European Supply Chain Management Issue 100

ESCMEUROPEAN SUPPLY CHAIN MANAGEMENT

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Adapt to change There are some key principles to

follow when you are creating a robust supply chain 4

The cloud makes it clearerOpening up simulation capabilities to a wider market through cloud computing

has massive potential Page 7

Business transformation A new ERP and voice WMS system has brought multiple benefits to a leading UK wholesaler Page 12

databiggerBig gets

By harvesting unstructured data,

companies can glean insights that will enable

them to keep ahead of the competition

http://www.tods.co.uk

CHAIRMAN ANDREW SCHOFIELD

GROUP MANAGING DIRECTORMIKE TULLOCH

MANAGING EDITORLIBBIE HAMMOND

STAFF WRITERSKIRSTy BIRKETT-STUBBS

MATT HIGHjO COOPER

ART EDITOR & ADvERTISING DESIGNjENNI NEWMAN

PRODUCTION MANAGERFLEUR CONWAy

PRODUCTION ADMIN [email protected]

EDITORIAL ADMINEMMA HARRIS

SALES DIRECTORDAvID GARNER

BUSINESS DEvELOPMENT MANAGERMARK CAWSTON

HEAD OF RESEARCH PHILIP MONUMENT

EDITORIAL RESEARCH MANAGERSLAURA THOMPSON

TIM EAKINS

EDITORIAL RESEARCHERS RyAN SADLER

DAWN FOORD

ADvERTISING SALES MANAGERROB WAGNER

SALES MANAGERGRAHAM ALLINSON

SALESjOE WOOLSGROvE

FINLAy jOHNSONDARREN jOLLIFFE

OFFICE MANAGERTRACy CHyNOWETH

© 2013 Schofield Publishing Limited

10 Cringleford Business CentreIntwood Road Cringleford Norwich NR4 6AU

T: +44 (0) 1603 274130F: +44 (0) 1603 274131

www.europeansupplychainmanagement.co.uk

PLEASE NOTE: The opinions expressed by contributors and advertisers within this publication do not necessarily coincide with

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Publishing, and may not be copied, stored in a retrieval system, or reproduced without the prior written permission of the publisher.

ESCM Editor

A date with dataAcross all the titles I work on, the topic of ‘big data’ is something that is recurring

time and again. It’s not surprising, considering the amount of information that

is generated by businesses on a daily basis. According to Tim Minahan in this

issue’s lead story, best-in-class companies are deriving extraordinary value from

this data by mining it for hidden insights on their customers, products, and

business activities. Of course, new technology is also springing up to handle this

amount of info and get it to the people that need it. As Tim concludes: “It’s a

powerful proposition.”

libbie hammond [email protected]

www.europeansupplychainmanagement.co.uk 1

www.europeansupplychainmanagement.co.uk2

3 Big data gets Bigger

Traditional relational or structured data may

serve as the foundation for analytic efforts.

But by combining it with unstructured

information, companies can gain additional

insights that enable them to make better

business decisions

7 the cloud makes it clearer

The cloud offers almost infinite computing

power negating the need for high

performance hardware. This means that

complex multiple simulation tasks can be

carried out in parallel, enabling users to study

a large number of design alternatives

10 stop chasing the tail

From its experience working with dozens

of companies, Accenture has found that tail

spend comprises at least ten per cent of a

company’s indirect spend. For a company with

£1 billion in indirect spend, the tail is likely to

be £100 million or more

12 Business transformation

The Health Store realised that a fully

integrated warehouse management

and ERP solution could replace all of its

systems with one integrated solution. BCP’s

Accord emerged as being most suitable for

the business

14 adapt to change

Many companies have already woken up to

the value good supply chain management

brings to business, even in a period

of austerity. They know their focus on

supply chain delivers them efficiency and

effectiveness in day-to-day business

18 Holemans

Specialists in the production and marketing

of gravel and sand, family owned Holemans

Group has developed its expertise and

successful corporate activities steadily

since 1873

20 schmitz Cargobull

Schmitz Cargobull (Danmark) is a subsidiary

company of the German-owned Schmitz

Cargobull Group, the biggest and leading

manufacturer and supplier of semi-trailers

in Europe

22 Mölnlycke Health Care

Mölnlycke Health Care is one of the world’s

leading providers of single-use surgical and

wound care solutions to the professional

health care sector, and takes a holistic and

caring approach to the patient

18

14

3

ESCM

Features ProFiles

22

Nearly 14 billion years ago, massive forces of gravity

and friction converged to spark the big bang that

gave life to the universe, as we know it. Today, the

same type of convergence is occurring in the business world.

