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 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 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.
