What it is, when it makes sense
Compared to other sectors, supply chain management in chemicals has not undergone many changes in the last 20 years, with relatively high costs for low automation (e.g. in customer service, order fulfilment, customs, logistics coordination) and long processing and leadtimes. Also inventories– the „acid test“ of every good functioning supply chain – rarely go below 60 days, a level that other industries have topped since long. The rise of competition, the increase of SKUs in sortment, the high demand volatility make it more and more important to raise the bar of expectations also in the supply chain of a chemical company. Depending upon how distant a business is from the last link along the value chain – the end consumers – the pressure from them will increase rather sooner or later.
This is why we believe that a project in „Supply chain excellence“ with execon may make sense: we help spotting where a company has to raise the bar in supply chain management, where opportunities for improvement lie, and how a detailed path towards excellence in supply chain management looks like, that is effective and sustainable.
What you get
Our typical „Supply chain excellence“ engagement delivers six items:
- Supply chain diagnostics, g. a comparison with peers from the chemical industry of key performance indicators (such as leadtimes, stock levels, logistics costs, planning costs, customer service costs, forecast accuracy, planning adherence, complaints, return logistics, etc.) as well as functional practices in supply chain management, with the identification of strengths and weak points.
- Analysis of logistics network, i.e. the assessment of the current network of storage facilities, distributors, and customers and to what extent they are calibrated to meet demand requirements efficiently and effectively (e.g., utilization, location, factor costs, leadtimes, options to expand, environmental aspects, etc)
- Map of opportunities, i.e. the list of potential improvements (e.g. different workflows, better tools, new organization, machinery upgrade & investments, etc) that would bridge the gap, incl. a description of each case (estimate of benefits / costs / implementation time / resources).
- Prioritization alternatives & planning e. the ranking of opportunities based on different criteria such as return on investment, costs, ability to implement, sustainability, risk, as well as a potential sequencing of implementation of the different realization projects, the operationalization of the activities necessary to achieve the project goals incl. breakdown in feasible workstreams and actions with responsibilities and dates.
- Progress tracking and reporting, e. the translation of goals into objectives both of financial and non-financial nature, the attribution to different teams, and the installation of weekly / monthly progress and deviation reporting.
- Ad-hoc expertise on selected projects – where necessary, i.e. the subject-matter input on strategic questions such as investments & upgrades, workflow adaptions, network realignment, organization design, and alike.
How we work
The engagement duration varies in relation to the scope, usually between 6 and 18 months. The staff is tailored to ensure the right competences are on-board, typically:
- One-four experts in chemical supply chain
- One senior project manager with experience in chemical supply chain
- One project management office (PMO) support – in some cases the role is carried out by the senior project manager.