After years of technological innovation and aggressive

IT investment, companies now sit atop a vast volume of

data on their business activities. The sea of structured data

on production, marketing, sales and pricing, HR, finance,

facilities and operations, and other internal matters is matched

by transaction-level data from supplier, customer, and

partner relationships. Best-in-class companies are deriving

Tim Minahan confirms big data is getting bigger. But so too are

the possibilities for businesses that effectively harness it

databiggerBig gets

IT



extraordinary value from this data by mining it for hidden

insights on their customers, products, and business activities.

But the convergence of major technology shifts like cloud

computing, mobility, and social and business networks has

sparked an explosion of a new class of ‘unstructured’ data -

texts, tweets, blog posts, web-based videos, and other social

postings – that now greatly exceeds traditional data types

found within most organisations. According to a study by

independent research firm Aberdeen Group, the vast majority

– more than 83 per cent – of the information companies now

have is unstructured. And companies that effectively harness

such information stand poised to gain unique insights that

give them significant advantage over their peers.

Online networks have been key enablers of the first-wave

of globalisation, making it as easy and transparent to conduct

business with a partner on the other side of the world as with

one across the street. Consumers tap into personal networks

like Facebook, Twitter and Amazon.com to learn, share and

shop better. Leading companies leverage business networks to

collaborate more efficiently with their employees, customers

and other trading partners.

But networks are about more than just connecting

companies, people and processes. Their real power lies in what

goes on inside them - all the interactions, transactions and

commentary - and the massive amounts of unstructured data

that they generate. It is from this data that the next wave of

innovation and business productivity will come. Traditional

relational or structured data may serve as the foundation

for analytic efforts. But by combining it with unstructured

information, companies can gain additional insights that

enable them to make better business decisions. And with the

right technologies, they can do it in real time.

Consider how consumers are already benefitting from the

convergence of structured and unstructured data:

l Amazon.com harvests the buying patterns (transactions)

of its customers to recommend complementary products for

up-sale. It also uses community-generated ratings and tips to

further guide buying decisions.

l Twitter and Facebook mine unstructured comments to

develop psychographic profiles of users and deliver highly

targeted advertisements (e.g., promoted Tweets) that have

much higher conversion rates than traditional advertising

approaches based on demographic segmentation alone.

Tim Minahan

Tim Minahan is senior vice president, network strategy and chief

marketing officer at Ariba, an SAP company. In his role with Ariba,

Tim is responsible for the strategy behind the Ariba Network, the

world’s largest and most global business network, and for the design

and execution of effective messaging, go-to-market programs, and

marketing initiatives to fuel its growth. He is also a widely recognised

expert on cloud, supply chain management, and business-to-business

networks and technology issues.

l The Facebook ‘Like’ button - now pervasive on websites

ranging from online stores to leading news media outlets to

political blogs - offers far more accurate (and quicker) insights

into buyer preferences and public opinion than traditional

focus groups and straw polls.

l New online and mobile banking options from startups like

Square are capitalising on the convergence of mobile, cloud,

and social to foster entirely new payment models, where a

consumer’s mobile device can, using geo-location information,

detect when its owner is in his favourite coffee shop, use the

Cloud to automatically place an order, and virtual financial

networks to settle out between the customer, the shop’s register

and the bank. If the consumer is so inclined, he can include

a tip and even post a rating or comment on his visit via

integrated social channels.

This new ‘internet of things’ is not only making our lives

more efficient, it’s unleashing a host of new data that can be

used for everything from social research to targeted marketing

to post-sale service. Leveraging the hundreds of billions of

dollars of financial transactions and transactional data along

with relationship history that resides in business networks, for

instance, buyers and sellers can make more informed decisions

by detecting changes in buying patterns or pricing trends and

provide confidence and qualifying information on a potential

– yet unfamiliar – trading partner. And, when combined with

community-generated ratings and content, they can glean not

only real-time insights, but also recommended strategies for

moving their businesses forward.

So things like performance ratings where buyers rate

suppliers and suppliers rate buyers. Others in the community

can use this information to help determine who to do business

with or to help detect risk in their supply chain. By accessing

the real-time insights into invoice approval status married

with historical data on payment patterns of given buyers that

business networks provide, banks and other service providers

can remove the risks from receivables financing, allowing them

to offer more competitive rates and new services to network

members that increase revenue.

Innovative companies are already on the bandwagon,

harvesting the information inside the communities they

participate in to deliver new insights and capabilities.

