Customer Service Targets Were Not Being Met?
The client is a large, growing North American manufacturer of consumer products. It operates 15 plants across the United States and Canada, supplying major retailers in every region. The company has grown by acquisition and pursues a low-cost producer strategy.
As a result of rapid growth in demand for its products, the client experienced some customer service failures in the US. One customer, representing a large proportion of demand, established strict requirements with respect to supply chain management. There were questions regarding the effectiveness of inventory management and the adequacy of manufacturing capacity to meet demand, especially during peak season. The manufacturing sites managed regional inventories.
The company needed to ensure that customer service targets would be met consistently. Management recognized that substantial change might be required in a number of areas to accomplish this. It needed to identify the areas for change, set priorities, put in place a plan of action and implement the changes.
Our team assessed the client’s supply chain management approach over a period of four weeks. Our diagnostic looked at the core SCM functions of demand planning, finished goods inventory management, capacity planning, supply planning at all levels and raw materials management, with a brief look at warehousing. Our review looked at each of the levers of performance including people and organization, processes and policies, and information systems. I
We provided the company with a summary of the findings of the diagnostic. We prioritized the opportunities for improvement and separated ‘quick hits’ from changes requiring significant investments of time and capital. We proposed a plan for addressing the priorities to meet the company’s objectives and constraints. Management agreed to move forward with a combination of short-term changes and more substantial investments and we proceeded with the changes.
The initial solution consisted of improvements in demand planning, customer collaboration, FG inventory visibility, capacity planning and raw materials visibility. We developed a business case for acquiring an advanced planning system, obtained approval and implemented the system over the requisite time period. Changes in the SCM organization structure were developed and implemented in a later phase.
The client has made significant progress in managing its US supply chain. Customer service levels have been restored and plant capacity is being optimized pro-actively. The company continues to implement changes for service and cost improvement.