Case Studies
Case Study: A New Supply Chain Leadership Vision for a Global Metals Manufacturing Company
Overview
After a number of years of disappointing financials, this global metals manufacturing company hired a new CEO to restructure and revitalize the company. A key part of the CEO's vision included a shift from an operating model of highly independent plants into a center-led organization with virtual manufacturing networks within each region. This shift strained the existing supply chain people, operating practices and tools, resulting in excessive inventories, lower on-time-in-full (OTIF) performance and higher operating costs. Venetia Partners was hired to fix the supply chain's tactical issues, to build a global supply chain organization and to transform company-wide supply chain capabilities and operating philosophy.
Challenge
The company lacked the supply chain sophistication and insight to support its new operating model. That affected operating practices from raw material planning to S&OP and detailed scheduling to shop floor execution and customer delivery.
Primary Symptoms:
- Subpar OTIF performance and dissatisfied customers
- Lower machine utilization that undermined achieving plan
- Higher scrap rates and operating costs
- Days-Inventory-Outstanding (DIO) averaged 70 days, up from 30
- Days-Sales-Outstanding (DSO) increased unpredictable customer deliveries; growing backlog
- Days-Payables-Outstanding (DPO) increased unnecessary scrap and steel input purchases
- Increased cash required to run the business
Outcome
Venetia Partners operationalized the supply chain operating practices, people, leadership and supply chain network connections to fix, build and transform the situation on all fronts.
- Executed a structured approach at HQ and across 4 continents involving senior executives to shop floor personnel
- Used techniques and tools to fix tactical metal flow issues within supply chain, deploying highly experienced teams to deliver required results
- Leveraged world class industry info and tech insight and deployed an integrated toolset to sustain new operating practices
