brad weller_nando galazzo packaging solutions presentation berlin 2001
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Sonoco Packaging Solutionstm
-End-to-End Supply Chain Solutions –
c © 2001 by Sonoco
by Nando Galazzo, Supply Chain Director, Sonoco Chairman, Global Supply Chain and logistics council, Conference Board Europe
Brad Weller, Director Sonoco Packaging Solutionstm
October 1, 2001, Berlin, Germany
Agenda
Credentials Supply Chain thoughts Sonoco Packaging Solutions Implementation Models Get started ! SPStm case studies
CREDENTIALS
CREDENTIALS
Sonoco Global Packaging
285 operations32 countries/5 continents17,000 employeesCustomers - 85 countriesTurnover - US$2.8 billion
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Sonoco Packaging Portfolio
Pack Center
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
“Only Perceptive, Adaptable and Innovative packaging companies can get closer to their customers and markets by developing extended enterprises & supply chain
partnerships”.All others …
will just be passengers during the journey
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Sonoco’s Traditional Value Drivers …
Recycling&
Reclamation
Paper TubeMechanics
&Design
SonocoSonocoValueValue
DriversDrivers
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Sonoco’s Traditional Value Drivers …
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Product
Service
ServiceProduct Dependent Model• Defends existing position• Protects existing margins• Builds barrier to competition
Limitations• Commodity model• Value extraction is limited• Costs justified on product margin• Short life time for incremental benefits
Sonoco’s Traditional Value Drivers …
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Product
Service
ServiceProduct Dependent Model• Defends existing position• Protects existing margins• Builds barrier to competition
Limitations• Commodity model• Value extraction is limited• Costs justified on product margin• Short life time for incremental benefits
Products Sourcing W. Housing Pac Center Logistics Products
Supply Chain Driven Model• Products are pushed or pulled• Fully defined value• Sustainable over time• Non-product Dependent
Possibilities• Higher point of entry (food chain)• Multi-site scalability• Long-term activity• Diversification of income portfolio
Consultancy / Implementation
Pack Center Concepts
Six SigmaInventory
Management Systems
Recycling&
Reclamation
Paper TubeMechanics
&Design
SonocoSonocoValueValue
DriversDrivers
Sonoco’s journey to add value …
SonocoProprietary
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Evolution: from products…
Paper Textile Film / Tape Specialty
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Paper PackagingFilm Packaging
Evolution: …to packaging…
Paper Textile Film / Tape Specialty
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Paper PackagingFilm Packaging
Evolution: …to services…
Paper Textile Film / Tape Specialty
Pack Design ReclamationSupply Chain
ProcurementLogistics
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Pack Center Concepts
End-to-EndSupply Chain
Management
Six SigmaInventory
Management Systems
Recycling&
Reclamation
Paper TubeMechanics
&Design
SonocoSonocoValueValue
DriversDrivers
Sonoco’s extended enterprise …
SonocoProprietary
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Sonoco’s extended enterprise …
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Consultancy Design /Graphics
Sourcing JIT /VMI
PackCenter
PlanningScheduling
W.H.Mgmnt.
Distribution ReturnRecycleRefurbish
Gillette US
Gillette UK
Cryovac
Whirlpool
MFE US
MFE Europe
3M Europe
= assessments
= implementations
DuPont Europe
• Global scale and infrastructure• Supply Chain Management• Packaging Solutions• Customer Relationships• Operational integration / Pack-Centre management
• Resources & Scalability• Consulting Methodology• Venture Capital• IT & B2B Integration• Previous project• Client experience
• Resources & Scalability• Consulting Methodology• Venture Capital• IT & B2B Integration• Previous project• Client experience
Offering experience through partnership
SonocoPackagingSolutions
SPS
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
SUPPLY CHAIN
THOUGHTS
Competitive Pressures in the Supply Chain
Global competition& industry
consolidation
Global competition& industry
consolidation
Shorter productlife cycles
Shorter productlife cycles
Speed of technologychange
Speed of technologychange
More demanding customers
& shareholders
More demanding customers
& shareholders
Environmentalrisk and issues
Environmentalrisk and issues
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
No company, on its own, has the ability to dominate the future … without:
A vision that creates growth & wealth Accelerating the speed of change Executing and sustaining improvement New partnerships that manage complexity
Competing through collaboration
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Managing for change & performance
ACCESSACCESS…
access to economies of scale access to know-how access to technology and innovation access to new collaborative models
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
An evolution toward greater collaboration
Su
pp
ly C
hai
n P
erfo
rman
ce
Partnership & Trust HL
H
Coordination
Collaboration
Transactions
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Areas of desired collaboration
OptimisationOptimisation
Co-asset andLabour
management
Co-asset andLabour
management
Smartpackaging design
Smartpackaging design
ERP systemsERP systems
SynchronisationSynchronisation
Inventory andWC management
Inventory andWC management
Outsourcing &JIT Kit DeliveryOutsourcing &JIT Kit Delivery
OptimisersOptimisers
End-to-endPackaging solutions
End-to-endPackaging solutions
Productionplanning
Productionplanning
Multi-use/reuse/returnable
Multi-use/reuse/returnable
The emergingPackaging webMarket place…
The emergingPackaging webMarket place…
1
2
3
4 InformationTechnology
Supply ChainRe-engineering
& implementation
Pack CentreManagement
Packaging &
GraphicsDesign
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Therefore…
Sonoco has developed and implemented end-to-end supply chain solutionsend-to-end supply chain solutions for its customers around the world … called
SPSSONOCO PACKAGING SOLUTIONS
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
innovative
customized
collaborative
scalable
profitable
SPSSONOCO PACKAGING SOLUTIONS
3pl
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
3pl used to be mainly about sub-contracting warehouse and distribution services …
3rd party 4th party logistics
Tomorrow’s 4pl will sit in the middle of the value chain, drawing products or components from all parts of the network as available …
managing product assembly or packaging …
and then handling the distribution to individual customers by the fastest and most efficient route.
