Supply Chain Agility
The Agile supply chain is flexible and fast: Time-to-Market is controlled and new products are delivered on time. The supply chain capabilities respond to market changes and new customer demands, deliveries are delivered quickly and on-time with a minimum of stock.
The requirements for agility are an increasing challenge for many companies – markets and requirements and demand patterns change faster than ever.
There are many ways to Agility: Digital seamless processes, skills development, organizational alignment and process optimization are some of the most important elements.
4IMPROVE has extensive experience in increasing agility in supply chains, through Agil product development, Time-to-Market reduction (> 60%), increased delivery accuracy (> 45% p), flexible and efficient distribution among others.
Grundfos is a global company, that develops and manufactures pumps for different purposes, one being circulation pumps for central heating. Grundfos have centralized component factories.
In the stamping plant, they have large presses and complex stamping tools that represents significant investments in both the machine and the tooling. Grundfos were facing significant investments due to growth of 75% over the next 3 years. The machine utilization were low and the load was above 80%. To be able to grow without investing in machines Grundfos needed to increase the utilization of equipment through rethinking their manufacturing control concept.
The solution was a focused initiative creating manufacturing concept, which is able to handle unpredictable situations without loss of utilization of the equipment. Systems thinking helped create a deep insight in the current way of working in production and support functions, based on facts collected from the shop-floor. The concept takes multiple parameters into account in the planning and execution process e.g. manufacturing, maintenance, tool management and unstable processes creating the agility to respond to unpredictable situations. Gaining the ability to adjust plans and optimize machine, workforce and tool utilization. Making the manufacturing planning process robust to deal with variation in the process without compromising the overall output and supporting the management with “ONE” set aligned KPI’s setting the right focus. The concept has increased the productivity and OEE with double digits.
4IMPROVE delivered the approach and project management developing the solution. 4IMPROVE further delivered the analysis, conceptual ideas and the framework for the change process end to end. Grundfos has taken full ownership of the new process and have successfully continuously improved the concept further.
Digitization is a two-edged sword. On the one hand it enables many new opportunities, on the other hand it challenges and disrupts business processes and business foundations.
We consider the digitization wave a significant enabler to streamline the supply chain, an innovation inspector and a technical discipline – Big Data, Internet-of-Things, Cloud Solutions. Digitization has a business, an organizational and especially a human dimension, which is often overlooked, but requires focus and experienced change management at eye level!
Having extensive experience in implementing digital processes and business systems, we assist companies in potential coverage, counseling, development and implementation of digitization strategy and support companies in technology choices, practical development plans, project management, design and development tailored to the individual company’s existing solutions and maturity.
There are several roads towards digitalization. 4IMPROVE believes that the chosen road should be adapted to the size, resources and maturity of the individual company. Moving from beginners in digitalization to masters is highly affected by leadership and approach.
One company might have the resources and buffer to run risks and call for progressive and trial-and-error approach moving quickly into the masters’ area. Others are restricted on resources, culture or other legacies which require a more conservative and carefully planned process. Some companies might be able to move the direct way by balancing the two roads cautiously. In 4IMPROVE’s experience the best foundation for results comes from a solid approach securing width and depth of a digital vision, getting the priorities right and setting out the game plan considering the practical reality of the company. Delivering the results requires short waves of delivering carefully designed packages, with leadership, ownership, commitment and careful stakeholder management at a practical level with the employees in operation.
Tropica Aquarium Plants is a small to medium-sized company, however, it is a market leader in producing aquarium plants. The company is in rapid growth and expanding production footprint from Denmark to include several sites in Asia. The market is changing from customers being traditional pet shops with live animals and plants on displays and keen service-minded professionals selling products over the counter, to low-cost, low-maintenance, self-service grab-and-go stores and supermarkets, with plants packed in vacuum packages.
The challenge for Tropica is two-sided. On one side, the company needs to standardize and improve its administrative order and planning processes in Denmark, to be replicable for Asian operations and enable scalability without getting out of control. On the other side, the company needs to rethink its entire product and production process to ensure reliable plant of size and quality to enter the new vacuum packages and market.
As a means for supporting Tropica’s growth, market change and competitiveness in the future, digitalization was put on the agenda. However, for a company of its size and level of activities, there were neither the knowledge, talent nor resources needed to initiate the digitalization journey, only the idea that something had to be done in this area.
4IMPROVE was external support, in getting a structured approach through;
- understanding of the business model, proposition and strategy
- common overview through Value Stream Mapping of the physical flow, information and planning processes and data points and reporting
- the pains and gains
- the technologies available in the market and their value proposition
- the digital vision and strategy where the company would
- the required business foundation to enable the use of the technologies
- the current technological and cultural situation to build on
- grouped and prioritized initiatives
- a practical game plan taking into consideration resources, organizational culture and maturity.
The digital vision the practical game plan for Tropica secures deliverables on three levels of Digitalization;
Figure 1. Source: The Danish Supply Chain Panel
On a technology and process level Tropica is secured to;
- Electronic data capturing in terms of time spent, delivery and waste from each critical process point and couple the data with plans and targets as a foundation for continuous improvement, planning and customer interaction – securing a data-driven performance management and development platform which is replicable for different sites.
- Integrated planning and extended EDI application with customers providing live and integrated delivery and production plans for suppliers, production zones and sites; delivering quick response to customer demands, reduced waste through obsolete demand plans and reliable feedback to customer requests.
- Better use of ERP and data-integration providing automated and effective administrative processes and agility.
- Robotized production delivering effective and precise control of plant growth and production with reduced dependency on key personal, which enables cost-effective flexibility in volume-changes, scale and replicability for sites.
