SPARE PART SUPPLY CHAIN STRATEGY AT ATLAS COPCO. Stijn Vandaele

Transcription

1 SPARE PART SUPPLY CHAIN STRATEGY AT ATLAS COPCO Stijn Vandaele

2 AGENDA Facts Introduction in Brief in Atlas Copco Compressor Technique 2. Supply Chain Strategy Financial performance 2. Profitable 1. People growth Presence Innovation Service Operational excellence People Summary Future 2. Service Excellence 3. Operational Efficiency 4. Distribution Network

3 INTRO TO ATLAS COPCO 3

4 Facts in brief 4 Established Five focused business areas Global presence Employees 1873 in Stockholm, Sweden Compressor Technique Vacuum Technique Industrial Technique Mining and Rock Excavation Technique Construction Technique Customers in 180 countries Close to in 92 countries Revenue 1) BSEK 101 (BEUR 11) 1) End of December 2016, continuing operations

5 Customers everywhere 5 29% 24% 30% 29% 24% North America 9% Europe Africa/Middle East 30% Asia/Australia 8% 7% South America Figures show percent of revenues 2016.

6 SUPPORTING A WIDE VARIETY OF INDUSTRIES 6 Revenues by business area Construction Technique 11% Mining and Rock Excavation Technique 36% Compressor Technique 25% 15% 13% Industrial Technique Vacuum Technique Figures show percent of revenues (Vacuum Technique and Compressor Technique restated figures) Atlas Copco Group - New structure from January 1, 2017

7 Innovative products and service 7

8 COMPRESSOR TECHNIQUE 8

9 9 FACTS IN BRIEF Founded in 1873 in Stockholm, Sweden. Presence in 180 countries. Atlas Copco Compressor Technique The Atlas Copco Group Employees Close to Annual revenues BSEK 36.4 (BEUR 3.9) BSEK 101 (BEUR 11) % Operating margin 22.3% 19.5% Figures from the annual report EUR average rate 9.44

10 COMPRESSOR TECHNIQUE BRANDS 10

11 COMPRESSOR TECHNIQUE 11 Compressors Textile Assembly Wood & paper Food & beverages Air treatment & gas solutions Medical Electronics Chemical /petrochemical and more Compressor Technique Atlas Copco Capital Markets Day 2016

12 SERVICE 12

13 Service anytime anywhere 13 Always close Monitoring and control Proactive maintenance

14 SERVICE AS A STRATEGIC GROWTH PILLAR Before 2008 From 2008 onwards Division 1 Division 2 Division 3 Division 1 Division 2 Division 3 Service Division Service Service Service SERVICE DIVISION Marketing Sales Operations Technical Support

15 COMPRESSOR TECHNIQUE DIVISIONS 15 Atlas Copco Compressor Technique Compressor Technique Service Industrial Air Oil-free Air Gas and Process Medical Gas Solutions Airtec Professional Air

16 16 COMPRESSOR TECHNIQUE Service offering Genuine Parts Lubricants Customer Support Plans Air Optimization Monitor & Control

17 GLOBAL SERVICE SUPPORT 24 HOUR OPERATION 17 Responsive support anywhere and anytime Energy management & air optimization Superior solutions to reduce operational cost and increase up-time Committed, trained and experienced people Close, long-term customer relationships A complete lifecycle offering

18 DIAGNOSTIC CENTERS

19 CONNECTIVITY 19 MORE SERVICE LEADS ADDITIONAL REVENUE > CONNECTIONS >98% UPTIME CUSTOMER LOYALTY

20 SUPPLY CHAIN STRATEGY 21

21 SUPPLY CHAIN / LOGISTICS MISSION Process IT systems SERVICE EXCELLENCE OPERATIONAL EFFICIENCY Distribution network People & Organization

22 PEOPLE & ORGANISATION Process SERVICE EXCELLENCE IT systems OPERATIONAL EFFICIENCY Distribution network People & Organization

23 COMPETENCE MAPPING Competence Level aligned with supply chain network set-up Insufficient Execution Run general logistics operations Advanced Execution Improved logistics operations Competence Center Set new standards, innovate to reach new level of service excellence & operational efficiency Below standard Shipping of orders/stock keeping/placing purchase orders Take lead in transport tenders/improvement projects/availability increase Advisor/auditor/trainer Sales Companies Small operation supply chain units, part of sales Local DC s Consolidated with non compressor logistics Operates Locally Global Common DC s Supply chain centers Operates Globally team

24 COMPETENCE DEVELOPMENT IN SALES COMPANIES Logistics Manager is Strategic Role 1 RECRUIT NEEDS PER ROLE 2 3 DEVELOP NEEDS PER ROLE SUSTAINABLE Employer branding for logistics Recruitment and pipeline management Training packages Seminars Master classes The competence portal The way we do things in logistics

