CASE STUDY

Presented By Donald Cross

ANALYSIS MAIN ISSUES

Impact on Total Business “Building bridges between logistics and all departments to
drive excellence. Resulting in pride and passion in our
1. Managing Warehouses achievements as one Company.
2. Compliance
3. Lean Culture
4. New Global Logistics.ORG/ Local
5. Sales & Operation Planning (S&OP)
6. Process Harmonization To Improve Cost Efficiency
7. Delayering of Supply Chain 3-1
8. Consolidate Supplier Base & Transport Costs
9. Indirect Spend Optimization
10. Project Start up With PMO

11. Measuring & Develop metrics to optimize logistics

12. Indirect optimization projects with stakeholders/ Group
13. Management – Americas logistics team “No I in team”
14. Compliance & Data transparency (create visibility creates control)
15. Total Customer Service Solutions/ Service Levels/ Frontline
16. Develop Warehousing KPI’s/ Benchmark
17. Transport spend report Air, Ocean, Domestic (Air Freight Spend)
18. 3PL/ Freight Partners QBR/Budget/ Service
19. Multiple Supplier Consolidation
20. Creating a Culture for Change
Managing
Warehouses 3PL
& Satellite
GENERAL OUTSOURCING MOTIVATIONS FORMING A CROSSFUNCTIONAL TEAM
Increase Flexibility and Responsiveness
Increase Speed to Market
Increase Improve Speed to Market
1. FORM A CROSS-FUNCTIONAL TEAM—including representatives from
multiple disciplines and departments across your enterprise.
Focus on Core Business
Revenue Gain Access to new Technology
Gain Access to Advanced Skills
Improve
Capabilities Reduce Operating Costs Purchasing
Reduce Capital Investment
Transform Fixed Variable Costs Production
3PL
Manufacturing
Reduce
Costs
COLLABORATION
New Idea’s
Sales &
Finance Process & Continuation
More
Marketing
Success
VALUE 3PL DRIVERS
1. Safety & Security - Compliant medical device warehouse facilities Information Customer
2. Detailed Tracking - Web interface complete visibility Technology Service
3. Daily Updates - KPI monitored uploaded (D-LOGPLUS)
4. On Going Value - Ongoing process improvement & cost reductions
5. Accurate on Time Deliveries - Optimization and Just in time
6. Real Time Metrics - Performance dashboards/ KPI’S In the cross-functional team, include colleagues
7. Cost V’s Insource - Budget & Value responsible for managing the company’s brand
8. Transport Costs Insource to Outsource and orchestrating the customer experience.

1) COMMUNICATE 2) VISUALIZE 3)
ACKOWLEDGE
Complianc
e
COMPLAINCE CHALLENGES
EFFICIENT COMPLIANCE – Process Harmonization to Reduce Costs

The compliance space has matured over a period of time

and is aiming for achieving efficiency along with
effectiveness. Efficiency leads to cost reduction but
efficiency cannot be achieved unless the compliance
initiative is automated and controls are optimized.

Controls cannot be optimized unless the controls are

standardized. No amount of effort for standardization of
controls will yield results unless business processes are
standardized.

Efficient compliance means following a consistent

framework approach to achieve efficiency in reporting,
consolidation and evaluation of controls. It is strategic,
proactive and a long term compliance perspective
Lean
Management
LEAN MANAGEMENT = LEAN CULTURE

Overview Lean Management

Goals:
 Steady Cost Reduction Approach:
 Zero-Defect-Quality
 No Raw Material, finished goods or WIP
 Lean Management is focusing on the organization of all resources
 High Production Flexibility
in a supply chain by eliminating non value-adding activities (waste)
in order to achieve the optimal profitability.

