Elena Vdovichenko’s agenda, Supply Chain Director at Nova Linia

“Avoid flying blind”
Elena Vdovichenko, Supply Chain Director at Nova Linia JSC (32)

Nine questions about the topics on the supply chain agenda of a supply chain professional.
By: Helen Armstrong

1. What is the strategy of your company (or division/supply chain): Operational Excellence, Product Leadership or Customer Intimacy?

“Firstly, our company, Nova Linia, is a chain of DIY hypermarkets and one of the leading operators in the DIY segment in Ukraine. First opened in 2001, Nova Linia has become one of the main professional organisations selling home construction and decoration materials. Currently there are 15 stores in various cities in Ukraine. Total sales area is more than 200,000 square metres and annual turnover is over USD300 million (EUR230 million).

Nova Linia’s main philosophy is to offer customers product innovations and new solutions for home construction, repair work and decoration at a low price, every day. I would say that all three points – Operational Excellence, Product Leadership and Customer Intimacy – are key strategic pillars on which we base our activities and business processes. In other words, we create competitive advantage through superior customer service and new financial leeway through business process optimisation, which has in turn significantly reduced costs and given us financial freedom to invest in new projects and expansion.

The supply chain management strategy as a business model is aimed at long-term success through process optimisation and interaction between customers, partners and private companies in a dynamic market. In the current economic situation, the modern customer wants the purchase to be easy and convenient, fast and consistent, cheap and good quality. To fulfil this expectation and to succeed in the competitive market, we are focusing on our core competencies. We are not only improving customer service quality but are also outsourcing non-core activities to reduce purchasing costs. It is one of the leading cost-saving and revenue-enhancement strategies in use today.”

2. What is your responsibility regarding the supply chain?

“As Supply Chain Director, my responsibility is to meet the company’s goal and strategy, which is: To deliver the right product in the right place, at the right time and at the right price. In other words, to optimise business processes both within and outside the four walls of the company and to be more efficient in delivering the new products that customers want, when they want them and where they want them. By managing our supply chain, we are creating customised and robust structures to provide a value-added supply of products and the high service desired by customers – in the long term, efficiently and with as little capital commitment as possible.”

3. What are the main business challenges driving supply chain projects at the moment?

“With regards to purchasing and logistics, this is currently changing! Market competition made us reconsider our classic way of operational purchasing and led us towards more strategic areas of responsibility and a broader coordinating role. The supply chain is not the only area dealing with procurement logistics to control costs but also coordinating and leading the purchasing processes to create one smart, efficient and adaptable unit. A similar development is running in parallel in logistics and distribution. The motto is, purchasing and logistics are united in supply chain management. This inevitably expands the range of everyone’s task. Deep knowledge of all the company’s business processes – processes and interactions of the supply chain within the company as well as with our partners’ organisations – is the basic prerequisite for successful supply chain management.

The other challenge is to measure results in order to avoid flying blind. On the one hand, we need to use metrics to control the daily operations, the performance of the entire supply chain and the cash-to-cash cycle. On the other hand, we also use them as the ‘rear-view mirror’ for root cause analysis in order to draw the right conclusions and make decisions for the future supply chain management strategy.”

4. Which supply chain challenges keeps you awake at night?

“As I already mentioned, the range of tasks within supply chain management is constantly expanding. Increased competition requires constant improvement and realignment of procurement management.
On this point, two things keeps me awake. Firstly, the consistent generation of complete data –master data, consumption data, shipping status, inventory, etc. – which is required for Sales & Operations Planning and to quickly respond to continuously changing demand. Secondly, the reliability of suppliers, which always requires collaboration from a minimum of two sides: supplier and retailer. It is irrelevant that we as a retailer have highly developed business processes and software systems if our suppliers cannot guarantee what the customer wants. Then none of the ‘smartest’ systems can provide you with the solution to on-shelf availability!”

5. What do you do about these challenges?

“In this respect, we would like to be a proactive company. We do not want to wait until our suppliers reach a decision – we want to lead them to this decision! We are starting a Supplier Retailer Management project with our key suppliers to develop mutually beneficial relationships to deliver greater levels of customer satisfaction. We will cooperate with our suppliers at all levels and stages including procurement and logistics to get unbeatable competitive advantage that could not be achieved by operating independently. We are due to implement some activities including joint research and development, information-sharing, joint demand forecasting and process re-engineering, and developing a common action plan based on root cause analysis which is specific to the supplier’s or producer’s individual supply chain.”

6. Who do you like to meet for exchange of knowledge?

“I am always open and ready to seek new experiences and share my own. I like to meet any supply chain professionals who have valuable experience in emerging markets or in start-up projects. To learn about the challenges which people face in their own supply chain environment and ways of overcoming them is of great value. The reason for sharing experience is always to upgrade each other’s level of knowledge and to learn something new that can be useful, especially if it prevents having to ‘reinvent the wheel’.”

7. Which book has inspired you the most and why?

“I am currently captivated by Eliyahu Goldratt’s book The Goal. This book is about management concepts and the theory of constraints but there’s more – it is written in the style of a fictional novel that sets it apart from other books which focus on explaining a method. A key outcome of focusing on value chains and system flow is, or should be, maximising throughput. As a supply chain professional, I found a lot of useful things that I can use in practice, for instance, in the ‘bottleneck’ theory. And it is fascinating how the author describes utilising the theory of constraint methods by illustrating plant-closure threats, downsizing and even a marriage crisis. Since the Lean concept is receiving a lot of attention at the moment, The Goal is well worth reading.”

8. What do you expect to be doing professionally in five years?

“I see myself in a responsible position in supply chain management within a fast-growing company because I love working with people and bearing responsibility. Supply chain management is constantly changing and there is growing competition in Ukraine as well as worldwide. This requires a company to have its own tailored approach that can efficiently respond to market challenges.

The development of complex system solutions and strategies is a challenge which I like to coordinate and I will combine all my knowledge and energy to achieve the best results in this area. Also, I believe it is important to extend the international aspects of my current job, so I hope in five years’ time that I will be actively participating in major cross-border projects.”

9. What do you use as an agenda?

“I use two things: my physical diary, in which I write down details (not only appointments) for the coming day and at the end of the day I tick off the things that have been done, and on the computer I use Outlook appointments to remind me about key meetings.”