How to Cut Supply Chain Costs without Paying the Price

LM125Today I was at the CSCMP Europe Conference near Amsterdam. The conference is in The Netherlands for the third time out of the nine times it was held. This year’s theme is How to Cut Supply Chain Costs without Paying the Price. With the economic recession still going strong, it is a subject which is top of mind with Supply Chain professionals in the European region.

After a warm welcome by CSCMP’s President CEO Rick Blasgen opened the conference with the statement:

“Collaboration is the Cornerstone of Supply Chain Excellence.”

Visitors of the conference then listened to the Keynote Presentation by Pier Luigi Sigismondi, Chief Supply Chain Officer at Unilever on Enabling Sustainable Profitable Growth. Pier talked about some of the challenges Unilever is currently facing, such as commodity cost inflation, the eurozone crisis, and a slowdown in emerging markets. Despite these challenges, Unilever has been named no. 1 Logistics and Supply Chain of 2012.

Complaints down 12%, incidents down 75%, cash conversion cycle of -1 day, capex up, half of the factories are zero waste sites. How does Unilever do this? On shelf availability is a way of life, continuous improvement trough Lean, sustainability is at the core of the sourcing strategies, and they innovate through true collaboration with suppliers and customers. Unilever is leveraging a global scale, while remaining agile in the marketplace with true penetration and high speed.

Two quotes by Sigismondi I realy liked:

“Volatility and Uncertainty are the New Norm.”

“The total number of kilometers driven in the Unilever logistics network each day is equivalent to a round trip to the moon. Twice.”

The keynote was followed by a presentation by Darrell Zavitz, VP Business Services EMEA, at The Dow Chemical Company. Zavitz stressed the need to standardize, while staying dynamic in local markets. Bringing one single solution to many different places doesn’t work. A successful enterprise has to be nimble, customer responsive, innovation centric, and focused on production. How to get there? Clearly define the problem you are trying to solve, map the roadmap of capabilities of your supply chain and work on a solution within the constraints of the quality-cost-time continuum. Think out of the box when designing your Supply Chain and collaborate before the end product starts to move, not after!

After breakout sessions on Sustainability, Procurement Transformation, and Cost Reduction Enno Osinga, Senior VP Cargo at Amsterdam Airport Schiphol, took the stage for a presentation on Creating Opportunities During the Crisis. Key takeaway of his presentation is that companies should not stop innovating, when there is a crisis, but should start innovating. This can’t be done without collaboration between companies, government and institutions. One thing Osinga said I completely agree with:

“The logistics industry has managed to resist change like no other, but it is time to stop!”

The day ended with Discussion Forum Sessions on topics like, Sustainability, Network Design, and Sourcing Strategies, followed by a closing Panel Discussion on Executive Viewpoints on Supply Chain Costs. Hot topics in Supply Chain Today according to the panelists were:

  • Resilience (Darrel Zavitz, VP Business Services EMEA at The Dow Chemicals Company)
  • Volatile Marketplaces and new Modes like e-Commerce (Ralph Keck, Director Product Supply, GTM Innovation at Procter & Gamble)
  • Customers no longer want Products, but Integrated Solutions. Not an aircraft, but the ability to transport passengers for 40 years. (Jörg Rissiek, Vice President at EADS)
  • Control Towers and providing a 3PL solution before the customer goes to market (Piet Zoutendijk, Managing Director at Penske Logistics)

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