Supply chain excellence as competitive advantage

According to Les Brookes, CEO of Oliver Wight, it is more important than ever before to optimise the supply chain in order to achieve an efficient, profitable business and to gain competitive edge. The consulting firm held its inaugural conference on 20 November 2013 in Brussels. The day featured numerous interesting case studies from companies who are all striving for supply chain excellence.

One notable case study came from chewing gum manufacturer Wrigley (part of Mars) which is using Integrated Business Planning as a springboard for unlocking potential talent. Chris Foster, Integrated Business Manager UK at Wrigley, spoke about Daniela, a high-potential employee who was working as a brand manager in the Czech Republic. To help her realise her full potential, she received career development support and was given the position of portfolio manager within Integrated Business Planning. Within this linchpin role, she is now getting to know all aspects of the company and is being primed to take on the role of marketing manager in 2015.

Basis for growth

AkzoNobel acquired Swedish metal decorating coatings and inks manufacturer Lindgens in 2010. Although analysts called this a ‘small-scale acquisition’, it had an enormous impact on production when demand doubled overnight. The company suddenly switched from a one-shift system to three shifts. There was no control over what was being manufactured and when. “It was like the Wild West,” said Mike Snape, supply chain manager at AkzoNobel Packaging Coatings Inks, animatedly as he recalled the situation with an entertaining dose of self-deprecating humour.

Service levels dropped to unacceptable levels while inventory levels rose as a result of new product introductions. “The customers who shouted the loudest got served first. The reputation of the manufacturing facility in Hull suffered, as did trust in it,” was how Snape described the chaos that the company faced. Abnormal levels of demand were not flagged up because no one knew how high the monthly order volumes were. That disrupted the production plan.

AkzoNobel took several measures. One of the key steps was to introduce order into the data and to discuss the key performance indicators on a weekly basis. The focus had to be shifted onto the important issues. The demand plan became the guideline for manufacturing. Snape emphasised the importance of accurate data: “Putting your data in order might be boring, but it’s important. It takes a huge amount of time and energy, but what you get in return is tremendous. All of your reports are right, people gain trust in the system and start to believe what it tells them.” Eventually the service levels improved and trust in the Hull facility was restored.

No excuse

Pfizer has undergone a number of drastic changes since 2009. After a SAP implementation in the first quarter of 2009 which involved the site being shut down for eight hours to allow the switchover, the pharmaceutical giant launched a sales & operations planning process. In the third quarter of that year, it enlisted the help of Oliver Wight with coaching. In the following quarter, the future of the factory in the British town of Havant was uncertain after the completion of the Wyeth merger. This was followed by a network study, and in 2010 the company embarked on a Class A accreditation programme for Integrated Business Planning. In 2011 the managing director of the factory retired and Pfizer made changes to its supply chain organisation.

For Pfizer, this sequence of events was no reason to stop striving for optimisation. “We have to continue to be excellent for our patients. There’s always a good reason not to start something and an excuse not to finish it,” said Ian Morris, Supply Chain Planning Manager at Pfizer.