Morton Salt, one of America’s most iconic brands, has been fulfilling the world’s salt needs since 1848, currently operating with more than 20 multi-purpose manufacturing facilities across the U.S., Canada, and Caribbean. And, now more than ever, the company is using technology, innovation and data-driven insights to ensure they’re continuously improving on their strategy and processes to efficiently optimize their supply chain. So, how does one of the oldest and most established leaders in the industry shake up its network modeling approach and modernize its supply chain strategy?
Traditionally recognized by the iconic Morton Salt Girl, the average consumer may not be aware that Morton Salt produces two broad sets of products relying upon customized distribution channels. The first, referred to as “bulk” product, is primarily used for bulk de-icing salts that keep roads safe in the winter as well as bulk production for industrial customers. The bulk network consists of extraction mines, solar plants and storage stockpiles located across North America. The second set consists of “packaged” products (i.e., food, package ice melt, water softening salt and pool salt) and moves through a network consisting of mines, plants, co-packers, and distribution centers (DC). The average daily consumer of Morton Salt’s products typically purchases from this package product category.
Recognizing the need for improvement
In the years leading up to a partnership with Chainalytics, Morton Salt leadership realized the organization’s supply chain network existed as a patch-work of too many distribution centers, utilizing approximately 40 DCs in 2011. By late 2013, the manufacturer had successfully reduced this number to 26 DCs. Morton Salt’s leadership team felt there was an opportunity for further rationalization, but that a project of this scope would require greater analytics to support additional decisions involving overall network design and chose to partner with Chainalytics on this journey.
Entering the partnership, Morton Salt desired a three-phased, three goal engagement to be achieved throughout the network design project. The first phase involved building a baseline model to grow confidence with the model and partnership. Once the baseline model was established, the second phase required the design team to optimize the current network to deliver some immediate returns on the project. Finally, the third phase requested the team to create a blueprint for the optimized future supply chain network.
Putting the design into action
Once the network design baseline was established, the Chainalytics team took the model further through the creation of an “optimized baseline.” This involved changing the production quantities at the plant sites, maintaining the product portfolio at each production plant and optimizing distribution to customers. Further, the optimized baseline called for the closure of two of the network’s smaller warehouses. These steps allowed for the optimization of customer assignments to plants and warehouses in conjunction with warehouse-to-plant assignments. With the model demonstrating realized savings that were in line with the pre-established expectations, Morton Salt executed the optimized baseline in 2014.
Upon establishment of the new network, the company embraced a proactive approach and asked Chainalytics to develop an “optimized future network.” Advancing the design model, the team identified five warehouses to close or exit due to geographic irrelevance while pinpointing three new warehouse locations that would better serve Morton Salt’s client base. The future state network also incorporated three plant closures into the analysis. Morton Salt implemented the initial changes to their supply chain network in 2015. Through ongoing collaboration and continuous evaluation, the company was well on its way of realizing the long-term benefits of consistent supply chain network design.
Through ongoing collaboration and continuous evaluation, the company was well on its way of realizing the long-term benefits of consistent supply chain network design.
Building relationships beyond the model
Beyond the supply chain network design project, Morton Salt received additional benefits from its partnership with Chainalytics. The baseline establishment resulted in the validation of transaction-level data, providing additional transparency to their production capacities and storage capacities. Secondly, the Chainalytics team supported the planning processes related to three plant closures, quantifying the impact of production adjustments and distribution adjustments related to each closure. Chainalytics also provided contingency planning for temporary plant closures (e.g. weather, strikes, etc.) within the model to ensure Morton Salt could still support anticipated demand.
Next, the model team supported capital expenditure decision-making on a key plant by demonstrating that a smaller capacity improvement along with redistributing production would satisfy a capacity gap. Additionally, Chainalytics used the modeling framework to evaluate alternative supply chain configurations on specific highly seasonal products in order to support anticipated production shifts while measuring historical performance to Morton Salt’s (SAP) plan.
Realizing the value of continuous network analysis and the accompanying support associated with it, Morton Salt moved to Chainalytics’ Managed Analytics Services (MAS) partnership model in 2017. The business model allows Chainalytics’ practitioners and Morton Salt’s business experts to create a composite center of excellence built from members of both organizations. This allows Morton Salt’s leadership team to execute better decisions due to the faster turnaround time on network scenarios provided by the MAS team and consistent access to the modeling team. With the MAS team refreshing model inputs on a regular basis, the network is able to remain consistent with current conditions impacting the supply chain.
Through continuous engagement with Chainalytics’ supply chain design expertise, Morton Salt has experienced significant savings while gaining the ability to adjust the network as needed. “We considered developing our own design competency, but this would be a small team, and we would be open to risk should they move to another role either inside or outside our organization,” remarks Betsey Nohe, VP Supply Chain for Morton Salt. “Through our partnership, Chainalytics has become an extension of the Morton Salt team.” The partnership proves to be a continued success, and both organizations realize the benefits of ongoing collaboration.
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Pouring Efficiency & Innovation: Morton Salt and Chainalytics establish long-term partnership for supply chain network design
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