On a business level it is ensured that Tropica;
- Stays competitive and market leader.
- Is first mover and capable of adapting to the ongoing radical market change.
- Establishes a solid foundation and business model capable of scale to support continuous growth and replicable for extending to multi-sites.
Complexity may be the main reason why many companies lose sight of their supply chain and profitability fails.
Complexity can be found everywhere: Unsatisfactory administrative business processes, emerging organizational and collaborative structures, complex product / market portfolios, creation of new offshore units, merger of companies / products, complex inventory and production routines etc.
Complexity Management is often the high road to a significant cost reduction since the company’s cost level correlates directly with the supply chain complexity. 4IMPROVE has experience in: Revision of the company’s footprint, development of production/management concepts, simplification of management tasks/systems, redesign of product portfolio etc.
Egernsund Amba manufactures and sells tile bricks. The bricks are sold from a central sales office and manufactured in seven Danish plants.
As part of their growth strategy, it became evident that the complexity of the current paper based inventory and production planning was insufficient. The communication level between the plants and the central sales office was exhausting and preventing the business from growing.
First initiative focuses on introducing system supported production planning and inventory management to simplify the business process from order to deliver. Keeping the setup as simple as possible without adding complexity to the business processes was a prominent issue. The master data setup maintenance was clustered into few groups in order to reduce complexity and the reporting into the system was kept to an absolute minimum matching the needs of the business. The system support creates transparency across the organization, which enables cost effective processes – from the order to the delivery.
4IMPROVE delivered the plan, analysis, design, implementation facilitation and supported the project management throughout the configuration. Furthermore, the business process and business understanding expertise. Egernsund Amba has led the project and taken ownership of the process and future support of the roll-out. The few customizations were programmed by the IT supplier.
The Health care industry has always been highly exposed to complexity. The recent years, a wave of economies of scale and digitalization has flooded the industry with giant hospitals and digitalized journals and processes. Tendencies that typically increase the complexity in the governmental health care system.
In Denmark, diagnosis right is one of the most important governmental KPIs. The Department of Respiratory Diseases and Allergy on Aarhus University Hospital had a diagnosis right fulfilment below 65% resulting in a stressful work environment and longer waiting time. This was primarily due to difficulties in balancing the resources and demands – and a general loss of perspective.
With inspiration from the production industry, 4IMPROVE delivered a planning tool for the administrative staff to ensure the correct prioritization. In close corporation with the project group, 4IMPROVE facilitated workshops focusing on reducing complexity through defining internal processes, standard diagnosis procedures and defining relevant key figures to track the performance development. As a result the management regained control and diagnosis right increased to 95-97%.
Today many companies occupy distant markets, globalize supplier base/sourcing, increase outsourcing and off-shoring of production, collaborate with global distributors etc. The increasing globalization places high demands on the organization: Standardization processes, knowledge sharing across organizational units, integration of systems and routines etc. But globalization also paves the way for a number of new opportunities: New cost-effective production/distribution structures (Footprints), Market and Customer Care, Competence Enhancement.
With a long-standing experience in handling the growing global agenda, we provide professional assistance to our clients in their efforts to profit from the increased globalization.
SFK LEBLANC is a global company that develops and supplies complete, automated slaughter systems for most of the world. Development and production in Denmark, Holland, Canada and China.
The company is based in Denmark, and the companies in the Netherlands and Canada are acquired. In order to strengthen the company’s global position and as the basis for further growth, SFK LEBLANC needed to redefine its global structure.
The focus of this work was the development of a new transparent global set-up, which, on the other hand, utilized the various competencies and opportunities of the units, and created an economically future-proof scalable structure in order to accommodate regional differences in markets, products and traditions. The new global set-up was developed by a regional / functional working group. The structure as well as a description of the new function was supported by a series of workshops as well as illustrated by a graphic designer.
4IMPROVE has delivered the project’s approach and facilitated the development process. 4IMPROVE has correspondingly delivered many analyzes, ideas and other inputs to the concept work. SFK LEBLANC is currently in the process of further expansion and merger of two to three companies in the global structure.
Sustainability is a relatively new area of attention. It has both an environmental, a businesslike and a social dimension.
Companies’ environmental fingerprints receive a great deal of attention especially emissions of CO2 and other greenhouse gases that affect the company’s logistic set-up. Commercially, there is increasing focus on environment/work environment and child labor. Finally, the social dimension, where companies – and especially the company’s subcontractors – are expected to take a social responsibility.
For the individual company there is an increasing challenge of “monitoring” – or perhaps ensuring that the company’s suppliers comply with the International Code of Social Responsibility, or the company’s internal procedures.
4IMPROVE delivers Supplier Audits, Identification of New Suppliers etc. to several Danish companies sourcing in the East.
The first COOP initiative to make a web based retail shop delivering groceries was IRMA.dk.
In order to grow the business and rebrand, the site was named “COOP MAD.dk”. The plan was to expand the number of sellable items with 50%, staying within the same footprint. The challenge was two faced, one was rebuilding the warehouse to expand the facing and the second was optimizing the product layout and continuously adapting the layout to the ever-changing assortment.
The solution focused on creating layout optimized for picker performance and a process to sustain the high productivity by monitoring the quality of the product layout continuously. First, creating a high frequency horseshoe for fast movers and side lanes for slow-mover. Secondly, creating a heat-map monitoring the effectiveness and enabling sustainability of high performance.
4IMPROVE delivered the conceptual idea of productivity increase – in terms of layout and KPI tool to monitor the performance and the product lay-up. Furthermore, the project management of the physical change was delivered by 4IMPROVE.