european supply chain management issue 100
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The latest edition of European Supply Chain ManagementTRANSCRIPT
ESCMEUROPEAN SUPPLY CHAIN MANAGEMENT
ISSU
E 10
0 £
3.50
Earl
y E
dIt
Ion
Adapt to change There are some key principles to
follow when you are creating a robust supply chain Page 14
The cloud makes it clearerOpening up simulation capabilities to a wider market through cloud computing
has massive potential Page 7
Business transformation A new ERP and voice WMS system has brought multiple benefits to a leading UK wholesaler Page 12
databiggerBig gets
By harvesting unstructured data,
companies can glean insights that will enable
them to keep ahead of the competition
CHAIRMAN ANDREW SCHOFIELD
GROUP MANAGING DIRECTORMIKE TULLOCH
MANAGING EDITORLIBBIE HAMMOND
STAFF WRITERSKIRSTy BIRKETT-STUBBS
MATT HIGHjO COOPER
ART EDITOR & ADvERTISING DESIGNjENNI NEWMAN
PRODUCTION MANAGERFLEUR CONWAy
PRODUCTION ADMIN [email protected]
EDITORIAL ADMINEMMA HARRIS
SALES DIRECTORDAvID GARNER
BUSINESS DEvELOPMENT MANAGERMARK CAWSTON
HEAD OF RESEARCH PHILIP MONUMENT
EDITORIAL RESEARCH MANAGERSLAURA THOMPSON
TIM EAKINS
EDITORIAL RESEARCHERS RyAN SADLER
DAWN FOORD
ADvERTISING SALES MANAGERROB WAGNER
SALES MANAGERGRAHAM ALLINSON
SALESjOE WOOLSGROvE
FINLAy jOHNSONDARREN jOLLIFFE
OFFICE MANAGERTRACy CHyNOWETH
© 2013 Schofield Publishing Limited
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T: +44 (0) 1603 274130F: +44 (0) 1603 274131
www.europeansupplychainmanagement.co.uk
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ESCM Editor
A date with dataAcross all the titles I work on, the topic of ‘big data’ is something that is recurring
time and again. It’s not surprising, considering the amount of information that
is generated by businesses on a daily basis. According to Tim Minahan in this
issue’s lead story, best-in-class companies are deriving extraordinary value from
this data by mining it for hidden insights on their customers, products, and
business activities. Of course, new technology is also springing up to handle this
amount of info and get it to the people that need it. As Tim concludes: “It’s a
powerful proposition.”
libbie hammond [email protected]
www.europeansupplychainmanagement.co.uk 1
www.europeansupplychainmanagement.co.uk2
3 Big data gets Bigger
Traditional relational or structured data may
serve as the foundation for analytic efforts.
But by combining it with unstructured
information, companies can gain additional
insights that enable them to make better
business decisions
7 the cloud makes it clearer
The cloud offers almost infinite computing
power negating the need for high
performance hardware. This means that
complex multiple simulation tasks can be
carried out in parallel, enabling users to study
a large number of design alternatives
10 stop chasing the tail
From its experience working with dozens
of companies, Accenture has found that tail
spend comprises at least ten per cent of a
company’s indirect spend. For a company with
£1 billion in indirect spend, the tail is likely to
be £100 million or more
12 Business transformation
The Health Store realised that a fully
integrated warehouse management
and ERP solution could replace all of its
systems with one integrated solution. BCP’s
Accord emerged as being most suitable for
the business
14 adapt to change
Many companies have already woken up to
the value good supply chain management
brings to business, even in a period
of austerity. They know their focus on
supply chain delivers them efficiency and
effectiveness in day-to-day business
18 Holemans
Specialists in the production and marketing
of gravel and sand, family owned Holemans
Group has developed its expertise and
successful corporate activities steadily
since 1873
20 schmitz Cargobull
Schmitz Cargobull (Danmark) is a subsidiary
company of the German-owned Schmitz
Cargobull Group, the biggest and leading
manufacturer and supplier of semi-trailers
in Europe
22 Mölnlycke Health Care
Mölnlycke Health Care is one of the world’s
leading providers of single-use surgical and
wound care solutions to the professional
health care sector, and takes a holistic and
caring approach to the patient
18
14
3
ESCM
Features ProFiles
22
Nearly 14 billion years ago, massive forces of gravity
and friction converged to spark the big bang that
gave life to the universe, as we know it. Today, the
same type of convergence is occurring in the business world.
After years of technological innovation and aggressive
IT investment, companies now sit atop a vast volume of
data on their business activities. The sea of structured data
on production, marketing, sales and pricing, HR, finance,
facilities and operations, and other internal matters is matched
by transaction-level data from supplier, customer, and
partner relationships. Best-in-class companies are deriving
Tim Minahan confirms big data is getting bigger. But so too are
the possibilities for businesses that effectively harness it
databiggerBig gets
IT
www.europeansupplychainmanagement.co.uk 3
www.europeansupplychainmanagement.co.uk4
extraordinary value from this data by mining it for hidden
insights on their customers, products, and business activities.
But the convergence of major technology shifts like cloud
computing, mobility, and social and business networks has
sparked an explosion of a new class of ‘unstructured’ data -
texts, tweets, blog posts, web-based videos, and other social
postings – that now greatly exceeds traditional data types
found within most organisations. According to a study by
independent research firm Aberdeen Group, the vast majority
– more than 83 per cent – of the information companies now
have is unstructured. And companies that effectively harness
such information stand poised to gain unique insights that
give them significant advantage over their peers.
Online networks have been key enablers of the first-wave
of globalisation, making it as easy and transparent to conduct
business with a partner on the other side of the world as with
one across the street. Consumers tap into personal networks
like Facebook, Twitter and Amazon.com to learn, share and
shop better. Leading companies leverage business networks to
collaborate more efficiently with their employees, customers
and other trading partners.
But networks are about more than just connecting
companies, people and processes. Their real power lies in what
goes on inside them - all the interactions, transactions and
commentary - and the massive amounts of unstructured data
that they generate. It is from this data that the next wave of
innovation and business productivity will come. Traditional
relational or structured data may serve as the foundation
for analytic efforts. But by combining it with unstructured
information, companies can gain additional insights that
enable them to make better business decisions. And with the
right technologies, they can do it in real time.
Consider how consumers are already benefitting from the
convergence of structured and unstructured data:
l Amazon.com harvests the buying patterns (transactions)
of its customers to recommend complementary products for
up-sale. It also uses community-generated ratings and tips to
further guide buying decisions.
l Twitter and Facebook mine unstructured comments to
develop psychographic profiles of users and deliver highly
targeted advertisements (e.g., promoted Tweets) that have
much higher conversion rates than traditional advertising
approaches based on demographic segmentation alone.
Tim Minahan
Tim Minahan is senior vice president, network strategy and chief
marketing officer at Ariba, an SAP company. In his role with Ariba,
Tim is responsible for the strategy behind the Ariba Network, the
world’s largest and most global business network, and for the design
and execution of effective messaging, go-to-market programs, and
marketing initiatives to fuel its growth. He is also a widely recognised
expert on cloud, supply chain management, and business-to-business
networks and technology issues.
l The Facebook ‘Like’ button - now pervasive on websites
ranging from online stores to leading news media outlets to
political blogs - offers far more accurate (and quicker) insights
into buyer preferences and public opinion than traditional
focus groups and straw polls.
l New online and mobile banking options from startups like
Square are capitalising on the convergence of mobile, cloud,
and social to foster entirely new payment models, where a
consumer’s mobile device can, using geo-location information,
detect when its owner is in his favourite coffee shop, use the
Cloud to automatically place an order, and virtual financial
networks to settle out between the customer, the shop’s register
and the bank. If the consumer is so inclined, he can include
a tip and even post a rating or comment on his visit via
integrated social channels.