Financial TimesOctober 2000
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
4plwith a
difference
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Extended enterprise asset management
sourcing & information management
Pack-centres / packaging operations
Packaging materials planning & inventory management
Packaging materials sourcing, procurement, leverage
Sub-contracting warehousing & distribution
Transportation management - outbound / reverse logistics 3pl
Low
Su
pp
ly C
hai
n S
cop
e
Intensity
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
design, development, & engineering support
Packaging material life-cycle management:
Return,, Re-use, Recycle
Logistics sourcing & information management
Pack-centres / packaging operations
Packaging materials planning & inventory management
Packaging materials sourcing, procurement, leverage
Sub-contracting warehousing & distribution
Transportation management - outbound / reverse logistics
Med.
4pl
Su
pp
ly C
hai
n S
cop
e
Intensity
3pl
Low
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Enterprise asset management
Packaging design, development, & engineering support
Packaging material life-cycle management:
Return, Refurbish, Re-use, Recycle
Logistics sourcing & information management
Pack-centres / packaging operations
Packaging materials planning & inventory management
Packaging materials sourcing, procurement, leverage
Sub-contracting warehousing & distribution
Transportation management - outbound / reverse logistics
High
SPS
Med.
4pl
3pl
Low
Su
pp
ly C
hai
n S
cop
e
Intensity
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Keeping the Strategic … Outsourcing the Tactical
Customer Supply Chain
MarketingFinished Goods
Planning
Factory Planning
Manufacturing Distribution
Package Planning
Packaging MaterialsProcurement
Systems & PlanningIntegration
3rd Party Logistics
Pack Product
Outsourced Supply Chain Activities to Sonoco
Vision is Critical - for instance
Reverse Logistics
Implementation
MODEL
The Methodology
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Plan
SO
NO
CO
S
up
pli
ers
MakeDeliver DeliverSource
Customers
Yo
ur
Cu
sto
me
r’s
Cu
sto
me
rs
DeliverMakeSource Source
SONOCOSONOCO
DELIVERSOURCE MAKE
• Finished Goods
Warehousing
• Shipping & Outbound
Logistics
• Procurement Pack
• Inbound Logistics
• Inventory Management
• Optimized Core & packaging Design
• RETURN PROGRAMME
COLLABORATIVESYNCHRONIZED
OPTIMIZED
CUSTOMER
Integrated Packaging Design & Life Cycle Management
Vision of an Extended enterprise
Activities -Event Driven Processe Map
Level 4
Business Processes -Event Driven Process Map
Level 3
Process Scenarios -Value Chain Diagram
Level 2
Drilling Down to Levels of Detail
Enterprise Processes
Level 1
*
Applying a Tool Frameworkto Support Supply Chain Modeling
AS- IS Assessment
TO - BEImplementation
SCOR Methodology Employs a Top-Down Approach
*
Material Flow View Identify Roles within the logical flow Establish product responsibility Analyze for performance to select
scenarios Analyze Basisof
Competition Business Scenario View
Role-based Scenarios Collaborations/Biz Documents Encapsulation of process detail
ConfigureSupply-Chain
Process Definition View Consistent Modeling Link to public protocol definitions Bounding events
AlignPerformance
Levels, Practices, and Systems
Process Specification ViewImplement
Supply-Chain Processes and
Systems
Objective of this work: Align Scenario Implementation with SCOR Methodology …
GET
-ED!
