From fluctuations to balance in the supply chain

The customer experienced large seasonal fluctuations in the Supply Chain and this created problems and repercussions in many other parts of the value chain. The delivery performance of the customer was being jeopardized, and there was a clear need to change existing workflows and systems and also look at the organization surrounding the Supply Chain. The imbalances were evident, but it was not clear why they occurred, and one could not point unequivocally to a central reason for the challenges. The customer had access to large amounts of data on the processes, (work)flows and actions in the Supply Chain, but it was difficult to get an overview, put the data to use and, not least, gauge the relevance and interdependence of the available data.

The challenges included

• To create accurate and durable forecasts
• To navigate a market with large seasonal fluctuations
• A demanding and ever-changing market
• A fluctuating quality in deliveries

With the existing data as a starting point, the entire area was analyzed by using SixSigma principles. Thus, it was not only the unbalanced Supply Chain area that came under scrutiny, but also for example the processes that had an impact on the performance of the external suppliers. One example is that some suppliers had poor ratings. But digging into the data, it turned out that one of the reasons for the poor ratings was that suppliers were affected by customer-driven changes in the overall design of the products for which they were to supply components. By changing its products and not informing the suppliers in due time, the company itself created unfair terms for the suppliers.

Thus, the analysis was a 'root cause analysis’, which resulted in an overall overview of the areas that influenced and create the challenges, it became clear that it was necessary to step back and create coherent planning across the areas before the detailed and more specific planning could be done in the individual areas. The overall connections and dependencies must be mapped and acknowledged to ensure the durability of the processes.

Creating an overall perspective and a common direction requires a lot from the organization. It is about collaboration across organizational units and avoiding getting stuck in internal politics. Sometimes, when political (and sometimes personal) aspects are in play, subjective considerations are taken – resulting in a lacking and deficient analysis and overview. The full value is only achieved when everyone involved takes responsibility, shows their hand and lives up to the agreed rules of the game. In this concrete case, it was revealed that some of the challenges arose because one of the internal departments often delivered with delay, which put great pressure on the rest of the chain. Making this visible has caused the company to work purposefully to improve cooperation and interaction between the departments involved.

The overview and perspectives on the challenges in the Supply Chain area have led to a number of measures to improve the Supply Chain workflow. Two key elements are: 1. a series of clearly described concrete actions in relation to the suppliers; and 2. a plan for establishing new processes for collaboration between the departments. The company has not solved the challenges yet, but the analysis, overview and concrete plans ensure that all parties involved have a clear picture of the direction and goals and are motivated to create and drive the changes needed to improve and optimize the Supply Chain processes in the company.