24 Round Table www.supplychainstandard.com This isn’t just logistics… it’s mission critical logistics

The theory is easy: the right part, the right place, the right time. But achieving that takes real expertise, as a panel of industry leaders made clear at our round table sponsored by Unipart.

complexity into supply chains. “But then, there are the new emerging markets as well, and some of those customers are probably even more demanding than some of the customers here. "Customers in general are becoming more demanding, and it's really important for us to be agile enough to be able to not just meet, but exceed these customers' needs going forward. "What we try and do at Unipart is not just look at one aspect, or function, of the supply chain, but focus on optimising the whole end-to-end supply chain – it's a real critical aspect for us.” General manager of global logistics and genuine parts at Triumph Motorcycles, Paul Checkley, agreed. He said Triumph’s approach is ultimately about satisfying the customer. "Everything we gear around is about making ourselves easy to trade with – taking the hassle out of buying and In association with n an industry where the sole aim is to get equipment owning a motorcycle for our customers,” he said. and services to the right place at the right time, every "All of the focus, particularly in aftersales, is all about aspect of a supply chain must be looked at. From the consumer and the finished vehicle, so that's looking Iinbound, to outbound, and aftermarket supply at getting the finished vehicle at the right place at the chain demands, this isn’t just logistics, this is mission right time. critical logistics. "People don't wait three/four/six months for a "A lot of people are talking about mission critical motorcycle, as they would for a new motorcar – we make logistics,” said global logistics director at Unipart a leisure product, not a mode of transport. If it’sforecast to Logistics, Bernard Molloy, when he kicked off our round be a nice March, for example, people will go to their table. "People nowadays are not only much more risk dealers and buy the bike they want then and there. If they averse, but fashions have changed substantially, can’t, they will go and buy the product elsewhere. compared to 20-30 years ago – the UK now has a very "It's very demand driven, and very much focused on the different set up when it comes to logistics.” end customer, even though we're not a retailer in the Indeed MikeVarnom, managing director of aftermarket dictionary sense of the word, everything we do is geared logistics at Unipart Logistics, has worked across various around supporting that retail transaction." industries, and seen these changes for himself. But with the advent of new technologies and the ability Varnom is now responsible for Unipart’s automotive to track and trace parts throughout the supply chain, has industry clients, but had previously headed the Checkley seen a change in the way Triumph works? company’s supply chain consultancy practice, and He believes retail leads the game there, in particularly worked with many retailers. online retail. "It has all changed and it is still all changing, he said, "But it has a strong influence on us, with people Meet the the world's changing with growth in the emerging demanding visibility. New technology is very much to the panelists markets – China, Russia, India – it's adding a lot of full, and as e-commerce becomes more important, it does

Andrew Maclagan, Andy Dovey, project Anne Bruggink, head of Atty Hussein, director of Bernard Molloy, global director of UK procurement manager service delivery and retail and operations at logistics director at procurement & interpart FPSO Topsides at BP. operations at Fortnum & Mason. Unipart Logistics. at Baxi. Electrocomponents.

