Business challenge
Management were under pressure from shareholders and senior executives to boost competitiveness by reducing inventory (working capital) and manufacturing costs while also improving customer service. Previous efforts to reduce working capital had resulted in a decline in customer service, leading many people to believe that they could either reduce inventory or improve service, but not do both at the same time. As a result, the ongoing Business Excellence program was not running at the pace required to deliver results.
Process
Based on previous experience and results delivered a new, updated program was launched to replicate the success across other selected sites (out of more than 100 sites globally).
Each project was designed to focus on increased production efficiency and flexibility and optimized inventory planning and reduced order lead-time in order to improve service and reduce inventory.
Supply Chain Excellence
- Detailed segmentation analysis to understand customer demand.
- Determination of optimum inventory strategy and planning parameters for each product.
- Focus on material flow within the factory.
- Working with suppliers to improve supplier delivery performance.
Organizational Transformation
- A global Project Management System (PMS) to improve information flow, decision-making and meeting effectiveness was set up.
- Task Force teams provided subject-matter expert support during the assessment, implementation and sustainability phases for each project.
- Employees were trained on required capabilities.
- Best-practices (existing a newly-developed) were documented and shared between teams across sites.
- Individual roles and responsibilities were clearly defined and aligned with business strategy.
- New work standards were incorporated to anchor the changes and drive continuous improvement.
Soft Results
- Proof that customer service levels could be improved and at the same time inventory levels and manufacturing costs could be reduced.