This new ‘internet of things’ is not only making our lives
more efficient, it’s unleashing a host of new data that can be
used for everything from social research to targeted marketing
to post-sale service. Leveraging the hundreds of billions of
dollars of financial transactions and transactional data along
with relationship history that resides in business networks, for
instance, buyers and sellers can make more informed decisions
by detecting changes in buying patterns or pricing trends and
provide confidence and qualifying information on a potential
– yet unfamiliar – trading partner. And, when combined with
community-generated ratings and content, they can glean not
only real-time insights, but also recommended strategies for
moving their businesses forward.
So things like performance ratings where buyers rate
suppliers and suppliers rate buyers. Others in the community
can use this information to help determine who to do business
with or to help detect risk in their supply chain. By accessing
the real-time insights into invoice approval status married
with historical data on payment patterns of given buyers that
business networks provide, banks and other service providers
can remove the risks from receivables financing, allowing them
to offer more competitive rates and new services to network
members that increase revenue.
Innovative companies are already on the bandwagon,
harvesting the information inside the communities they
participate in to deliver new insights and capabilities.
For example:
l When looking for alternative sources of supply, Plaid
Enterprises, a mid-sized manufacturer of do-it-yourself
products used a business network to uncover potential
suppliers. The network not only provided a directory of
suppliers that met Plaid’s requirements, but offered up insights
into each supplier – such as how many other buyers the
supplier was doing business with on the network; how many
RFPs it had been invited to and won within the past year;
and how other buyers rated the performance of each supplier
– all drawn from structured transactions and unstructured
comments and ratings from other network members.
l Accessing real-time insights into invoice approval status
available on a business network, Mediafly, a fast-growing
mobile marketing solution provider, has not only been able to
IT
view its outstanding invoices and know when they’ll get paid,
but make offers to secure early payment. Mediafly CFO John
Evarts says such network-based ‘dynamic discounting’ has
helped him manage the business differently: “We can now get
access to capital at favourable rates when we need it, allowing
us to hire new developers so we can take on new projects and
grow the business.” Evarts says the transparency and control
afforded by the network has even helped Mediafly put off the
need to take a new round of funding.
Cases like this make clear that the so-called ‘big data’ served
up by networks will inherently change the way and speed
at which business gets done. Armed with the right tools,
companies can get the right information to the right people
in real time on any device, fuelling better business decisions
and results.
Demand for such real-time insights is at an all-time high. A
growing number of business executives are fed up with lagging
indicators and feel the lack of access to timely information
is negatively impacting their personal decisions and the
performance of their business. Case in point: 35 per cent of
the companies surveyed as part of the Aberdeen study say data
is too slow to access. Forty seven per cent indicated that they
need information within an hour of a business event, but that
they achieve this goal just 71 per cent of the time.
To fill this void, a new breed of technology has emerged.
Known as in-memory computing, it increases processing
speed by 100 per cent or greater by loading data directly into
Ariba
Ariba is the world’s business commerce network. Ariba combines
industry-leading cloud-based applications with the world’s largest
web-based trading community to help companies discover and
collaborate with a global network of partners. Using the Ariba
Network, businesses of all sizes can connect to their trading partners
anywhere, at any time from any application or device to buy, sell and
manage their cash more efficiently and effectively than ever before.
Companies around the world use the Ariba Network to simplify
inter-enterprise commerce and enhance the results that they deliver.
For further information visit:
www.ariba.com
Random Access Memory of a server. When combined with a
mobile platform, it enables companies to serve up the right
information to the right people in the right places in real time.
It’s a powerful proposition. And companies that embrace
it will be able to make the most of their big data by bringing
structure to the unstructured and gleaning insights that
enable them to deliver game-changing gains in collaboration,
productivity and insight that vault and keep them ahead of
the competition.
www.europeansupplychainmanagement.co.uk6
IT N
ews
Live home delivery tracking First retailer to try system
Leading online fashion retailer ASOS is aiming to
transform the home delivery experience by becoming the first
retailer to enable customers to track their home delivery in
real-time, thanks to a new live-mapping service and provide
customers with a 15 minute delivery slot window.
The new service, called Follow My Parcel, will allow customers
to effectively watch their delivery driver on his round as
he makes his way to their property and will countdown
the time to their delivery to give an accurate 15 minute
delivery window.
Provided in partnership with DPD, the Follow My Parcel service
will send ASOS customers a text or email message
on the day of delivery to inform them of their initial one-hour
delivery timeslot. Customers will then be invited to live-track
their delivery in real-time using the very latest GPS software
and online mapping technology via web and mobile-
friendly interfaces.
The customer will then be able to watch the progress of their
delivery driver on his round and see a real-time countdown to
their own delivery to give them an accurate 15 minute delivery
slot, so that they know exactly when to expect their parcel.
ASOS customers can, at any stage on the day of delivery,
request the parcel is delivered to a neighbour or rescheduled
for a different day by simply using their smartphone.
www.dpd.co.uk
Fashion manufacturer Just Jamie, one of the UK’s
largest suppliers of tailoring products, has agreed a deal
with fast-growing logistics provider Advanced Supply
Chain (ASC) for the provision of freight forwarding
services of its direct imported product.
As a longstanding partner of Just Jamie, ASC already
handles pre-retail work and UK distribution for the
business. The new 12 month rolling deal is the final link
in providing the business with a complete, end-to-end
supply chain.
Working with ASC more closely will allow the company
to benefit from improved service levels, greater visibility
of product and lower all round costs when compared to
other multi-provider options.
Robert Godfrey, managing director at Just Jamie, said: “It
was an easy decision to expand our existing contract with
ASC as the company has continually delivered excellent
service, proactive system improvements, and a willingness
to go the extra mile to fulfil our needs. This latest deal is
testament to the success of our relationship over the past
six years.
“We pride ourselves on supplying clients with precisely
what they need, when they need it, which means that an
efficient logistics operation is absolutely vital.”
www.justjamie.com
Newly expaNded coNtract
Just the ticket
:
Businesses of all sizes are currently facing a serious threat to their IT security and functionality as the first major software expiry event of this decade approaches. In April 2014, six of the most popular Microsoft products used in UK businesses will go ‘end-of-life’, meaning that Microsoft will no longer release or support updates for these products.Without updates, this software, as well as the systems, information and processes connected to it, will rapidly become vulnerable to outside dangers. These dangers can range from invasive malware, which can steal data and spy on activity through to highly destructive viruses like ‘worms’ and ‘Trojan horses’ that can wreak havoc in an unprotected IT infrastructure.Should businesses be concerned? Possibly. If a company has any of the below software in its IT environment, then it needs to begin planning now:l Microsoft Windows XPl Microsoft Office 2003l Microsoft Exchange 2003
l Microsoft Live Communication Server 2003l Microsoft SharePoint Portal Server 2003l Microsoft SBS 2003Robert Rutherford, managing director of QuoStar Solutions, comments: “The looming upgrade issue is one that every business needs to be aware of. This topic has typically been swept under the carpet as an unwelcome back-office expense, but time has now elevated it to the status of ‘business critical’. There are thousands of companies in the UK that are unknowingly steaming towards this iceberg and by the time the dangers have presented themselves, it will most likely be too late to prevent any damage. This is not scare-mongering, these threats are real.”
www.quostar.com
Real threat of havocBusiNesses must prepare
:
:
Simulation capabilities are now integrated with CAD solutions – and the cloud is helping to open up the
opportunities for all, says Colin Watson
clearerThecloudmakes it
As products become more complex, so do the
methods used to design them and the supply
chains that drive their development and
production. Pressures rise, competition heats up and, if
nothing is done the first casualty tends to be quality and in its
wake, safety.
