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18 April 2012

Oliver Wight Supply Chain Showcase at ESC2012

Dave Manning presenting at ESC2012Monday’s pre-conference day at ESC 2012 was a veritable Oliver Wight gourmet for the day’s audience of senior European supply chain professionals. Chaired by Dave Manning, thought-provoking sessions on best practice from fellow ‘Oliver Wighters’ Jerry Shanahan, Monte Maritz and Les Brookes, were supported by inspirational customer case studies showcasing Oliver Wight work in Integrated Business Planning, Performance Benchmarking and Supply Chain Design and Optimization.

Brigadier (rtd) Chris Murray enthralled and entertained the audience with his story of improving the supply chain of the British army, whilst Monte Maritz talked about how Oliver Wight had restored Nampak Flexible in South Africa from a loss-making business into a highly profitable organisation, doubling productivity and reducing lead times by a third, at the same time as reducing the number of sites from 20 to 4, without any significant drop in sales.

Gerard de Bruijn contrasted the Integrated Business Planning implementations he had worked on with Oliver Wight at Heinz and a major international oil company, whilst Infor’s Cathy Humphreys showed how IT really can support people and process in the drive for supply chain optimisation.

Brigadier Murray of the Royal Logistics Corps served in Bosnia during the Balkans war, and was also responsible for the army’s primary distribution hub in Bicester. Logistics makes up 16% of the British army and the vast Bicester site, built during the Second World War, has over 100 ‘sheds’ housing £1 billion and 1.05 million tonnes of inventory - every thing from tents to rations.  With pressure on budgets and the status quo unsustainable, the army worked with Oliver Wight to bring its practices up to date. Focusing on process acceleration, it turned 80+ hours with 3% added value into less than six hours with 36% added value.

“The army is different from industry in that there can be huge changes in distances and demand,” said Murray. “In a war situation, we have to go from a standing start to supporting a lot of people who are a long way away.  The last hundred miles can be a very complex operation, over some of the most difficult terrain in the world, involving air support and so on. The focus is on effectiveness rather than efficiency; efficiency is great but most important is that is works. The difference between ‘click and bang’ is army logistics.”

The work with Oliver Wight reduced warehouse processing time by 74% within 18 months and the cost of hired road transport by 40% - all this with a 15% reduction in head count and whilst out-loading for Gulf War 2, the biggest operation demand for 13 years.

“Small things make a big difference,” explained Murray. “And people know how to make things better; you just have to ask them how they would do it and enable that.  Enthusiasm from leadership is vital and although things will go wrong, it’s also true to say that things you check, will go well.”

Les Brookes speaking on Oliver Wight’s Supply Chain Design and Optimization, said it is important for organisations to understand where value in the supply chain is being created and destroyed. “It’s about having control over as many nodes in the supply chain as you can. But people in glasshouses can’t throw stones so you have to get your own business under control first and then work with your supply partners to improve.”

Collaboration is vital and the recession has put this into sharp focus, said Brookes. “Putting service level agreements in place with your critical partners will help you drive performance across the supply chain but when inventory is drained nobody wants to say what the real number is because they fear exposure or a loss of confidence in the business; even the withdrawal of funding. But there is a contract choice; you can say ‘we’ll go bust together, or we’ll work out how to survive together’.”

“You need to segment demand, be responsive and agile, and be clear about your supply chain capabilities and scope.  Leadership is essential and so is knowledge - you need knowledge to change what you do and that knowledge should be in the business, not in a book or dependent on external consultants.”

Brookes concluded by saying optimising the whole should be the objective: “Decide what’s important, make choices and get everybody in the supply chain involved in planning.” 

In his presentation, Jerry Shanahan explained that performance benchmarking is ‘the motivation for change’; for both paradigms and behaviour. “The question shouldn’t be what can we do to improve, but what can we do to be best in class. It’s no good settling for double-digit growth if your competitors are growing twice as fast as you and gaining market share.  Benchmarking gives you the opportunity for innovation rather than just continuous improvement.”