Problem
A mid-sized specialty chemicals company which supplies the plastics,
inks and packaging industries, was in trouble. Its service levels were
at an all time corporate low and customer-service fill rates were below
80%. Inventory levels were at an all time high -- in an attempt to
improve service levels. Supply chain costs were nearly worst-in-class
according to a recently performed Orr & Boss benchmarking
study. Customer satisfaction was going from bad to worse.
Solution
Four important improvement objectives were identified and ultimately
achieved:
- New View of the Supply Chain: Move the
company away from viewing its supply chain organization as a series of
independent functions (silo management) to viewing it as a fully
integrated system with the same goal.
- Process Improvements: Make dramatic
improvements in the critically important supply chain processes such as
supply and demand planning, sourcing and procurement, order management,
transportation and logistics, and customer support.
- Institute a New S&OP Process:
Based upon best-in-class models, redesign and implement a highly
effective Sales and Operations Planning (S&OP) process.
- A New Supply Chain Organization: Create
a new, highly integrated global supply chain organization that is
capable of supporting lower costs, faster cycle times and higher levels
of customer service.
Results
- Inventory levels were reduced by 20%.
- Overall cost reductions of nearly 3% of sales dropped to
the bottom line.
- North American operations improved customer service levels
by 12%.
- The number of customer complaints was reduced dramatically.