But necessity forces innovation and new, more efficient
methods for tasks such as testing and analysis have emerged
from these demands. As a result, the time-consuming serial
design-prototype-test-redesign cycle is becoming a thing of
the past.
Testing methods that are integral to the design process are
emerging in its place. Rather than being a check at the end of the
design workflow when change needs to be kept to the minimum
to avoid further cost and delay, analysis can now be used to
influence the design.
Computerised simulation methods are nothing new. They
have been used for around 40 years to predict the performance
of new products and to investigate and remedy the failure of
older models. But simulation has remained an expensive, time-
consuming and complex add-on to the design process. The
analysis of even a single component could take a month or more
and was often only used after the product had already failed.
Simulation became seen as a specialist skill with a substantial
price tag. Only large manufacturers could afford to employ in-
house experts who honed their knowledge to fit particular types
of products.
Attempts to make simulation more mainstream have been
made but abandoned. Early tools could only carry out simple
linear analysis on single components and the experts dismissed
them as over-simplified.
So the specialists have continued. As product complexity
has increased, there has also been an issue with the levels of
computing power needed to perform multi-physics analyses.
The fact that it often exceeds the scopes of normal desktops and
workstations has added to mystique surrounding simulation.
Meanwhile, work has continued to find a way to enable
Colin Watson
Colin Watson is business development director, Symetri. Colin has been
involved in CAD and digital design throughout his career and has played a
key role in the growth of Symetri. He joined the company in the late 1980s,
when it was Imass, after graduating from the University of Newcastle in
computer-aided engineering and working for Intergraph UK Ltd as a training
consultant. Since then he has held the role of business development director,
overseeing the business through various acquisitions and mergers and
the launch of Symetri Consulting Services, founded in recognition of the
changing nature of digital product design and the growing need for broader
expertise and guidance.
Manufacturing
www.europeansupplychainmanagement.co.uk 7
Manufacturing
www.europeansupplychainmanagement.co.uk8
engineers to use simulation as a seamless part of their day-to-
day design work and thankfully all the factors are now in place
to do this.
The first step was the growth of digital prototyping; the
development of 3D models which not only look like the real
thing, but also act like it too with the utmost accuracy.
The next has been the integration of simulation tools
within mainstream geometry creation software. For example,
the 3D geometry that enables digital prototyping can, in
most cases, be used by the automatic meshing tools in finite
element analysis (FEA) software. Further analysis tools such as
computational fluid dynamics (CFD) have also been added.
Working with integrated CAD and simulation tools enables
associativity. When the model is changed the simulation
model and analysis are revised accordingly. This immediately
opens up the possibility of experimenting with different design
variants without going through a lengthy updating process
throughout the entire design and documentation process.
The final piece of the jigsaw is the cloud, now set to drive
the widespread use of engineering simulation more than ever
and to enable firms of any size to take advantage without a
substantial capital investment.
The first simulation in the cloud solution was launched
onto the market last year. This means that instead of relying on
the conventional server-based set-up, simulation tools can be
offered as a service, sitting on someone else’s server.
The cloud offers almost infinite computing power negating
the need for high performance hardware. This means that
complex multiple simulation tasks can be carried out in
parallel, enabling users to study a large number of design
alternatives. This analysis can run on a large number of
computers in the cloud so that in the same amount of time
that a single analysis would take on a desktop, the cloud
delivers results for all iterations providing extensive scope for
design optimisation.
Because cloud capacity is bought on a ‘pay as you go’ basis,
using it for simulation is far more affordable than previous
methods. Rather than involving high-level meetings to
justify capital expenditure, it can be switched on by the users
themselves and paid for as an operating cost. There is also no
lengthy implementation process, only the need to purchase
pre-paid ‘cloud units’, which give access to a range of multi-
physics simulation tools without requiring specific licences.
But, perhaps one of the main benefits of cloud-based
simulation is that it can be accessed remotely from anywhere
in the world. This makes it ideal for helping multi-national
teams collaborate on the development of designs and gain the
buy-in of widespread stakeholders.
While experts will always be needed for in-depth analysis
of certain products, opening up simulation to a wider market
can only be good news. It could mean fewer delays in the
supply chain caused by last minute component faults; it could
certainly help get end products faster to market. And, as it’s
affordable for every business, it could help smaller businesses
get a foothold in new markets too.
Symetri
Symetri is an Autodesk Platinum partner, operating in the oil, gas, nuclear,
transportation and manufacturing sectors, supplying 2D and 3D CAD design
software, as well as specific third-party software applications. In addition it is
an Autodesk Consulting Services partner, has achieved Autodesk Simulation
Specialisation status and was recently the first in the world to be awarded
Autodesk PLM 360 Specialisation status. Symetri Consulting Services was
launched early 2012 in recognition of the evolving nature of digital product
design, digital prototyping, data and product lifecycle management (PLM)
and its customers’ need for broader expertise and guidance.For further
information, visit:
www.symetri.co.uk
www.europeansupplychainmanagement.co.uk 9
Damage deterrent measures stepped upManufacturers and carriers of goods in the UK are being
encouraged to step up their damage deterrent measures
to drive out unnecessary costs caused by mishandling
during transit with the launch of four new additions to the
ShockWatch range. The self-adhesive indicators affix directly
to goods during transit, providing a user-friendly and cost-
effective method for detecting – and deterring – exposure to
unacceptable temperatures or impacts that can ultimately
result in defective stock.
Temperature sensitive goods can be monitored by a choice of
three new products - WarmMark2, ColdMark2 and Cold Chain
Complete - providing users with a clearly visible indication of
temperature breach, while the ShockWatch2 range of impact
indicators respond to bi-directional impact designed for a
multitude of impact sensitive equipment during shipping
and handling.
The IMC Group, which represents US-based ShockWatch in
the UK, believes the products offer a highly accessible and
low-cost solution to the issues around the handling of goods
in transit.
IMC Group managing director Ian Robinson said: “Incidents
of damage in transit, whether due to sudden impact or
exposure to unacceptably high or low temperatures, are
a real headache for operators in the logistics sector. The
ShockWatch range provides cost-effective solutions to these
issues in two important ways – deterring improper handling
by their very presence on packages and helping to confirm
culpability when damage does occur. These latest additions
to the range provide even greater scrutiny, but in a very
affordable and fast-acting format.”
www.the-imcgroup.com
Unnecessary costs
Ma
nu
fac
tur
ing n
ews
Companies looking to make improvements within the
workplace that will make a real difference to overall efficiency
and profit levels should look no further than the Lean Academy.
The Lean Academy, launched and run by Gosport-based Lean
Business Specialists Fedden USP in conjunction with MIT
Skills, aims to train individuals to become lean champions
and facilitators geared with the life-long skills, knowledge
and confidence required to make significant changes that
will benefit businesses in their on-going journey towards
continuous improvement.
Neil Fedden, principal consultant at Fedden-USP, says:
“Businesses that want to excel in today’s competitive
climate need to look at ways of improving their bottom
line performance, lead times, productivity levels, customer
service levels and workplace organisation. But perhaps more
importantly, how to sustain those improvements and continue
to make changes that benefits the organisation, its people
and its end-users/customers – this is where the Lean Academy
can help.”
www.fedden-usp.co.uk
First Lean academy
4 July launch
:
:
Large corporates are showing increasing demand for
distributor finance (DF) programmes to enable downstream
business in international supply chains, especially in emerging
markets. In parallel, global banks are confirming their growing
interest in offering DF solutions to their clients. These are
the findings of Demica’s latest qualitative research on the
distributor finance market, conducted amongst a sample
of international enterprises and selected global financial
institutions.