3 Cornerstones Of Lean Management: Standardization of the production program

 Principle Reduce complexity by using components
1) Avoid Capital Cost
2) Standardized Material Flow

 Just in Time (JIT)

1) Always provide the right material in the right time, in the right Facilitate Production
quantity at the right place.
2) Only when reaching the minimum quantity (consumption of
which will cover the time for new delivery) a new order will
placed (Kanban-principle), so that there is not big inventory Accelerate Production
buffer.
LEAN MANAGEMENT = LEAN CULTURE

Order Email Request Phone/Email

Example:
Finalizing the Supplier Customer
Customer Service
Value stream map Confirmation Email Confirmation Phone/Email
Sales & Customer

Overnight Delivery
3PL Warehouse

! ! !
5 pieces 2 pieces 2 pieces
Stage 1 5 Hours Stage 2 3 Hours Stage 3 0.3 hours Final Check
1 User 8 hrs shift 2 User 8 hrs shift 1 User 8 hrs shift 1 User 8 hrs shift

Process Time: 30 Min Process Time: 60 Min Process Time: 90 Min Process Time: 30 Min

Changeover Time: 5 min Changeover Time: 25 min Changeover Time: 15 min

Yield: 95% Yield: 75% Yield: 92%

Total Lead Time (value Batch Size: 1 Batch Size: 1 Batch Size: 1
Adding and non value
adding time) 5 hrs 3 hrs 0.3 hrs (8.3 hrs)
(3.5 hrs)
Value Adding Time 0.5 hrs 1 hrs 1.5 hrs 0.5 hrs
(39%)
Challenges of Global Sales & Operations Planning (S&OP) Obstacles

• What do we want to achieve • Language barrier (Chinese, Dutch, English & Spanish)
• Where do we want to be in short & long term • How does each region define success
• Clear vision & strategy, measurable plan
• How service levels are calculated and measured
1) New Markets Growth, Revenue & Profit • Inconsistencies will exist from Region to Region
2) Expansion into New Geographies Improve Rev 2% to 5% • Enterprise Resource Planning (ERP) & Acquisitions
3) Be ahead of competition
Accounting Sales Manufacturing
4) Cost Reduction Reduce Inventory 7% to 15%
5) Launch New Product

• Do we want more than one S&OP? Financial Evaluation Inventory Producing Efficiently
• Global companies AVERAGE more than one S&OP (Mix & Location) (Capital & Investment) (Hold More goods)
• Risk: Cultural and Regional differences Each Department focuses on own metrics and goals rather than company goal!

Multi Million Dollar Company with Operations 40 Countries “S&OP BIG BANG TEST”
Implemented in North America
1. Updated Forecasts Leads to Sales Plan
Obtaining Global view of demand, supply 2. Production & Inventory Plan
Reduce
Improve & inventory is a major challenge 3. Customer Lead Time (Backlog Plan)
Sales 4. New Product Development Plan
Inventory Forecast
Data highly static and inconsistently represented 5. Strategic Inefficient Plan
6. Resulting Financial Plan
Increase Unable to Slice and Dice data (regional & global)
visibility future
demand

Americas EMEA AsiaPac

IMPLEMENTATION PLAN
Commence data gathering process, site visits,
Operational methods
Review the current operations and facilities to
establish suitability. Produce Data Report.
Compile specification of Services & or
Facilities
Required document.
Approach suitable contractors with an Enquiry
Document to establish capability and interest.
Develop and issue Invitation to Tender (ITT)
document,
prepare shortlist, arrange reference visits, field
enquiries and select.
Prepare Contract & Service Level Agreement documentation; assist with
negotiation.
Assist with implementation and monitoring of
contractor performance.
SATELITE WAREHOUSE
First Step: Organization V’s Software
Data Material Flow: 1) Receive
2) Store
3) Pick
4) Ship
Gain real-time access and insight into warehouse operations, no matter
where warehouse activities are conducted.
Decrease inventory levels and carrying costs with greater visibility
across all
warehouse activities, regardless of system
Reduce or eliminate the reliance on costly ERP and standalone warehouse
management systems
Improve flexibility and adaptability for managing remote, in-transit and
satellite warehouse and storage locations
Optimize warehouse labor and reduce overtime with improved access to
workforce requirements and information
Enhance warehouse productivity with automated and accurate picking,
put
away and inventory transfers
Thank you for your
time.