Think Big, Start Smart, Scale Fast
2002 2003 2004
Per
form
ance
2
Leverage resources
and experience
Start Smart First Plant Implementation
3
Vision
1Think Big
2001
Scale Fast
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Source: Accenture
Think BIG
Because…nothing short of a step-change will keep you ahead of the competition
Because…packaging touches every aspect of your supply chain
Think Big
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Think packaging
PackagingSupplyChain
Package Procurement
InventoryManagement
ReclamationReuse
Recycling
PackageFilling
PackagingMachinery
Engineering PackagingMaterials
GraphicsManagement
PackageDesign/
Engineering
Think Big
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Silver Bullets
Quick Wins
StrategicStep Changes
Value AchievementLow
High
High
Eff
ort /
Ben
efit
Building the Treasure Map
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Assess Performance Attributes
Benchmark Performance
Prove Scenarios
Design Supply Chain Model
Optimize
Start SMARTStart Smart
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Assess Benchmark Prove Design
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Implementation Cycle
Assessment CycleOpportunitiesPre-ScreeningPrioritisation
SPS Education & Presentation
Pre-AssessmentLetter of Intent for
Implementation
FullSupply ChainAssessment
Final Presentation and Contract
End
Implementation
Project Planning
Solution Design,Developmentand Validation
Start-up Deployment
and Transition
Continuous Operation
Benefits Tracking
and Sharing
Adjustments and Subsequent Phases
Project overview
Implementation Cycle
Assessment CycleOpportunitiesPre-ScreeningPrioritisation
SPS Education & Presentation
Pre-AssessmentLetter of Intent for
Implementation
FullSupply ChainAssessment
Final Presentation and Contract
End
Implementation
Project Planning
Solution Design,Developmentand Validation
Start-up Deployment
and Transition
Continuous Operation
Benefits Tracking
and Sharing
Adjustments and Subsequent Phases
• Define Offering andSPS Supply Chain Management Program
• Team of 3-4• 2 days per site• High level discovery• Opportunity pockets• Value extraction • Prepare LOI (?)
• Resource aligned• Project Scope & KPI’s• Steering Committee• Resource ID’d• Assess SOP’s
• Team of 4-6 for 1-4 weeks• Process and Financial Analysis• AS-IS Mapping • Stakeholders & Implementation Issues/barriers• TO-BE Mapping (game changing)• Recommendations & Implementation roadmap
• Milestones• Timing • Resources• Plan / Metrics
• Joint team formed• Duration depends on scope & complexity• QA review
• 2-6 months depending on scope complexity site, equipment, & systems• Change management
• Daily management of operations
• Assess delivered value• Quarterly performance review
Project overview
To pick the fruit Leverage resources and experience
Scale FASTScale Fast
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Infrastructure = reusable capabilities
1 2 3 5STARTSMART
8
SCALEFASTNth
MitsubishiEurope
yourcoPlant 1
It’s not about one site, it IS about leverage and speed It is not about a fad, it IS about improving the business It’s not about going for change, but it IS about going dollars
Insights:
Acceleration
GilletteN.America.
WhirlpoolN.America
MitsubishiN.America
yourcoPlant 20
6
GilletteEurope
7
3M
CASE
STUDY
SPS Europe - Global Film Manufacturer
SPS Solutions Reorganised pack matl. planning & purchasing SAP - Inventory control Re-engineered packaging supplier base Return & refurbishing with on-site service
provider Selected 3PL for warehousing, dispatch,
transport Reduction of Carrier Base from 40 to 6
Key Bottlenecks Logistically Independent Production Units - Duplication
of Logistics Activities and Costs Lack of Collaborative Planning between Manufacturing
and Packaging Replenishment Inventory Accuracy and Visibility Network of Past Relationships Size of Carrier Base vs. Synergies Interfaces and Transaction Processes - use of SAP
Cost Reduction Achieved of 11% Logistics
8% Procurement
9% Warehousing
17% Return / Recycling
20% Core Cutting (JIT)
30%
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
SPS Europe Implementation Example - Major Film Company
Source Make Deliver
Dis
pat
chCustomer Prod 2
Customer Prod 1
Prod LINE 1
Prod LINE 2
Prod LINE 3
Prod LINE 4
Prod LINE 5
Prod LINE 6
CONTAINERS MILKRUN
Con
sig
nm
en
t W
are
hou
ses Cus
tom
ers
FIN GOODSWarehouses
Son
oco
Refu
rbis
hin
gO
pera
tion
Third PartySuppliers
Sonoco Plants
Managed by Sonoco
PLAN
Managed by Sonoco and Outsourced to 3PL
12
3
4
53
3
FIN GOODSWarehouse
SPS Europe – Global Tape Manufacture
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
ConvertingOutsourcing
High
Low High
KaizenLeanPh. 1
DPOU
Speed of Implementation
Co
st
Op
tim
isati
on
/ O
pp
ort
un
ity S
ize
KaizenLeanPh. 2
ScrapReduction
PurchasingLeverage
PackagingCycle Ph. 2
PackagingCycle Ph. 3
Experience & success in 4 areas
Conclusion. What makes SPS so different ?
Ability, desire, and culture to implement & partner– Gain sharing (accountability)– Co-asset management– Resource sharing & leveraging
Outsourcing &ContractManagement
Supply chainRe-engineering& Implementation
IT integration& interfaceoptimization
PackagingDesign &Manufacturing
SPS
CredentialsCredentials
Supply Chainthoughts
Supply Chainthoughts
SPSSPS
ImplementationModels
ImplementationModels
Get Started !Get Started !
Case StudiesCase Studies
Changing the way
the world sees
PACKAGING
Sonoco Europe s.a.Boulevard du Souverain, 100 box 3
1170 Brussels – BelgiumTel: +32 2 663 45 40Fax: +32 2 675 02 25
www.sonoco.com
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