Many SME distributors in high growth regions are confronted
with high cost of funding, exacerbated by sellers’ pressure to
increase sales. DF programmes support the working capital
needs of a corporate seller’s distributors and gives them access
to affordable finance, enabling them to increase sales and
grow business volumes with lower capital requirements. This
in return allows sellers to expand into new or under-served
regions/segments and unlock sales potential. In most existing
DF structures surveyed, receivables are purchased by the
financier and form the main financeable asset.
Corporate respondents all exhibit rising interest in DF
products, largely due to their ambitions to expand into
emerging markets. Their primary objectives for implementing
DF solutions are: to increase sales in high growth regions
without applying more of their own working capital; to give
the offered product a competitive advantage; and to reduce
SME distributor risk. Eastern Europe, Asia and Latin America
are seen to be the focused regions for the introduction of DF
programmes.
Global banks surveyed are generally keen to offer DF solutions
as they witness an increasing desire from their corporate clients
to provide efficient financing instrument to their distributors.
While some banks promote DF as a major flagship product
or are increasing focus in this area, others regard this as a
complementary product for key clients. The majority of the
banks rely largely on sellers for due diligence of distributors and
seller risk sharing is often a prerequisite for many banks, though
some might put a heavier emphasis on supply chain linkage.
www.demica.com
interest in distribUtor Finance programmes
New research
:
www.europeansupplychainmanagement.co.uk10
Every year, companies make millions of purchases
that are too small to be handled by strategic
sourcing or too infrequently purchased to be
included in catalogue systems. It’s what we call tail spend.
Almost always, this ‘tail’ falls outside of the purview of
managed spend. But neglecting it could potentially drain tens
of millions of pounds annually from a company’s coffers - at
a time when the procurement organisation faces pressure to
add yet more to the bottom line.
Tail spend is a complex and costly challenge. In a single
company it includes tens of thousands of low-value, high-
transactional purchases across a daunting range of categories
- everything from painting a local office to purchasing
sophisticated measurement devices. These purchases are
fragmented and can involve hundreds of different suppliers.
From our experience working with dozens of companies,
Accenture has found that tail spend comprises at least ten
per cent of a company’s indirect spend. For a company
with £1 billion in indirect spend, the tail is likely to be
Stopchasingthe tail
Tail spend management - the opportunities & challenges. By Rob Woodstock
Cross categorypurchases
Low valuepurchases
Maverickspending
Multipleinvoices
Supplier priceinconsistency
Consumables
Supply Chain StrategieS
£100 million or more. Accenture has also found that the
waste in tail spend ranges from 15 per cent to 20 per cent.
Thus a company with £1 billion in indirect spend is probably
throwing anywhere from £15 million to £20 million out
the window every year by not effectively managing the tail
portion of its spend. An eye-opening example provided
below illustrates this.
A UK-based pharmaceuticals company was trying to
balance speed to market with the efficient purchase of
materials. The company discovered that its supplier of
general lab equipment was taking advantage of its lax tail
spend oversight. While conducting a rapid a request for
proposal, the company realised its supplier was charging
different prices to different company sites, for the same
equipment. The waste was more than £200,000 annually.
The recent volatile economic climate in Europe has created
more focus on cost and the need to extend control over
more of the total expenditure. Many CPOs now have tough
cost reduction targets to achieve, which requires them to
look beyond strategic sourcing programmes in high value
categories of spend. Therefore, in the UK and across Europe,
we are seeing increasing interest from consumer packaged
goods (CPG) manufacturers and pharmaceutical, telecoms,
food and drink companies in focusing on controlling
manufacturing consumables, office costs, and R&D-related
and any other low value (not necessarily low importance)
purchases to reach these targets.
Naturally, the next question for organisations is whether
to build this capability internally or to partner with a service
provider. One factor in this equation is cost - the fully
loaded cost of a procurement professional can be as much
as £100,000 per year, and companies prefer to focus these
expensive resources on large-scale purchases. The other
challenge is the broad spectrum of categories and items, in
which professionals need to develop spot buying expertise in
order to support the sporadic purchases that make up the tail
portion of spend.
For these reasons, we are seeing an emerging trend of
companies buying tail spend management services from
third parties in the UK. These providers have been able to
build a ‘tail’ expertise and are capable in achieving a scale
and efficiency in handling these purchases that most internal
procurement organisations could not efficiently replicate.
Ensuring that all one-off purchases are channelled to a
specialised tail spend management desk (often in an off- or
nearshore location), service providers are able to efficiently
apply the relevant policies, category instructions and
sourcing tactics to execute these requests at fast turnaround
times in a cost effective manner.
For example, at Accenture, instead of asking our clients to
commit to a long-term outsourcing deal, we offer a modular
approach, using key elements of the traditional outsourcing
service to provide tailored tail spend management services
over three to five years. It becomes more of a compliment to
the existing strategic purchasing rather than a replacement,
causing little disturbance in the existing ‘Procurement
Organisation.’
The pressure is still on companies to reduce costs and
boost profits – and there is no sign of that pressure letting up.
With significant resources being wasted in the tail portion
of a company’s indirect spend, management of this area
represents an opportunity for procurement officers to make
substantial savings. Tail spend has traditionally not been a
focus because of the costs versus the benefits of companies
trying to manage it themselves, but the emerging trend
of purchasing tail spend management from third-party
companies offers a significant alternative, that can achieve
the scale and expertise in the often one-off purchases that
comprise the tail. The result? Today, the suggestion that low
value spend is merely ‘administrative’ is a thing of the past.
With the right skills, policies and technologies, companies
can encourage corporate discipline, demonstrate significant
efficiencies, and allow professionals to look at and influence
the totality of their spend.
Rob Woodstock
Rob Woodstock is managing director, operations practice,
Accenture UK&I. Rob is a senior executive in Accenture’s
Management Consulting Practice in the UK & Ireland. He is a
specialist in sourcing and procurement. In over 18 years with
Accenture Rob has led supply chain transformation assignments
in the UK and internationally across broad range of industries
including public sector, financial services, airlines, aerospace,
industrial equipment and utilities.
Accenture
Accenture is a global management consulting, technology services
and outsourcing company, with approximately 261,000 people
serving clients in more than 120 countries. Combining unparalleled
experience, comprehensive capabilities across all industries and
business functions, and extensive research on the world’s most
successful companies, Accenture collaborates with clients to help
them become high-performance businesses and governments. For
further information visit:
www.accenture.com
A company with £1 billion in indirect spend is probably
throwing anywhere from £15 million to £20 million out the window every year by
not effectively managing the tail portion of its spend
The Health Store is one of the UK’s leading
wholesalers of natural and organic products to the
independent health food trade. Founded as a co-
operative in 1932, the company now operates from a 75,000 sq
ft warehouse in Nottingham, supplying retailers across the UK
mainland, Ireland, Europe and into the Far East with over 9000
products, ranging from organic seeds, nuts and pulses through
to natural body care, vitamins and supplements.
BCP (Business Computer Projects Ltd) is one of the UK’s
top suppliers of specialist supply chain software to the food and
drink wholesale industry and has been a leader in introducing
Voice directed WMS to the UK market, installing the first wall-
to-wall Voice WMS in the UK food and drink sector in 2002.
Clients include BWG, Musgrave, SPAR, ADM Londis, T Quality
and Creed Catering.
Aware that it needed to improve pick accuracy, The Health
Store had been considering investing in Voice technology for
some time, initially looking at either a middleware solution
or a full Voice WMS. As investigations progressed, however, it
became clear that the company’s incumbent wholesale solution
was no longer adequate for its needs and that the project should
be extended to include replacement of that.
BCP’s Accord emerged as being most suitable for the business
www.europeansupplychainmanagement.co.uk12
as Tim Ryan, Health Store MD, explains: “We realised that as a
fully integrated warehouse management and ERP solution we
could replace all of our systems with one integrated system from
BCP which would make running the whole business far more
straightforward.”
