BBU had hoped to cut waste by 20% without compromising growth. It actually cut waste by 50% and achieved record-setting growth rates, all while changing behaviors—and lives—in the process.