UK – Müller Milk & Ingredients (MMI) has announced that it is set to carry out a strategic review of its network of dairies and enter a logistics partnership with its sister company, Culina Group.

The review is part of the Project Darwin programme launched in February to save £100 million (US$129 million) in cost-cutting and margin improvement initiatives across its entire dairy supply chain.

The company has rolled out a 45-day statutory collective consultation process to assess the feasibility of capacity requirements and utilization at its network of six dairies.

Some of the strategies it said it might adopt include necessary closure of any manufacturing facility found not in line with both capacity and customer requirements.

The Project Darwin includes a comprehensive review of MMI’s operations, logistics, back office and people organisation to simplify the business, reduce costs and increase customer focus and accountability.

“Project Darwin is making excellent progress with the whole workforce fully engaged in securing a vibrant, progressive future for our fresh milk business and very positive collaboration with customers who share our desire to reinvigorate this important sector,” said Patrick Müller, Chief Executive Officer of Müller Milk & Ingredients.

“It is a matter of considerable regret that we must consult on steps which could result in a restructuring of our dairy network and capacity, but we must ensure the sustainability of our business and address potential over-capacity in our network.”

Distribution efficiencies while optimizing costs

Muller said the partnership with Culina Group, market leading chilled distribution and transport specialist owned by Unternehmensgruppe Theo Müller hopes to optimize costs while enhancing customer service.

Culina Group will assume day to day management control of MMI Distribution from June 1, 2019, and all 2,500 employees working in this area will not be affected.

MMI Distribution will be led by Ian Smith of Culina Group responsible for delivery of Muller products to its network of depots.

However, tanker operations bringing milk from farms to MMI’s dairies will continue to be managed by MMI.

“The distribution business partnership with Culina Group, a sister company within Müller Group, will put together the two major chilled logistics networks in the UK, ensuring that we can further build upon our reputation for great customer service at the lowest cost,” said Patrick Müller.