The decision to invest in Accord was sealed by two factors –
the introduction of a new Accord manufacturing module and
seeing the Accord solution and fully integrated Voice WMS live
in action at another BCP client. Said Tim: “Accord Voice WMS
outclassed specialist standalone warehouse offerings and it was
incredibly impressive seeing how the system operated as part
of a fully integrated Accord solution and the benefits that that
company had seen from its implementation.”
The implementationThe 60-user system encompasses the complete Accord
software suite from Purchasing through Sales Order Processing
to Financials, Manufacturing and Voice WMS and was
implemented in two main phases. The first phase was the main
Accord system where the company wanted to ensure continuous
operation, switching the old system off and Accord on in a single
day. “It was the most seamless implementation of an ERP system
I have ever seen,” says Tim. “When we switched the old system
An ERP solution and Voice WMS solution from BCP has brought multiple benefits to Health Store
Businesstransformation
Case study
off Accord came up live and we went straight into stock take.”
Once everyone was familiar with the Accord system the
company moved to the second phase of the implementation –
Voice WMS. This was done over the period of one week, starting
in the goods receiving area and then working through the
warehouse, finishing up with Picking.
The results“Accord has really transformed our business,” says Tim. “It’s
brought us into the 21st century. The key benefits are data
accuracy, visibility, scheduling and efficiency.”
Accord has improved accuracy throughout the business from
goods receiving, to stock through to picking where accuracy
is now way above 99 per cent and, said Tim: “Those errors
which do occur are usually simple human ones which are often
unavoidable.” Members (customers) have commented upon
how much more accurate orders are since the implementation
of voice, claims have dropped massively – by over 60 per cent -
and levels of trust have skyrocketed.
Visibility of data within the business is now much better.
For instance, in telesales there is now confidence in the
information in front of the operator to be able to guarantee that
stock is available and also to upsell product or to sell substitutes
or alternatives.
Accord has also transformed reporting in the business, “giving
us fantastic ability to slice and dice data to show us exactly what
we need to know about the business,” says Tim.
With the previous paper-based system people had to
manually decide which pieces of work should be done in which
order. Accord now does this, scheduling work in the most
effective order for the business. “By being able to see the exact
quantities of work in each area, we are able to move people to
the best effective use of their time,” says Tim.
One of the biggest efficiency gains has been in Picking, where:
“we are now picking more orders with fewer pickers than we
were before we implemented Accord,” explains Tim.
The Health Store has developed a very close working
relationship with BCP, who’ve shown they’re very interested
in developing the system to meet the needs of their customers.
Through special interest groups the Health Store has been able
to input into future developments of Accord, a good example
of this being the Kitting module where BCP worked very
closely with the Health Store to develop the module to meet
its exact needs.
Tim concludes: “Now that Accord is fully implemented in
our business we are delighted with the results and absolutely
convinced we made the right decision. The investment was
substantial, but it paid for itself within just nine months. It’s
improving efficiency throughout the business, both in the offices
and in the warehouse, making our business – and those of our
customers – much more competitive. Plus, it’s scalable, so we’re
already seeing other opportunities to use it to further improve
our business.”
www.europeansupplychainmanagement.co.uk 13
www.bcpsoftware.com • www.thehealthstore.co.uk
Accord has also transformed reporting in the
business, “giving us fantastic ability to slice
and dice data to show us exactly what we need to know about the business,” says Tim.
Best Practice
www.europeansupplychainmanagement.co.uk14
Whether it’s the horsemeat crisis or a collapsed
factory causing deaths in Bangladesh, if it impacts a
well-known UK business or worse UK consumers,
you can be sure it will be topping the news agenda. Consumers
vow never to shop there again and businesses involved
promise wholesale changes. A few weeks later the fanfare
dies, customers return, firms shelve their plans to change and
business as usual returns. Supply chains and the procurement
practices that control them fade into the distance. Until next
time, that is.
There is an alternative. Many companies have already woken
up to the value good supply chain management brings to
business, even in a period of austerity. They know their focus
on supply chain delivers them efficiency and effectiveness
in day-to-day business. It also gives them the assurance that
when difficulties do arise, disasters with reputational and
business implications are averted through contingency plans
and well-established processes for implementing them. The
irony is, those businesses with the most robust contingency
plans, are those most likely not to have to implement them,
Best practice in procurement & supply chains. By David Noble
changeto Adapt
as the process of identifying risk is the first step to eliminating
risk. Such an approach ought to be an aspiration for every
business and is something that can be achieved if the following
principles are adhered to.
Align procurement strategy to business strategyChina, Japan and India offer opportunities for creativity,
innovation and a fast, agile workforce to match. This is
appealing to many Western organisations, but the results can
be long, complex supply chains, open to disruption. Shorter
supply chains are on offer in Europe and the UK, but come
with expense and rigidity, which can be difficult to overcome.
The key is to ensure supply chains match business strategy.
Involving the whole organisation makes sense and getting
the support of the CEO vitally so. CIPS’ recent survey of
senior supply chain managers found that more than a third
of chief executives are disengaged with their supply chain.
Similarly, our Time to Take Stock report highlighted the lack of
prioritisation placed on supply chain management compared
to CSR issues for example and we have seen those chickens
come home to roost.
There have been some improvements, with the influence
of supply chain professionals on the increase. A recent report
from KPMG noted many executives are increasingly looking to
procurement to engage the business in strategic conversations.
The two should work in harmony, as they are inextricably
linked. Thankfully, there is growing evidence procurement
departments are growing into this role. AT Kearney, for
instance, recently found that two thirds of companies are
seeing their procurement functions reporting directly to a
C-suite executive. A trend we all should welcome.
Build relationships Though procurement and supply chain management is
predicated on finance and hard facts, best practice also requires
a thorough understanding of who your suppliers are. Many
procurement professionals will be confident they have this
understanding, but this knowledge must stretch all the way
along the supply chain beyond first and second tier suppliers
to prevent nasty surprises later on. The horsemeat saga is a case
in point, and the recent Primark child labour case is a further
demonstration of what can go wrong.
Close relationships are critical in ensuring clear sight of
supply chains. Understanding suppliers’ needs and vice versa,
how to survive now, and how to grow in the future will make
you a ‘customer of choice’ when you need your supplier the
most. It’s no longer buyers having the upper hand- it’s a two-
way street.
Minimise riskRisk does not always have a negative impact on an
organisation. Risk often comes with opportunities and a
chance to change and innovate. Risk is only a threat when
it is unexpected and out of control, which is where risk
mitigation strategies are crucial. Supply chain initiatives such
as outsourcing, low cost country sourcing and lean supply
have exposed us all to new risks but with due consideration
of the four areas of risk management – risk recognition
(identification of potential risk); risk analysis (probability of
www.europeansupplychainmanagement.co.uk 15
David Noble
David Noble was appointed chief executive of The Chartered Institute of
Purchasing & Supply on 1 June 2009. Previously he was group supply
director at IMI plc, a FTSE 250 UK multinational company specialising in
advanced engineering technology and responsible for £1billion spend.
A key achievement was pioneering Category Management and Strategic
Sourcing at Motorola in the mid 80s.
www.europeansupplychainmanagement.co.uk16
The Chartered Institute of Purchasing & Supply
The Chartered Institute of Purchasing & Supply (CIPS) is the leading
international body representing purchasing and supply management
professionals. It is the worldwide centre of excellence on purchasing
and supply management issues. CIPS has a global membership of
94,000 in 150 different countries, including senior business people,
high-ranking civil servants and leading academics. For further
information visit:
www.cips.org
risk); risk assessment (likely impact) and risk mitigation (plans
in place to reduce impact) it’s mostly covered. The recent CIPS
survey discovered that just over 40 per cent of companies do
not have a comprehensive supply chain risk mitigation strategy
in place at all; a worrying figure given the propensity of risk in
the world currently.
