In October 2021, Kellogg’s supply chain faced a tough test. Over 1,400 cereal workers across four U.S. factories stopped working, demanding higher wages and better working conditions. The abrupt stop was a blow to Kellogg’s operations and its ability to meet customers’ demand.
However, the company knew that negotiation could take a while. But that wasn’t going to be an excuse to stop operations. Kellogg’s had to find a way to ensure operations continued despite the workers’ strike. The company had cereals to deliver, shelves to fill, and customers waiting.
This moment tested Kellogg’s supply chain resilience. With a significant blow to its human resources, Kellogg’s had no choice but to act quickly. This event, known as Kellogg’s strike 2021, lasted 77 days. The factories stopped. Production slowed. Many shelves in stores risked staying empty.
Yet, despite the challenge, Kellogg’s managed its supply chain disruption carefully. In this article, we will explore how the company pulled this off. We would also explore valuable lessons African businesses and supply chains can learn from this story.
It is not about managing labour unrest but managing crisis and staying resilient.
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Understanding Kellogg’s Supply Chain Strategy
Kellogg’s built a supply chain designed for agility. Rather than waiting until problems happened, the company always planned for challenges. This was more or less why it was prepared for the crisis in 2021. Kellogg’s supply chain had always focused on:
- Proactive contingency planning
- Strategic inventory management
- Strong global production networks
This careful planning allowed Kellogg’s supply chain to respond quickly during a disruptive period without feeling the worst impact.
What Challenges Did Kellogg’s Supply Chain Face During the Strike?
Kellogg’s strike in 2021 meant 20% of cereal production stopped overnight. Workers in four main factories put down their tools, trucks and warehouses waited for products, and customers were starting to stare at empty spaces on store shelves.
Kellogg’s faced three main problems:
- Production Freeze: Factories stopped completely. This meant immediate loss of cereal production.
- Limited Capacity: Kellogg’s had fewer workers to run the production lines. Without regular staff, fewer cereals got packed each day.
- Pressure on Inventory: High consumer demand risked emptying warehouses quickly. Kellogg’s needed careful inventory management strategies.
How Kellogg’s Supply Chain Responded
Because the business was prepared, Kellogg’s supply chain reacted swiftly. The available team leveraged a carefully thought-out crisis supply chain planning. They adopted four strategies:
1. Cross-border Logistics
Kellogg’s sourced cereals from factories outside the U.S. They shipped finished products from Canada, Mexico, and even the UK. These imported cereals kept the shelves from becoming empty. Kellogg’s used trucks and ships to move cereals quickly across borders.
2. Flexible Workforce Planning
The company understood that negotiation could take time, but in the meantime, it could not rely only on striking workers. It sort out alternatives, moving salaried employees from offices to factories. Managers and other staff members took over cereal production lines.
Kellogg’s trained these teams rapidly to maintain supply chain agility.
3. Third-party Production
The alternative workforce was a great plan, but it was still insufficient to boost cereal production, so Kellogg’s partnered with other companies. These third-party businesses made cereals under Kellogg’s careful supervision. This way, the company ensured the cereals met strict standards.
The quick pivot to leveraging additional factories filled the gaps caused by the strike.
4. Smart Inventory Management
Kellogg’s supply chain maintained extra cereals in warehouses ahead of disruptions. The company planned its inventory carefully. When the strike began, Kellogg’s quickly sent stored cereals to stores.
Warehouses managed these stocks carefully, ensuring availability stayed strong.
Outcome: Maintaining Quality and Customer Satisfaction
The strike dented Kellogg’s profits, but overall, the company’s supply chain measures largely succeeded in keeping cereal on shelves, albeit at a higher cost and effort. This was still a better outcome than going dark for 77 days.
It ensured customers had access to their favorite cereals and maintained the quality. By early 2022, sales momentum resumed: Q1 2022 results showed modest net-sales growth and improved supply, allowing the company to raise its full-year guidance.
The move paid off. Customers still trusted the brand because product quality stayed excellent.
Kellogg’s supply chain achieved this because it communicated clearly with retailers. When shelves ran low, Kellogg’s informed customers immediately.
The company promised quick restocking. By doing so, customer satisfaction stayed stable, and retailers remained confident. No major complaints about quality surfaced during this period. Kellogg’s supply levels returned to normal within weeks after the strike ended.
Warehouses filled quickly, and store shelves restocked fully. The business recovered because Kellogg’s supply chain showed resilience.
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Lessons from How Kellogg’s Managed The Labor Strike
Kellogg’s supply chain was effective in managing the strike in 2021. The company’s success provided a template and several critical lessons for managing crises, whether it is labor unrest, political instability, trade wars, or even another pandemic:
1. Diversify Production Footprint
Kellogg’s supply chain’s ability to import finished goods from other countries shows the value of a global network and flexible logistics. More food companies and manufacturing businesses should consider multiple production sites (including contract co-manufacturers) for key products.
2. Maintain Buffer Inventories
Kellogg’s relatively quick inventory recovery suggests that having excess supply or rapid build plans is vital. Even “just-in-case” safety stock in warehousing can buy time during a crisis.
It can be expensive to manage, but just enough can help ensure the supply chain does not collapse during a crisis.
3. Cross-Train and Plan for Labor Gaps
Kellogg’s use of salaried staff and outside contract employees highlights the importance of workforce agility. Organizations can train non‑union employees for critical roles and have agreements with staffing agencies to cover emergencies.
Applying These Lessons to African Supply Chains
African businesses often deal with disruptions. Strikes, roadblocks, or shortages can happen suddenly. Here are practical ways African supply chains can use lessons from Kellogg’s supply chain management of the crisis:
1. Build Regional and Global Networks
African companies can partner with suppliers across borders. For instance, if Kenyan tea factories face a political crisis, importing tea from Uganda or Rwanda can help. Strong cross-border logistics prevent complete shutdowns.
2. Maintain Strategic Inventory
Businesses must keep critical goods stored carefully. A Nigerian supermarket chain, for example, can store extra rice and cooking oil. When disruptions happen, these extra stocks keep shelves full.
3. Train Teams for Flexibility
Businesses can cross-train office workers and managers. An Ethiopian clothing factory can train office staff in packaging or quality checks. During labor strikes, trained workers step in quickly, keeping production stable.
4. Work with Trusted Partners
Forming relationships with third-party manufacturers boosts production capacity. A dairy company in South Africa might partner with smaller processors. These processors can produce milk products during disruptions, keeping supplies steady.
5. Effective Customer Communication
Always inform customers and retailers about disruptions clearly. If a Senegalese juice company faces production delays, it must communicate openly. Customers appreciate honest updates. Trust stays strong when companies communicate truthfully.
Read more: Why Nike’s supply chain failed during the pandemic.
Final Thoughts on Kellogg’s Supply Chain Resilience
Kellogg’s supply chain showed that careful planning works. African businesses facing similar challenges can learn from Kellogg’s 2021 experience. Planning globally, managing inventories smartly, training flexible teams, partnering wisely, and communicating clearly ensures resilience.
Supply chain disruption management is achievable with preparation. It also allows supply chain operations across the continent to remain strong even in a crisis.
Obinabo Tochukwu Tabansi is a supply chain digital writer & ghostwriter helping professionals and business owners across Africa explore various strategies that work and learn from the success and failures of various supply chains across the globe. He also ghostwrites social content for logistics & supply chain businesses
