Borderless amBition, inspiration and ideas Manage or ignore supply chain risk Board game supply chain risks History: Nokia versus Ericsson Changes in chemical industry M Orchestration of SC flowers SUPPLY CHAIN MOVEMENT Kris van ransbeek No. 3 | Q4 2011 www.supplychainmovement.com Former Vp supply Chain Chiquita “Balancing speed and costs” RISKS THERE ARE MANY DIFFERENT SUPPLY CHAIN STRATEGIES... ACTUALLY THERE'S ONLY ONE. TruEconomy is specialized in Supply Chain Management consulting services ranging from Management Consulting services to solution design to Supply Chain Management implementation services and has over 90 SCM consultants, making TruEconomy the supply chain experts. With offices in the UK, Italy and its head offices in The Netherlands, TruEconomy has a strong European focus. Out of its nearshoring facilities in Greece, TruEconomy also offers development and support services. TruEconomy has profound knowledge of SAP, JDA, Oracle/JDE and other leading supply chain management solutions. Stationsstraat 2 P.O. Box 501 4000 AM Tiel The Netherlands T +31(0) 344 713000 www.trueconomy.com Customers we serve: 3M • Ahold • Airbus • AkzoNobel • Asco Numatics • ASML • Barco • Bticino • Bugaboo • Canon • Caprabo • Carrefour • Comifar • Crippa • Crocs • Cycleon • Eneco • ESA • Estee Lauder Etos • FloraHolland • Fluke • Gambro • Gazelle • GeesinkNorba • Harsco • Heineken • Hema • Hoogenbosch Retail Group • Intergamma • Joulz • Lamb Weston / Meijer • Logitech • Maxeda • Merck Serono Miss Etam • Nuon • NXP Semiconductors • Oiltanking • Oshkosh • Pearle • Philips • Plantronics • Pon • Re-Flex • Reell • Schneider Electric • Siemens • Soitec • Stegeman • Stevanato • Stolt-Nielsen • Stryker • Tata Steel Telfort • Ter Hoeven Groep • Teva • Thales • ThyssenKrupp Steel • Tornier • UPM • UPS • UTi • Vandemoortele • Van Helden • Vlisco • Vodafone • Weir Minerals • Wienerberger • Xerox • Zeeman • Zwanenberg Contents THERE ARE MANY DIFFERENT SUPPLY CHAIN STRATEGIES... Natural risk behaviour ow does your company behave in the face of risk and threats? Natu- Hral disasters in recent years have made companies increasingly aware of supply chain risks. The earthquake and the subsequent tsunami in Japan clearly exposed the risks in the supply of components, especially in the high- tech industry. A company needs to know how and where its supply chain could suffer in the event of a natural disaster, and upstream supply chain visibility is essential for providing insight into areas of vulnerability. According to a recent survey by Gart- ner analysts, supplier visibility focuses on reducing business risk and the need better for lead times. 7 | NEWS & BACKGROUND But there is a difference between supply chain status infor- mation from a company’s direct suppliers (Tier 1) and from 10 | DO OR DIE: MANAGE OR IGNORE Tier 2 and Tier 3 suppliers. Supplier engineering and quality- SUPPLY CHAIN RISK related events double the need for status information at Tier 2/ Tier 3 level compared to Tier1 suppliers. Additionally, Gartner 18 | FACTS & FIGURES SUPPLY CHAIN RISK sees government legislation and regulation increasing further upstream for the ‘secure’ supply chain, which will drive the need MANAGEMENT for additional upstream visibility and control in some industries, including medical, aerospace and defence and high-tech. 20 | SUPPLY CHAIN RISK BOARD GAME ACTUALLY THERE'S ONLY ONE. Companies that seek Tier 2/Tier 3 data do so to obtain ‘early 22 | CASE STUDY NOKIA IN 2000 warnings’ on upstream engineering and quality issues before they impact Tier 1 and brand-owner manufacturing processes. 26 | PROFILE KRIS VAN RANSBEEK Approximately 70% of the companies studied by Gartner are TruEconomy is specialized in Supply Chain Management consulting services 32 | CHEMICAL INDUSTRy’s supplY CHAIN obtaining Tier 1 visibility in terms of shipment and order status, ranging from Management Consulting services to solution design to Supply Chain Management implementation services yet only 30% of them have the same kind of visibility at Tier 2/ and has over 90 SCM consultants, making TruEconomy the supply chain experts. 35 | TOOLS & TECHNOLOGY Tier 3 level. With offices in the UK, Italy and its head offices in The Netherlands, TruEconomy has a strong European focus. 