However, pockets of best practice do exist. Toyota, Aston
Martin and Jaguar Landrover, have collaborated to reduce risk
in their supply chains. By working together they’re developing
a tool that will map out their supply chain network that will
help them respond more quickly to disruption and prepare
for uncertainties ahead. By increasing transparency they will
troubleshoot any emerging problems before they paralyse their
supply chain.
Embrace technology Francis Bacon once said: ‘knowledge is power’. He was
right and nowhere is this more true than in procurement.
The collection and management of data is key to making
informed decisions, whether on commodity prices or the
manufacturing capacity of suppliers. This need will inevitably
increase, so access to and interpretation of that data offers a
competitive edge.
Ways of finding and retaining customers are also shifting
and social media plays a major part in this. McKinsey’s
The Challenges Ahead for Supply Chains report, identified that
a quarter of their survey respondents were expecting to invest
in IT over the next few years and only ten per cent looked
to social media to understand their customers’ needs. These
figures are likely to have reversed somewhat, but social media
offers further opportunity to track risk in supply chains, source
more knowledge and improve efficiency.
Marcell Vollmer, chief procurement officer and senior vice
president of the global procurement organisation at SAP
is an advocate of this approach. There are of course, well-
documented challenges that come with social media. Indeed
these are common to its general usage, but the benefit of real
time information direct from suppliers should not be missed
and reinforces supplier relationships.
Trained professionalsHaving skilled professionals in place with the right expertise
and experience makes all the difference. Procurement is
about more than just ‘buying’; it is understanding the full
purchasing and supply management process. As well as
having the competencies and skills to navigate the tendering
process, creating and managing contracts with suppliers,
understanding commodity pricing and the quality and value
of a product, not just cost cutting. Specialist training is also
critical, one of the reasons the MCIPS qualification is as highly
regarded as it is, offering a global standard and peace of mind.
Be sustainable and ensure supplySustainability remains critical, but it’s no longer simply the
green agenda. It’s ensuring all the goods and services needed
for an organisation to stay in business and flourish arrive on
time, to budget as efficiently as possible. If proof were needed
of the essential role sustainable procurement and supply
management practices play, then the Japanese earthquake and
subsequent tsunami must be that proof.
Many businesses suffered severe disruption and were
surprised at the depth of the chaos to their own business. Ford
for instance could not fill orders, because they were unable to
source a rare black metallic paint, showing that the smallest
chink in a supply chain can have a major knock on effect. It
also underlines the benefits of knowing your supply chain and
having the flexibility to change suppliers at short notice when
disaster strikes.
Sustainability involves a wide range of environmental,
social and economic consequences that need to be considered.
Non-renewable material use, design, manufacturing processes,
service delivery, logistics and recycling all have cost as well
as environmental implications, both negative and positive.
Managing waste in a more sustainable way for example makes
even more sense when costs of disposal are high, which more
often than not, they are. Ethical trading can offer a competitive
edge and attract ethically conscious customers, and less
wasteful energy use saves precious resources as well as reducing
costs for the business itself. This is particularly important in
a period where companies are increasingly under pressure,
sometimes by law, to report their carbon emissions and that
includes their supply chain.
Organisations can be at the forefront of their sector in
delivering on these issues and reducing costs or they can wait
until legislation forces their hand. The London Organising
Committee of the Olympic and Paralympic Games (LOCOG)
was a pioneer in this regard. LOCOG adopted a sustainable
approach to procurement and revolutionised supply
management for many games to come saving £114 million in
the process.
One thing is certain, and that is change. Your business
will undergo many unforeseeable challenges which is why
these principles are so critical and so too is the flexibility
to respond when things go wrong. Implementing these
measures and changing the status quo, will enhance the value
of procurement and will enable supply chains to respond in
extraneous circumstances, whatever they may be.
Best Practice
Holemans Group
Schmitz Cargobull
Mölnlycke Healthcare
As well as interesting features, ESCM is also your source to keep up-to-date with companies that form the backbone of the industry and the ongoing development they experience. It is also a chance to see how they are coping with the challenges within their respective marketplace and their burning ambitions to succeed, come what may.
Profiles Introduction
www.europeansupplychainmanagement.co.uk 17
18 www.europeansupplychainmanagement.co.uk
Specialists in the production and marketing
of gravel and sand, family owned Holemans Group
has developed its expertise and successful corporate
activities steadily since 1873. Today the group boasts
a turnaround of £30 million from its five wholly
owned, strategically located production units and sells
approximately 3.5 million grains of sand and gravel per
annum. Among its 130 plus employees are highly skilled
engineers, merchants, administrators, electricians and
hydraulic excavator drivers, all working to exceptional
standards to ensure the best quality products for
the group’s long-term client base. “We have a long
tradition with more than 100 years of history and a lot
of our employees have a high level of expertise in the
extraction and production of sand and gravel,” says
Michael Willnes, sales manager at Holemans GmbH.
“Our personnel can take the sand, clean it and take
sand from zero to two millimetres and extract this part
into another four parts, which means we have a high
technical standard and can always meet the needs of
our customers. We have a strong relationship with many
of our clients, most have been with us for 50-60 years so
we know exactly what they require.”
The process of producing sand and gravel is in two
parts, the first involves the extraction of the resource
from the Lower Rhine floor at depths of ten – 40 metres.
To do this the group uses extraction units such as
large suction dredgers and bucket chain excavators
HolemanS Group MAkes suRe iT
cOnsideRs THe enviROnMenT WHen
undeRTAkinG iTs sAnd And GRAveL
exTRAcTiOn AcTiviTies
productionsQuality
excavation.
Aware of the
importance of
protecting the
environment,
Holeman Group
redevelops the
areas it excavates regularly, as Michael highlights: “We
are responsible for the change in the environment from
whatever area we extract resources, which is why
we recultivate the area afterwards as part of our
daily work. It is important to us to focus on
environmental protection, which is why we won an
award in the category of biodiversity at the German
Sustainability Awards.”
As each production unit newbuild takes between
five to ten years to be authorised, constructed and
approved, the group has a strategic and long-term view
for its success in the future, as Michael concludes: “The
excavation projects we are involved in can be on the
market for up to 70 years, which means there is a lot of
planning involved. My job is to plan for the generation
after and a lot of the decisions I make related to the
projects won’t be realised in one generation; this is why
we make hard strategies and this is how we grow.”
Holemansprofile
19www.europeansupplychainmanagement.co.uk
before the raw materials are sent to Holeman Group’s
production unit. “In the production unit we clean and
separate the sand and gravel from all contaminants,
including clay and wood, with high pressure water
at five or six bar. Once this process is successfully
completed we put the sand and gravel in different
grading curves, each customer has their own grading
curve with their own combination of sand and gravel;
sometimes we sell only sand, sometimes only gravel,
other times we mix both. For example, concrete needs
40 per cent gravel and 60 per cent sand. The products
are then sent to customers in either ships or trucks,”
explains Michael.
With markets in Germany, The Netherlands, Belgium
and Luxemboug, Holemans Group produces sand and
gravel as an aggregate for the construction industry at
five strategically located production plants in Germany,
as Michael explains: “Three of our five wholly owned
production units are located around the city of Wesel,
while our main office and one of our big production
units are based in Rees. These two cities are close to
the river Rhine, one of the most important areas within
Germany for extracting sand and gravel as it is one of
the largest areas for this sort of processing. We also
have another production unit in Cologne and intend to
construct two further units in the near future.”