For example:

l When looking for alternative sources of supply, Plaid

Enterprises, a mid-sized manufacturer of do-it-yourself

products used a business network to uncover potential

suppliers. The network not only provided a directory of

suppliers that met Plaid’s requirements, but offered up insights

into each supplier – such as how many other buyers the

supplier was doing business with on the network; how many

RFPs it had been invited to and won within the past year;

and how other buyers rated the performance of each supplier

– all drawn from structured transactions and unstructured

comments and ratings from other network members.

l Accessing real-time insights into invoice approval status

available on a business network, Mediafly, a fast-growing

mobile marketing solution provider, has not only been able to

IT

view its outstanding invoices and know when they’ll get paid,

but make offers to secure early payment. Mediafly CFO John

Evarts says such network-based ‘dynamic discounting’ has

helped him manage the business differently: “We can now get

access to capital at favourable rates when we need it, allowing

us to hire new developers so we can take on new projects and

grow the business.” Evarts says the transparency and control

afforded by the network has even helped Mediafly put off the

need to take a new round of funding.

Cases like this make clear that the so-called ‘big data’ served

up by networks will inherently change the way and speed

at which business gets done. Armed with the right tools,

companies can get the right information to the right people

in real time on any device, fuelling better business decisions

and results.

Demand for such real-time insights is at an all-time high. A

growing number of business executives are fed up with lagging

indicators and feel the lack of access to timely information

is negatively impacting their personal decisions and the

performance of their business. Case in point: 35 per cent of

the companies surveyed as part of the Aberdeen study say data

is too slow to access. Forty seven per cent indicated that they

need information within an hour of a business event, but that

they achieve this goal just 71 per cent of the time.

To fill this void, a new breed of technology has emerged.

Known as in-memory computing, it increases processing

speed by 100 per cent or greater by loading data directly into

Ariba

Ariba is the world’s business commerce network. Ariba combines

industry-leading cloud-based applications with the world’s largest

web-based trading community to help companies discover and

collaborate with a global network of partners. Using the Ariba

Network, businesses of all sizes can connect to their trading partners

anywhere, at any time from any application or device to buy, sell and

manage their cash more efficiently and effectively than ever before.

Companies around the world use the Ariba Network to simplify

inter-enterprise commerce and enhance the results that they deliver.

For further information visit:

www.ariba.com

Random Access Memory of a server. When combined with a

mobile platform, it enables companies to serve up the right

information to the right people in the right places in real time.

It’s a powerful proposition. And companies that embrace

it will be able to make the most of their big data by bringing

structure to the unstructured and gleaning insights that

enable them to deliver game-changing gains in collaboration,

productivity and insight that vault and keep them ahead of

the competition.


IT N

ews

Live home delivery tracking First retailer to try system

Leading online fashion retailer ASOS is aiming to

transform the home delivery experience by becoming the first

retailer to enable customers to track their home delivery in

real-time, thanks to a new live-mapping service and provide

customers with a 15 minute delivery slot window.

The new service, called Follow My Parcel, will allow customers

to effectively watch their delivery driver on his round as

he makes his way to their property and will countdown

the time to their delivery to give an accurate 15 minute

delivery window.

Provided in partnership with DPD, the Follow My Parcel service

will send ASOS customers a text or email message

on the day of delivery to inform them of their initial one-hour

delivery timeslot. Customers will then be invited to live-track

their delivery in real-time using the very latest GPS software

and online mapping technology via web and mobile-

friendly interfaces.

The customer will then be able to watch the progress of their

delivery driver on his round and see a real-time countdown to

their own delivery to give them an accurate 15 minute delivery

slot, so that they know exactly when to expect their parcel.

ASOS customers can, at any stage on the day of delivery,

request the parcel is delivered to a neighbour or rescheduled

for a different day by simply using their smartphone.

www.dpd.co.uk

Fashion manufacturer Just Jamie, one of the UK’s

largest suppliers of tailoring products, has agreed a deal

with fast-growing logistics provider Advanced Supply

Chain (ASC) for the provision of freight forwarding

services of its direct imported product.

As a longstanding partner of Just Jamie, ASC already

handles pre-retail work and UK distribution for the

business. The new 12 month rolling deal is the final link

in providing the business with a complete, end-to-end

supply chain.

Working with ASC more closely will allow the company

to benefit from improved service levels, greater visibility

of product and lower all round costs when compared to

other multi-provider options.

Robert Godfrey, managing director at Just Jamie, said: “It

was an easy decision to expand our existing contract with

ASC as the company has continually delivered excellent

service, proactive system improvements, and a willingness

to go the extra mile to fulfil our needs. This latest deal is

testament to the success of our relationship over the past

six years.

