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Extended SupplyChain 21


Winning chains under scrutiny


Leading supply chain professionals gathered in London last month for the Extended Supply Chain conference with a programme that included presentations fromsupply chain award winners. Rosy Hill reports.


J


CB’s generalmanager group transport & logistics, Joannes Van Osta, took to the stage at this year’s Extended Supply Chain Conference in London to explain the company’s strategy and partnership


with DHL Supply Chain which saw it win the Automotive, Aerospace and Industrial award in the 2012 European Supply Chain Excellence awards. JCB, founded by Joseph Bamford in


1945, is the largest privately owned manufacturer of construction equipment with 10,000 employees and 22 manufacturing sites around the world. It has a range of more than 300


models and its manufacturing model is based on producing a wide range of products with different options but in relatively low volumes.


Nokia Innovation is a supply chain issue


Ask anyone to describe the innovation process andwhat they come upwith will probably involve a small group of boffinsworking isolation fromthe rest of theworld.But theworld is changing, asKariKulojärvi, senior vice president, smart devices supply chain atNokia,made clear in his opening presentation at the Extended Supply Chain conference. Nokia,until recently themost


successfulmobile phonemaker on the planet,has had to restructure its business dramatically to take on the challenge of the iPhone and Android devices. And as part of that it looked hard at


the innovation process, concluding that this cannot be done in isolation – it needs the active participation of the supply chain. IncreasinglyNokia is seeking to


collaboratewith suppliers to innovate Supply Chain Standard April 2013


together.One ofKulojärvi’s goals as senior vice-president supply chain is nowto help bring innovations into Nokia products. Clearly, this raises awhole series of


newissues for supply chain professionals, starting from: “Howdo I get suppliers to innovate forme and withme?” Kulojärvi also pointed out that


innovation introduces a host of risks – including technological, supply chain and ramp-up risks. “We cannot use conventional supply


chain tools tomitigate these risks,”he said.Holding buffer stocks and having alternative sources of supply simply don’t address the issuewhen innovation comes fromone place. Othermechanisms are required,he


said,notably transparency in the relationship.“You have got to know what the supplier is doing.”


Its supply chain and sourcing profile has become


increasingly global and diverse. In addition, the sales ordering process dictated the need for a reactive, flexible manufacturing and supply chain model. “Our material management, collection and delivery of incoming goods was not fully engineered to support this business model and was put under review,” he said. In 2009 JCB identified that its business model needed reviewing. It


invited a group of potential partners to present their business to. After six to eight months of decision making, focusing on the business, legal and financial side of possible contracts, the company chose DHL, with whomit spent a detailed two months to complete


a business case before signing the deal. Van Osta said: “JCBWorldwide agreed that


DHL Supply Chain provided the best solution to


JCB needs, and understood best the uniqueness of our business. “DHL were then invited to spend two months


throughout the JCB business to construct a business case and identify the possible savings in using a lead logistics provider.” The business case included measures such as


involving all key stakeholders and all functional areas within the business, creating quality and comprehensive data sets to paint a full picture and proving their methodology worked to enable the complexity of the puzzle to take shape. The partnership fully took off in 2011 which saw


the business focus on the UK, with Van Osta explaining the key points to their joint approach: “Think big, start small, scale fast and keep it simple,” he said. He said that the key points to a successful


partnership were to understand company goals and objectives, to have a strategic vision and plan and, of course, select the right logistics partner. Van Osta also suggested that other things to look


out for were a properly structured contract with mutual continued benefit, senior executive support and involvement and careful attention to personnel issues, aswell as near termfinancial justification and use of outside expertise. General Mills, won the 2012 award for innovation


in supply chain practice. Dave Howorth, supply chain director UK, Ireland & Nordics and Dan Woodhead, logisticsmanager UK, Ireland & Nordics, explained the changes to delegates.


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