36 | CASE STUDY FLORAHOLLAND For me, the main question remains how companies react to cri- Out of its nearshoring facilities in Greece, TruEconomy also offers development and support services. tical information upstream. In the natural world, different ani- TruEconomy has profound knowledge of SAP, JDA, Oracle/JDE and other leading supply chain management solutions. mal species behave differently in the face of danger; elephants, COLOPHON and ostriches, for instance, are all highly sensitive to threats but their responses are different. In moments of imminent danger, Supply Chain Movement is a quarterly CONTRIBUTORS TO THIS ISSUE: magazine published by Supply Chain Helen Armstrong, Roberto Crippa, an elephant will charge – just like most chemical companies do SUPPLY CHAIN MOVEMENT, No. 3, CHAIN MOVEMENT, SUPPLY Media B.V. Marco van der Hoeven, Lars Leemhorst, when safety is at risk. Meanwhile, most banks apply all manner Ruben Oppenheimer, Lynn Radford, Volume 3, October 2011 Sarah Thompson, Tom van Woensel, of risk calculations to their products but, similar to ostriches, Ton Zonneveld they are not responsive enough to structurally change their busi- ISSN: 2211-6400 CONCEPT & DESIGN: ness behaviour despite the growing corporate risks of the past EDITORIAL ADDRESS Onnink Grafische Communicatie B.V. few years. And, having not taken sufficient precautions, many Supply Chain Movement P.O. Box 207, 7000 AE Doetinchem The reuse and reproduction of the arti- transport companies have been caught like a rabbit in the head- Q4 2011 The Netherlands cles and reports in this magazine is only lights as a result of rising fuel prices. permitted with an acknowledgement of EDITOR sources and the prior written consent of Martijn Lofvers (Publishing Director & the publisher. What kind of animal is your company when it comes to risk Editor-in-Chief) behaviour? An elephant, an ostrich, a rabbit or a monkey? 3 Stationsstraat 2 P.O. Box 501 4000 AM Tiel The Netherlands T +31(0) 344 713000 www.trueconomy.com T +31 (0)6 54 76 13 83 E [email protected] SALES Martijn Lofvers, Publishing Director & Editor-in-Chief Customers we serve: 3M • Ahold • Airbus • AkzoNobel • Asco Numatics • ASML • Barco • Bticino • Bugaboo • Canon • Caprabo • Carrefour • Comifar • Crippa • Crocs • Cycleon • Eneco • ESA • Estee Lauder Marjolein Lacet (Account Manager) Etos • FloraHolland • Fluke • Gambro • Gazelle • GeesinkNorba • Harsco • Heineken • Hema • Hoogenbosch Retail Group • Intergamma • Joulz • Lamb Weston / Meijer • Logitech • Maxeda • Merck Serono T +31 (0)6 54 76 13 84 Supply Chain Movement Miss Etam • Nuon • NXP Semiconductors • Oiltanking • Oshkosh • Pearle • Philips • Plantronics • Pon • Re-Flex • Reell • Schneider Electric • Siemens • Soitec • Stegeman • Stevanato • Stolt-Nielsen • Stryker • Tata Steel E [email protected] [email protected] Telfort • Ter Hoeven Groep • Teva • Thales • ThyssenKrupp Steel • Tornier • UPM • UPS • UTi • Vandemoortele • Van Helden • Vlisco • Vodafone • Weir Minerals • Wienerberger • Xerox • Zeeman • Zwanenberg ADVERTORIAL Van Leeuwen Wheeler achieves 40% stock reduction with no loss of service level Van Leeuwen Wheeler, part of the Netherlands-based Van Leeuwen Pipe and Tube Group, is the UK’s leading distributor and processor of carbon and stainless steel pipe, tube and bar products. With a head office and distribution centre in Brierley Hill in the West Midlands, a flagship sales and stockholding facility in Middlesbrough and sales offices in Sheffield, Bury, Eastleigh, Dundee and Tullow, in the Republic of Ireland, the company serves customers in a wide range of markets. Following a major investment programme, the company’s management identified the need to streamline its stockholding processes. Being able to forecast accurately has given us the ability to be dynamic Dave Jenkins Van Leeuwen Wheeler Group Commercial Dave Jenkins: “We were looking at 7 days Slim4 identified the need for a small Manager Dave Jenkins was given the task of to calculate what we would need for the increase in stock lines, seen as an inevitable reviewing stockholding practices. He says: next three or four weeks. As well as being consequence of being able to service a “As recession hit, our priority was to identify a lengthy process, it was no longer giving us broader customer base. ways of supporting our customers by operating the accuracy we needed. The risk was that Other key improvements include improved in a way that best met their needs. Many if we continued on the same basis, service identification of item seasonality and were reducing their own stocks, which meant levels might suffer and lead times become accurate pin-pointing of obsolete stock. that they looked to us for much faster order extended. It also made good commercial By analysing precisely what is ordered turnarounds to enable them to meet critical sense to upgrade our stockholding systems and where, Slim4 also identified cost deadlines. At the same time, we took the to ensure that we were operating as cost savings by changing transport patterns, realistic view that we would not be immune efficiently as possible.” essentially eliminating several road trips and from the effects of recession so it was essential Of