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27 SERVICE EXCELLENCE Process SERVICE EXCELLENCE IT systems OPERATIONAL EFFICIENCY Distribution network People & Organization

28 SERVICE EXCELLENCE Machine Machine Data Monitoring Service Job Allocation Daily Direct Delivery Service Contracts Optimized Travel Route Service Job Execution Service Job Reporting Urgent Breakdown Connected Navigation Overnight Delivery PARTS Voice Picking

29 Operational efficiency Total logistics cost (% revenues) TACTICAL MATRIX 4% C A Increase profitability D Increase customer satisfaction B 20% Service excellence Reliability (OTIF%) 98 %

30 ON TIME IN FULL Customer fulfillment Availability Warehouse performance Transport performance SUPPLIER / 3PL PRODUCT COMPANY DISTRIBUTION CENTER TRANSPORT COMPANY CUSTOMER Supplier / 3PL performance Availability Delivery at first DC On time in customer MEASURING ON TIME IN FULL ACROSS THE ENTIRE SUPPLY CHAIN

31 RELIABILITY On time in full Delivered date vs promised date SPEED AND RELIABILITY % Reliable information end to end from supplier to customer Improved stock management SPEED Average lead time to end customer Delivered date vs requested date Days

32 SUPPLY NETWORK For Compressor Technique Spare Parts Global / Regional DC Regional / Local DC Local DC 33

33 DISTRIBUTION CENTERS Increased picking density Less driving distances Elimination non-value activities Capacity planning Smart location management Warehouse-in-warehouse Product affinity Family grouping Advanced picking strategy Consolidation release points Change order logic Levelling of order release Fast packaging process Merge pick-pack Pre-packing of 3PL Pick-in-box Shorter Time To Customer RECEIVING PUTAWAY PICKING PACKING SHIPPING

34 OPERATIONAL EFFICIENCY Process SERVICE EXCELLENCE IT systems OPERATIONAL EFFICIENCY Distribution network People & Organization

35 Operational efficiency Total logistics cost (% revenues) TACTICAL MATRIX 4% C A Increase profitability D Increase customer satisfaction B 20% Service excellence Reliability (OTIF%) 98 %

36 TOTAL LOGISTICS COSTS Always look end to end and optimize Total Logistics costs 1 Supplier Distribution Center 2 2 Production Company 1 1 Shipping Transport Management Customer Center 1 Customer 1 Transport 2 Logistics admin. 3 Inventory 4 Scrap & obsolescence COST COMPOSITION

37 TOTAL LOGISTIC COST Total logistics cost = sum of all costs that can be controlled/influenced by the logistics departments Transport costs Inventory related costs Logistics admin costs

38 DISTRIBUTION NETWORK Process SERVICE EXCELLENCE IT systems OPERATIONAL EFFICIENCY Distribution network People & Organization

39 40 DYNAMIC ORDER ROUTING What Optimal is set as Cheapest order flow for standard orders, based on: purchase, warehouse, transport, import duties cost Fastest order flow for breakdown orders (BD), based on: stock in the network express transport, custom clearance time A Continuous Periodic (6m) exercise establishing the most optimal order flow

40 ORDER ROUTING FLOWS Order flow Goods flow Information flow Invoice flow Customer center DISPATCH Call database Intranet ASC NSC CSC 41

41 42 PROJECT ROLL OUT 17 countries in scope Airpower Service Center (Antwerp) 2 Asia Pacific Service Center (Shanghai) 1 07/2014 South Korea Indonesia 09/2014 Japan 11/2014 Australia Chile Hong Kong India Malaysia Peru Philippines Singapore Taiwan Vietnam South Africa Thailand 04/2015 Saoudi Arabia US

42 ANALYSIS & REVIEW CYCLE What : cross department and service center alignment Who : key members from respective departments. Customer contact ASC, CSC; Inventory (when required), Purchasing CSC, Shipping CSC, global team ASC, finance (in practice ICOS PTM members) Why : good way of day to day working AND status actions related to close the gap Lead : ASC global team R What : review excercise and general status Who : preparation and analysis by key members from respective departments with approval and guidance from ICOS Steerco Why : progress and impact report, priority setting Lead : ASC global team R R m+3 m+6 m+12 m+9

43 RESULTS 44

44 FUTURE? 45

45 FUTURE? 46 Expand geographical scope of dynamic order routing Automating planning aspects on global level From forecasted to planned demand From planned demand to predicted demand

46 CONCLUSION 47 People Make It Happen! Measure On Time In Full (OTIF) across the full Supply Chain Focus on Total Logistic Cost

47 THANK YOU

48 COMMITTED TO SUSTAINABLE PRODUCTIVITY.

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