April 2014 Supply Chain Standard www.supplychainstandard.com Round Table 25

become more of a pressing issue. our products are. "We have an e-commerce presence in North America, "So we were able to justify an investment in but we don't have an official one elsewhere yet, an internal RFID project, not for the track although that's something that will come, with and trace benefit, but for the retention of technology and visibility being at the forefront of that. title benefit. For example, if we can say "All of these things are pushing our industry, the this very product, which a person (the expectations of the consumer, and motorcycle merchant) has purchased on terms, consumers are quite demanding, but it's a push and hasn't been paid for yet, then from an that push is good." insurable risk point of view, it helps to On the topic on new technologies, Molloy said he raise the amount of credit.” sees track and trace as critical within the end-to-end Andrew Maclagan, director of UK supply chain. procurement & interpart at BAXI, But this depends on how well your track and trace pointed out that any investment in new works, said project procurement manager FPSO technology is a strategic decision. Topsides at BP,Andy Dovey. "Successful logistics starts with clear “You can track and trace in the warehouse – that's strategy; are you there to have operational really easy,” he said. efficiency? Are you there to have customer "The point is once it leaves the warehouse and is in intimacy? Be clear on your strategy, then you can transit to wherever it's going – do you know exactly communicate to your business what you're trying to where it is? A lot of the time we lose that ability to achieve and hopefully it will follow." actually track it. But Atty Hussein of Fortnum & Mason points out that "The equipment we send out, we now track via satellite, the ambient and perishables sectors handle logistics in a from the moment it leaves the suppliers, until it's very different way. received, so we know where every single part is in the Director of retail and operations there, Hussein said: transit route. And that has been really quite critical with "Fresh food is directly delivered into the store, and with our contractors." fresh you have all the problems of temperature control, storage, and all year round that is manageable, but when Equipment we get to Christmas time it becomes a completely Dovey explained that BP use RFID to identify what exactly different operation. is in a specific container, because it is impossible to install "Some of our suppliers will deliver to us three to four a GPS on the millions of small parts they offer. times a day, that's not a problem, but with our Irish "These small parts are normally offshore or industry suppliers, for example, we take one big hit, and then get type equipment, we could be talking something that's into a completely different conversation about dates, worth £30 million, or something that’s worth a few because you want product on your shelves that is going to hundred. So depending on the size, we would use RFID. last until Christmas Day or Boxing Day.” "For that we would identify exactly what's in the case, so Although fresh is a completely different ball game, we know every single part, quantity,all the details, and we Hussein explained Fortnum & Mason has the luxury of would track that through the system. If we ship that having five restaurants in its store, in which the abroad in a container, we install GPS on to the container, company can make use of short date stock. so we know which vessel the container has gone on. So these five restaurants in fact become "Exactly the same goes for large equipment; we'll put a customers and help the company reduce its GPS on it, and track it on satellite, so we know exactly waste margin. where it is. “The menus in our restaurants "The key issue we have is that once it goes in the hold of therefore reflect what we've got in stock a ship, you lose the GPS. So we then track the ship until it at the time,” said Hussein. arrives at the port – As long as we have the processes and “The idea of the Gallery Restaurant, the training in place, the rules that tell people what they for example, is that any ingredient have to do, we can track anything anywhere." used there you can buy within our But Will Winder, sales director & head of emerging food halls. sectors at Unipart Expert Practices, questioned how "Then when it comes to ambient exactly you would manage products that might disappear foods, we put the responsibility on the through the supply chain, such as an oil tank going supplier – it's up to them to deliver. They through a desert. deliver to our Cambridgeshire distribution "I suppose it depends on how much you want to invest centre, which is third partied out to iForce, into the subject,” said national logistics manager at and as soon as a trailer's booked in, iForce has Vaillant Group, Bob Hitchcock. 48 hours to get the product onto our shelves.” “We spent some time studying it and realised that for Time is a critical factor in a lot of operations. our market, going through a merchant route, there is no Global head of services delivery and operations at demand from the merchant for this technology, but it is Electrocomponents, Anne Bruggink, said: “Although in important for us as a company,as we want to know where a lot of occasions 48 hours is fine, sometimes you want

Paul Checkley, general Bruce Taylor, head of Bob Hitchcock, national Mike Varnom, managing Will Winder, sales manager of global operations at Nissan logistics manager at director of aftermarket director & head of logistics and genuine Motor Parts Centre BV. Vaillant Group. logistics at Unipart emerging sectors at parts at Triumph. Logistics. Unipart Expert Practices.