The construction of two new production units is due
to the steady growing group’s aim to conquer new
markets by developing a client base in Damme and
also the life cycle of its plants, as Michael highlights: “To
increase our market share and grow a presence in new
areas we are going to build a new production unit near
the city of Damme, which is currently too far from our
production units for us to get to. We have two ways of
delivering to our customers, ship and lorry; customers
who request our lorry delivery are a maximum of 100
km away from the production unit, but Damme is
nearly 250 km away from Wesel or Rees. To gain new
customers we must develop new production units, this
is our strategy.”
Although Europe has been hit by the recession,
the group is confident about the future and keen to
continue growing at a steady pace through taking well
researched investments in new plants and its technical
and quality capabilities, as Michael says: “When we first
started we had one production unit; we were a small
company but our history and tradition is all about smart
and steady growth. There have been several years
where we haven’t increased production at all, but we
believe the real growth is in developing our technical
capabilities and enhancing the quality of our products
and services to our customers.”
Optimistic about the long-term future of the
group, Michael is focusing on the process of gaining
authorisation for the development of its new
production units, which is wrought with challenges
due to the environmental issues involved in resource
Holemans GmbH www.holemans.deEmployees 130-150Industry Dredging & production of materials
20 www.europeansupplychainmanagement.co.uk
Schmitz Cargobull (Danmark) is a subsidiary
company of the German-owned Schmitz Cargobull
Group, the biggest and leading manufacturer and
supplier of semi-trailers in Europe. The Schmitz
Cargobull Group has manufacturing plants in Germany,
Spain and Lithuania and employs over 4500 people.
In the financial year 2011/2012, Schmitz Cargobull had
a turnover of approximately 1.639 billion euros and
produced more than 43,000 trailers.
Schmitz Cargobull has made a name for itself as a
leader in quality and innovation through a constant
focus on research and development activities. The
organisation has put together teams from a range of
different technical sectors to closely work together with
research institutes and testing facilities.
At present Schmitz Cargobull’s research activities
focus especially on safety, life cycle costs and weight
reduction. Here it has, for example, set new standards
with its in-house axle technology and trendsetting
construction designs. Furthermore, it is also developing
and enhancing such details as container locking
systems.
The results of its R&D efforts are constantly being
incorporated into series production. This way, every
single one of its customers profits from the company’s
innovative technology – and can exploit new potential
in the freight business.
Trailers are the cornerstones of Schmitz Cargobull’s
activities and each and every one of the company’s
trailers is manufactured in a modular system. This means
that it can meet customers’ wishes or industry-specific
demands by selecting and combining variations on
running gear, chassis and bodies. Using the diversity
that these building blocks offer, Schmitz Cargobull can
achieve maximum individuality in a quality-oriented
industrial series production.
On the new trailers side, the organisation has a wide
range of trailers, semitrailers and bodies on offer, and
there are models with all kinds of extras, depending
what their intended final use is. The range is divided
into five different areas – reefer, curtainsiders/platform
trailers, tippers, container chassis/swap chassis and
sliding floor.
The reefers and dry freight vehicles manufactured
by the company are a great example of the R&D efforts
referred to previously, as its S.KO COOL vehicles are
built using FERROPLAST panels with new NX17 foam
technology, which provides even better insulation. The
company develops FERROPLAST Insulation Panels and
they are constructed in a sandwich like fashion made
from highly refined metal coating layers enclosing a
rigid foam core. The vapour diffusion-tight panels with
their outstanding thermal properties help prevent
thermal bridging and are highly durable, repair-
friendly and especially safe. Trailer bodies made from
FERROPLAST are energy efficient, hygienic, age-resistant
and easy to repair.
In addition to the benefits of FERROPLAST, S.KO COOL
vehicles also have a unique semi chassis design. This
sees the reefer models sitting approximately 100mm
lower than competitor trailers, whilst maintaining the
same internal working height dimensions.
This reduction in overall height reduces the frontal
area of the trailer by approximately 2.4 per cent,
reducing aerodynamic drag force by the same amount.
Tests show that this can result in fuel savings of
around 1.2 per cent. In addition, the Schmitz Cargobull
semitrailer chassis and vapour diffusion proof body
KNOwN AS ‘THE TRAILER COmPANy’
SChmitz Cargobull IS THE mARKET LEADER
IN ITS FIELD
successJust more
Working in combination with the trailer side of the
business are a number of additional services, which
complete the Schmitz Cargobull offering: Cargobull
Finance for leasing and lease purchasing; Cargobull
Parts & Services for vehicle servicing and spare parts;
Cargobull Service Partners for repairs and maintenance
and Cargobull Telematics for trailer telematics.
Schmitz Cargobull already holds a market leading
position and its name is associated with leading
technology and solutions designed to help customers
be more efficient and cut cost. For the future the
company is keen to maintain its dedication and further
increase its presence in the industry. With this in
mind, it has firm ambitions to focus on the continuous
improvement of its core products and services, and
ensure customers always receive a comprehensive,
high quality service. Or as the company phrases it on its
website: ‘We offer our customers ‘just more’ – and will
continue on this successful path.’
Schmitz cargobullprofile
21www.europeansupplychainmanagement.co.uk
KH One StopKH OneStop is the partner to Schmitz Cargobull to all new trailers before delivery. KH OneStop finalizes trailers from Schmitz Cargobull with tail lifts, decorations, Thermo King Reefer units, partition walls and other options. KH OneStop has been awarded Service Partner of the year in Scandinavia by Schmitz Cargobull. KH OneStop operates in the trailer market in close cooperation with manufacturers, suppliers and customers to optimize solutions and keep trailers on the road.
benefits from the lowest possible weight.
Another benefit of Schmitz Cargobull trailers
is the option of adding its other ground-breaking
technology, such as ROTOS running gear. ROTOS is
the result of complex development work and field
tests in the axle and brake technology sector. This
running gear produced by Schmitz Cargobull reduces
the temperature and wear and tear on the brakes – a
definite plus when it comes to economy and safety.
Having such a wide variety of new vehicles on
offer makes Schmitz Cargobull a very attractive
supplier, however the company also recognises that its
customers prize flexibility and the need to react quickly
to changes in market conditions.
As a result, Schmitz Cargobull offers the facility for
them to replace their trailer with a new one and trade
it in part-exchange, or the ability to purchase a reliable
used vehicle. Used trailers are available at 22 locations
throughout Europe and those that meet strict quality
demands receive the Trailerplus mark. In addition, the
independent inspection company, DEKRA, thoroughly
checks the vehicles from top to bottom. Customers
can even check Schmitz Cargobull’s website for online
vehicle sales.
successSchmitz Cargobull www.schmitz.dkIndustry Trailers
23www.europeansupplychainmanagement.co.uk
The company has a long history, with its
foundation starting in 1849, and a new chapter of
its evolution began in 1998 when it commenced
operations as an independent company. New
developments arose in 2007 when Investor AB acquired
it, and today its 7142 employees work in 22 offices across
Europe, the Middle East and Africa; two offices in North
America; and seven offices in the Asia Pacific region.
Its plants are located in Belgium, the Czech Republic,
Finland, France, Malaysia, Poland, Thailand, the UK and
USA.
Mölnlycke HealTH care IS oNE oF ThE woRld’S lEAdINg PRovIdERS oF
SINglE-USE SURgICAl ANd woUNd CARE SolUTIoNS
To ThE PRoFESSIoNAl hEAlTh CARE SECToR
healthyA
future
Mölnlycke HealtH careprofile
Anders Klinton
Pierre Guyot
24 www.europeansupplychainmanagement.co.uk
Norafin IndustriesNorafin Industries is a producer of
technical nonwovens providing all-encompassing product solutions
to its global trading partners. The company services a diverse range of markets with its spunlaced and
needlepunched nonwovens, including medical and hygiene applications. Norafin’s medical nonwovens offer
a gentle touch, increased surface homogeneity as well as enhanced
absorbency properties. It would like to thank Molnlycke Healthcare for the
successful long-term partnership.
