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New Model of supply chain management

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The lavatory division of a multinational corporation, leading in design, production and distribution of bathroom products reduces by more than 80% its production downtime by adopting a new management system for its supply chain.

Initial client situation and challenges

The lavatory business unit, under a growing demand on its catalog composed by more than 40 different models, was suffering the impact of frequent production stoppages resulting from incidents in the supply of components (with more than 300 references) in the form of:

  • Loss of product sales, not adequately serving a growing demand.
  • Productivity losses, despite the theoretical saturation of its production capacity.

The existence of a culture of management focused on solving urgent issues, with no goal-achievement focus and low on interdepartmental coordination, supported by unreliable scheduling system that underused existing software management tools, was favoring the misalignment between the procurement network and actual component needs according to the schedule.

This circumstance derived in the need to redefine the supply chain management system in order to adequate procurement service levels to production needs and to minimize downtime related to lack of materials.

Solution Approach

Adoria designed and implemented a new management model for procurement and supply chain by adopting a new strategic approach on the sourcing model according to the component type, and a cultural, organizational and processes change in the management system that all together will allow:

  • Focusing the activities of the supply department around defined goals and in a     coordinated manner.
  • Leveraging the company purchasing power to achieve the necessary accuracy in the service provided by the network of suppliers.

The supply chain management model did articulate a new strategic focus on two main pillars:

  • A supply model dependent on the type of component, based on its criticality and the existing competition, from the establishment of partnerships with suppliers of those components of strategic nature that previously had only one approved supplier, to contract eview and exploration of alternative suppliers for those components of mass consumption.
  • Cultural, organizational and processes change in the management system, supported by the effective exploitation of available software tools, and oriented to the improvement of the coordination between providers, the production and wharehousing schedule, as well as the monitoring of suppliers, indicators and key processes.

 

Results

With the deployment of the new supply chain model of, the company achieved a 82% reduction in production downtime related to lack of components while enjoying additional improvements derived from it:

  • Increase of reliability in production scheduling and, therefore, in the level of global service.
  • Integration of the suppliers network in the company productive processes assuming shared responsibility.
  • Better anticipation of needs and issues, and improvements on the management capabilitiesby applying an active, coordinated and goal-oriented participation of the involved team members.