Supply Chain Standard April 2014 26 Round Table www.supplychainstandard.com

to push something through a quicker RFID, because they are not ready to do it. Unipart channel. But ours is very much a customer “In the past we've had internal orientated business, so as soon as Logistics replenishment, we went to 48 hours, they are, telephones will ring. but also created an eight hour "We can do things that benefit Unipart Logistics' quick-channel, in a different order our end, but if the customer services range from time, so we can short track doesn't want that, why add cost warehousing, through the doors and through in unnecessarily?" fulfilment and the system. Checkley highlighted the engineer support "Lately we've been pushing cut importance of understanding the services to reverse off times, in the UK our cut off circumstances of your customer. logistics. It manages time is now 1am, with Parcelforce In recent years Triumph has end-to-end, global still delivering next-day throughout launched in Brazil and India which supply chain solutions the country.Our customers didn't ask had offered different challenges that that include sourcing, for it, but it's something we can add for needed to be addresses. procurement, free and is helpful to them." Hussein touched on how Fortnum & technical services and Bruce Taylor, head of operations at Nissan Mason deals with the return processes business support for a Motor Parts Centre BV, said in any business you abroad. wide range of clients must focus on your customer, even when you are looking "At the moment we don't do freepost or anything like such as , at new ways to improve the company itself, the customer that for any returns, which works in our favour because Jaguar , must always be key. people will think twice about sending something back,” Sky, Waterstones and This operation supports dealer networks for Nissan she said. Homebase. It also and Renault. "If it's a quality issue, we'll pick up that cost at some provides a wide range "We're now expanding the transport leg of our business point, in terms of refund, but there aren't a lot of of security solutions and I think that's quite important – more than 50 per cent returns from the international market, unless of course including manned of our business costs are in outbound logistics. we send over a £10,000 safe and it gets there and the guarding, alarm and “For us it’s all about maintaining high levels of service. door is not working. CCTV monitoring. It's about staging everything in the supply chain and "There have been times where we've sent someone The Unipart Way, having it where it should be, so that when the dealer out, because it's quicker to send the supplier out to go efficiency with a demands it, they can get it.” and fix the safe than get it returned, plus the chances of human face, is a Taylor said that when taking on any project within a it getting back to you in one piece, without just the philosophy of working company,you must always ask yourself what is the benefit broken door, are low. underpinned by a set of it to your customer. of tools and "What we feel is the right thing to do is to balance the Relationships techniques that form cost of operation with the service provided, and you have "But the returns in the international market are nowhere part of the company’s to take both things into account, because it isn't always near those in the UK." knowledge the case that you invest heavily in your supply chain to get BAXI of course, does not have to deal with returns, but it management system. that higher level of service,” he added. still has overseas relationships in terms of manufacturing. “We continuously Bruggink agreed, pointing out that the important thing Maclagan said: "We tend to assemble our products in improve based upon was service and value for money. the UK, but what's actually manufactured here is about 15 our experience.” "We believe we should give the customer a choice – the per cent; in Western Europe, it's something like 60 per customer knows if they're in a hurry or not. But this has to cent; and then beyond that, in Eastern Europe and the Far be a relevant choice – that means both online and real East, it's around 40 per cent. time systems, excellent links with transport providers, and "When looking where to go for a supplier,it's not quality that's something we're working on, to become more as in making good products, it's the technology, it's the relevant and show people they are paying for value." skill set, you have to go with the skill set of suppliers, So to what extent is the supply chain now wherever in the world they may be." becoming part of what you need to retain a Forecasting is the key to unlocking the magic door customer? though, according to Checkley: “Everything you do with Chairman of the event, and editor logistics complements a good forecast." of Logistics Manager, Malory Davies "Forecasting is the big challenge for us, you talk about pointed out: “It's no longer just a matter seasonality and trends, and we often get sectioned in with of what a customer will pay for a the big automotive guys, but I’dargue the car industry has service, it's the fact that it's now so easy a relative stability compared to motorcycles.” for a customer to go somewhere else, On the topic of forecasting Varnom said: "You really e-commerce is at a push of a button, want to start that from the customer's perspective, get you don't even have to walk next access to actual customer demand and pull that through. door anymore.” “Unipart has developed a system to help dealers Hussein explained some of the manage their inventories, because when we deliver 80-90 measures put in place from a retail point per cent visibility, the dealers were only given 50/60 per of view: “We've introduced nominated cent to their customers, and they were doing that with days and same-day delivery services, and are twice as much inventory as they needed. now also delivering products to people's "If you can get customer demand and then flow that workplaces around London. through the supply chain, it helps the forecasting so “In the capital it's very rare to have a home delivery much." address, so we've introduced things like the electric van, Explaining the system, Molloy added: "We have created and we've now got two bicycles. a platform, a global control centre, so it starts with "Sometimes the cut off is 2pm that day,so if they choose forecasting and scheduling, it looks at what's in a nominated day, we'll deliver it early, and if a customer's production, it looks at what's in packing, and it looks just around the corner, they have this pleasure of 'wait a along the whole supply chain. minute, I've just ordered this'.” "Individuals have responsibility for forecasting and But in terms of customer satisfaction, Hitchcock said: scheduling, they have responsibility for transport, but “Wehave two customers, who represent about 75 per cent with this platform they can view where things are." of our business, and they've both invested heavily in So with visibility being critical, and having to focus on distribution, but they recognise the challenges they have what's important for the customer, you have to ask internally, so we go to meetings with them to discuss yourself; are you really delivering what the end customer things that we can improve together. wants? "It's scale,” said Hitchcock, “you can open doors "Neither of these two companies has yet invested in using logistics channels.

April 2014 Supply Chain Standard