As Pierre Guyot, CEO explained, today Mölnlycke
Health Care is primarily focused on two areas - surgical
and wound care. He gave some more details about each
division: “The Surgical division is where we develop,
manufacture and commercialise a lot of innovative
products that are needed for the operating room
environment for surgical procedures.” These include
items such as antiseptics, clothing, face masks, scrub
suits, surgical gloves and surgical headwear.
Pierre continued: “The other division is Wound Care
and this is again designing, creating and selling products,
this time those needed to deal with different sorts of
wounds such as deep cavity wounds, infected wounds,
chronic wounds or skin tears.” Innovative products from
Mölnlycke include Safetac, a unique adhesive technology
that doesn’t stick to wounds; and BARRIER EasyWarm, an
active self-warming blanket.
Overall Mölnlycke’s wound products are designed to
provide a holistic and caring approach to the patient.
Pierre noted that the culture of the entire company in fact
revolves around helping the end users of its products:
“This is what we feel good about,” he said. “We feel that
we owe it to patients to make our products the best
quality they can be and it gives us a sense of purpose.”
Upholding this philosophy requires a very committed,
engaged workforce, and a strong track record of
innovation, and Mölnlycke has both. In addition,
Pierre noted that it benefits from a strong owner,
which has a firm vision on the long-term: “We have a
balanced footprint both in terms of operations and
manufacturing, and our main investor is a large financial
holding company in Sweden, which is well invested in
many big companies and concentrates on a long term
commitment to its portfolio. Being a private company
means we can take a long term view on the way we
grow and develop the business globally.”
This ability to plan into the future also adds value
to product development, as Pierre noted: “First and
foremost we invest a lot in research and development
– I would say we spend more on R&D than any other
expenses in the company, and innovation is a big focus
area for us. Furthermore, we are quite connected with
customers through advisory board meetings, and in
these clients explain their needs and give us feedback
about our products so we can ensure we are investing in
the right areas and meeting their clinical needs.”
He added: “Over the last few years we have also
acquired technologies, because we can’t invent
Mölnlycke HealtH careprofile
25www.europeansupplychainmanagement.co.uk
everything ourselves. In 2012 we acquired a company
in the US called Brennen Medical, which provides
complimentary products to our burns range, and we
also acquired a German company, GerroMed, which
makes electrical stimulation technology for wound
healing.” By stimulating a hard-to-heal wound with
small electrical pulses, it can create an environment
where there is new cell and skin growth. “There is a
lot more to do in this area, but we are always looking
at new technologies as we want to be known as the
world’s most innovative company in wound care and in
surgical items,” said Pierre.
Given Mölnlycke’s dedication to finding the most
suitable solution to a wound or surgical problem, it
will come as no surprise to find that the company
also takes this approach with its own business
processes, and continually strives to make efficiency
improvements. In 2011 it was awarded Class A status by
business improvement specialists Oliver Wight, after
implementing Integrated Business Planning (advanced
S&OP) and almost eliminating forecast bias as a result.
As Anders Klinton, vice president supply noted,
Mölnlycke Health Care worked closely with Oliver
Wight in redesigning its business management flows
to achieve integration across the organisation’s
complex structure. As well as improved integration,
forecast bias was reduced almost overnight, and all
financial reports are now generated from a single
system, removing the potential for divergence
of critical planning data. “We wanted to balance
the supply chain end-to-end and improve the
transparency of the supply chain so everybody
knows where they stand. With Class A status
awarded across the company, we now have a very
firm and fixed process in place, which helps us
achieve alignment and synchronisation across all
functions of the organisation,” he said.
This focus on a very efficient supply chain is also
helping Mölnlycke as it expands into new markets.
“As the supply chain of the company is growing
so it becomes more complex and more difficult to
manage,” said Anders, “so the main challenge for
supply chain if you look end-to-end is to make it cost
efficient but also flexible.”
“When you consider our tactical aspirations,
we are focusing a lot on the supply chain,” added
Pierre. “We have also worked hard on improving our
distribution footprint in Europe and that is another
SGL‘Predictability’ is a keyword for SGL when developing customised solutions in supply chain management. That approach has convinced Mölnlycke to entrust it with its overseas freight. In close co-operation with Mölnlycke, SGL has established a supply chain solution that deals with the complex challenges all the way from production in Asia, Europe and the US until the goods are securely delivered.“Our ability to attract and sustain long term relations with huge SCM customers like Mölnlycke is based on our experience in aligning our customers’ expectations creating predictability and transparency within the supply chain,” explains Allan Melgaard, COO at SGL.“We make huge efforts in understanding all stakeholders and the different cultures within a company which is the cornerstone in making an overall smooth transition,” Allan added.Scan Global Logistics (SGL), a Nordic based company, established in 1975 and now with 90 stations on six continents, handles complicated supply chain solutions, as well as sea and air freight, aid & relief operations, industrial project and charter solutions.
big focus for the year, stabilising and making our
distribution model more robust.
“We have been working with LCP Consulting since
2005, but more recently, they have supported us in the
design and implementation of a completely new cross-
business integrated supply chain and distribution set-up
in Europe - with the objective to support our growth,
further improve customer service, and to reduce cost.
We’re now reaping the benefits of the changes we have
made - a much more robust, flexible and cost efficient
supply chain.”
The expansion referred to above is also at the top of
the agenda for the company as it enters the second half
of 2013. Said Pierre: “We are now establishing a direct
presence in Turkey, Indonesia and Saudi Arabia and we
are also looking at achieving a presence in South Africa
and Brazil by the end of the year.”
Mölnlycke also has an important project underway
in China and India. “These countries need help with
specialist knowledge, and working there allows us to
recognise local needs and create a portfolio of products
that can meet them,” said Pierre.
“As I said earlier, our mindset is about long term
commitment, so we want to build sustainable
partnerships in these countries. We discussed our ideas
with the Ministry of Health in China and how can we
help, and we discovered they didn’t have the skills they
need in terms of nurses and doctors. So we have created
the Mölnlycke Health Care Wound Care Academy,
which is an education initiative to help nurses better
understand wound management and aims to train
10,000 nurses over five years.”
Mölnlycke also aims to collaborate with major
hospitals and establish wound care centres of excellence
in both China and India, which will serve as models and
references for best practices.
Throughout its evolution, Mölnlycke Health Care
has remained proud of its Swedish heritage and the
entrepreneurial spirit that has consistently fuelled its
growth. It has established a track record of growing
sales by eight to nine per cent per annum over the last
seven years, and is determined to continue on this path,
with a new US plant under construction and targeted
financial objectives established for the year.
“We are investing more in R&D than we have
done historically, and we are aggressively looking
Mölnlycke Health Care www.molnlycke.comIndustry Single-use surgical & wound care products & services
Mölnlycke HealtH careprofile
27www.europeansupplychainmanagement.co.uk
at technology from outside through acquisitions or
licensing/partnerships opportunities,” concluded Pierre.
“We recognise the world is changing very fast and
we need to respond to the challenges, so whether it’s
marketing, R&D, HR or finance, all our efforts are targeted
towards continually improving and evolving.”
We have been working with LCP Consulting since 2005, but more recently,
they have supported us in the design and implementation of a completely new cross-business integrated supply chain and distribution set-up
ESCMEUROPEAN SUPPLY CHAIN MANAGEMENT
Schofield Publishing10 Cringleford Business Centre
Intwood Road Cringleford Norwich NR4 6AU
T: +44 (0) 1603 274130F: +44 (0) 1603 274131
EditorLibbie Hammond
Sales ManagerRob Wagner
www.europeansupplychainmanagement.co.uk