Insight into discussion and findings at the Manufacturer Directors’ Forum Supply Chain Thought Leadership Dinner.
This Manufacturer Directors’ Forum event was hosted on October 16 with sponsorship from technology vendor, Oracle.
The event was introduced by a keynote from Professor Steve Evans, director of the EPSRC centre for Industrial Sustainability. Professor Evans shared insight into his involvement in the Foresight report Future of Manufacturing and suggested that the sector is on the brink of transformation.
“I enjoyed meeting the other delegates and listening to how supply chains differed but also shared many of the same essential challenges. It was a good opportunity to gauge our own thinking and test it against other players and suppliers in the UK and international markets.”
Tom Falcon, Operations Director, Shepherd Neame
He highlighted experimental ideas being investigated companies like Marks & Spencer to use 3D printing for in store manufacturing – a revolution which could alter the supply chain structure we know today beyond recognition.
Evans observed a historical lack of innovation and forward thinking in supply chain management and urged diner guests to think more creatively about the potential of leveraging social and technology trends to develop new competition models.
After this challenging introduction, guests split into four discussion groups for peer debate covering the following themes:
- Product innovation: why is it important to revenue growth?
- Sales and Operations Planning: Getting stated and securing executive buy-in
- Logistics: Is it time to insource logistics or outsource the supply chain?
- Superior order fulfilment: why is it critical now?
Within these groups some key findings and challenges emerged:
Discussion of the importance of product innovation to revenue growth, quickly turned to address the significance of composites innovation within the aerospace and defence industry.
Oliver Drury prompted the discussion of composites potential with insight into the developing business interests of Marshall Aerospace and Defence Group.
Over the years, Marshall has refined its auxiliary fuel tank business to provide nearly all end-to-end fuel tank solutions, for civil airliners – for long range and VIP conversions – and military and special mission aircraft.
“Using technology in software and hardware, already approved and developed to meet the all current civil and military airworthiness regulations, we also offer one of the fastest routes to certification,” said Drury, Marshall’s head of marketing support.
Marshall now provides full aircraft modification and system integration, which includes fuel tank structure and internal system, complete auxiliary fuel distribution systems, quantity indication system, cockpit control and monitoring. “Using regulatory approved and in-service proven dual wall aluminium technology as standard, we’re now looking into new technologies such as composites,” says Mr Drury.
BAE Systems Submarine Solutions is also developing composite parts but is coming up against some fundamental challenges in their application to some marine programmes.
“The problem with submarines is getting the vessel to sink, so lightweighting is not an engineering problem we must solve,” said head of strategy and business planning, Duncan Scott. The sub builder is still investigating casings and farings for ancillary structures made from composite materials, to improve performance and save money.
US polymer engineering firm Greene, Tweed & Co, based in Nottingham, is an R&D-heavy business investigating a range of sealing and bearing technologies to improve joins.
Its recently finished the first phase of the material allowables testing and finite analysis model development necessary to enable accurate predictive design analysis with of a new composite material it believes may be a competitive game changer. The material – Xycomp DLF, or discontinuous long fibre – is a thermoplastic composite designed for use in aerospace products.
Sales and operations planning
Companies in attendance to discuss sales and operations planning included Coca-Cola Enterprises, Brompton Bicycles, Numatic and GKN; four very different companies at various stages of S&OP implementation and management.
Robert Brown, sales development leader at Oracle commenced discussions using the Coca-Cola analogy to describe the essence of S&OP and the offerings available through Oracle.
“If you boil it down, all members of the Coca-Cola supply chain all have the same problem,” he said, “which is knowing how many cans of Coke are going to be drunk. Because if you can get that absolutely spot on early, then you can set your whole strategy around meeting that demand while keeping your inventory down as low as possible.”
However, against that model, the need for inventory to balance out demand variability was highlighted as a difficulty from all attendees. Mr Brown said Oracle tackles the issue of demand variability in two ways.
The first is to investigate the forecast elements including weather, trade promotions and similar causal factors and capture and manage as many of those elements as possible and thereby increase the forecast accuracy. The challenge then becomes managing that variability across the supply chain, bearing in mind the factors that influence cost including logistics and higher cost production.
Another consideration that Brown said can assist companies to better use S&OP practices, software and general stock control is to ensure sales pipelines are accurately depicted by measuring sales managers on the amount of inventory in stock. Members of sales are then particularly careful when it comes to the sales figures which are provided to the organisation.
Discussion made clear that the pendulum continues to swing between arguments for insourcing logistics and outsourcing supply chain management with no ‘one size fits all solution emerging.
Insight into the reasoning behind insourcing and outsourcing decision making was dominated at this table by contribution from Tom Falcon, operations director at the family-owned brewery Shepherd Neame and John Upperton, operations director and vacuum cleaner manufacturer Vax.
Their varying viewpoints and business priorities, driven by consumer demand, drew out the complexity of decision making on supply chain responsibility and control.
It became clear that economic factors, history, market momentum and future corporate strategy are all important influencers on insourcing/outsourcing decisions, but that often, personal perceptions within the management team on the degree of control desired and required will rule the outcome.
Social media was identified by all guests as an increasingly important factor in gaining visibility of customer satisfaction and, it was felt, in magnifying the brand-owner’s responsibility for the performance of supply chain and distribution partners.
Another key area of discussion in this logistics debate was sustainability and the ability of sustainability concerns to influence outsourcing decisions.
Dominic Regan, director value chain executions at Oracle was concerned that: “sustainability is in danger of becoming the RFID of today, with everyone talking about it from a marketing perspective but accommodating little real objective analysis,” of the supply chain impact..
Mr Regan pinpointed two factors in this inability to make sustainability a more influential strategic concern. “Firstly, there is an inability to put a tangible financial value on carbon such that objective decisions can be made on trading carbon for cost or service levels,” he said.
Secondly, Regan identifies an enduring inability not just to accurately measure carbon footprint throughout supply chains – a goal which is complicated by supply chain outsourcing.
It also became evident during debate that companies find it difficult to objectively compare one company’s sustainability performance against another.
Oracle is hosting another daytime debate for supply chain management leaders in manufacturing businesses on February 4, 2014.
The event will feature a keynote presentation from Cranfield School of Management’s Richard Wilding, as well as peer-to-peer industry debate sessions.
The event will be hosted at Oracle’s London offices.
For more information please contact Petra Flynn at [email protected]