“We pride ourselves on supplying clients with precisely

what they need, when they need it, which means that an

efficient logistics operation is absolutely vital.”

www.justjamie.com

Newly expaNded coNtract

Just the ticket

:

Businesses of all sizes are currently facing a serious threat to their IT security and functionality as the first major software expiry event of this decade approaches. In April 2014, six of the most popular Microsoft products used in UK businesses will go ‘end-of-life’, meaning that Microsoft will no longer release or support updates for these products.Without updates, this software, as well as the systems, information and processes connected to it, will rapidly become vulnerable to outside dangers. These dangers can range from invasive malware, which can steal data and spy on activity through to highly destructive viruses like ‘worms’ and ‘Trojan horses’ that can wreak havoc in an unprotected IT infrastructure.Should businesses be concerned? Possibly. If a company has any of the below software in its IT environment, then it needs to begin planning now:l Microsoft Windows XPl Microsoft Office 2003l Microsoft Exchange 2003

l Microsoft Live Communication Server 2003l Microsoft SharePoint Portal Server 2003l Microsoft SBS 2003Robert Rutherford, managing director of QuoStar Solutions, comments: “The looming upgrade issue is one that every business needs to be aware of. This topic has typically been swept under the carpet as an unwelcome back-office expense, but time has now elevated it to the status of ‘business critical’. There are thousands of companies in the UK that are unknowingly steaming towards this iceberg and by the time the dangers have presented themselves, it will most likely be too late to prevent any damage. This is not scare-mongering, these threats are real.”

www.quostar.com

Real threat of havocBusiNesses must prepare

:

:

Simulation capabilities are now integrated with CAD solutions – and the cloud is helping to open up the

opportunities for all, says Colin Watson

clearerThecloudmakes it

As products become more complex, so do the

methods used to design them and the supply

chains that drive their development and

production. Pressures rise, competition heats up and, if

nothing is done the first casualty tends to be quality and in its

wake, safety.

But necessity forces innovation and new, more efficient

methods for tasks such as testing and analysis have emerged

from these demands. As a result, the time-consuming serial

design-prototype-test-redesign cycle is becoming a thing of

the past.

Testing methods that are integral to the design process are

emerging in its place. Rather than being a check at the end of the

design workflow when change needs to be kept to the minimum

to avoid further cost and delay, analysis can now be used to

influence the design.

Computerised simulation methods are nothing new. They

have been used for around 40 years to predict the performance

of new products and to investigate and remedy the failure of

older models. But simulation has remained an expensive, time-

consuming and complex add-on to the design process. The

analysis of even a single component could take a month or more

and was often only used after the product had already failed.

Simulation became seen as a specialist skill with a substantial

price tag. Only large manufacturers could afford to employ in-

house experts who honed their knowledge to fit particular types

of products.

Attempts to make simulation more mainstream have been

made but abandoned. Early tools could only carry out simple

linear analysis on single components and the experts dismissed

them as over-simplified.

So the specialists have continued. As product complexity

has increased, there has also been an issue with the levels of

computing power needed to perform multi-physics analyses.

The fact that it often exceeds the scopes of normal desktops and

workstations has added to mystique surrounding simulation.

Meanwhile, work has continued to find a way to enable

Colin Watson

Colin Watson is business development director, Symetri. Colin has been

involved in CAD and digital design throughout his career and has played a

key role in the growth of Symetri. He joined the company in the late 1980s,

when it was Imass, after graduating from the University of Newcastle in

computer-aided engineering and working for Intergraph UK Ltd as a training

consultant. Since then he has held the role of business development director,

overseeing the business through various acquisitions and mergers and

the launch of Symetri Consulting Services, founded in recognition of the

changing nature of digital product design and the growing need for broader

expertise and guidance.

Manufacturing


Manufacturing


engineers to use simulation as a seamless part of their day-to-

day design work and thankfully all the factors are now in place

to do this.

The first step was the growth of digital prototyping; the

development of 3D models which not only look like the real

thing, but also act like it too with the utmost accuracy.

The next has been the integration of simulation tools

within mainstream geometry creation software. For example,

the 3D geometry that enables digital prototyping can, in

most cases, be used by the automatic meshing tools in finite

element analysis (FEA) software. Further analysis tools such as

computational fluid dynamics (CFD) have also been added.

Working with integrated CAD and simulation tools enables

associativity. When the model is changed the simulation

model and analysis are revised accordingly. This immediately

opens up the possibility of experimenting with different design

variants without going through a lengthy updating process

throughout the entire design and documentation process.

The final piece of the jigsaw is the cloud, now set to drive

the widespread use of engineering simulation more than ever

and to enable firms of any size to take advantage without a

substantial capital investment.

The first simulation in the cloud solution was launched

onto the market last year. This means that instead of relying on

the conventional server-based set-up, simulation tools can be

offered as a service, sitting on someone else’s server.

The cloud offers almost infinite computing power negating

the need for high performance hardware. This means that

complex multiple simulation tasks can be carried out in

parallel, enabling users to study a large number of design

alternatives. This analysis can run on a large number of

computers in the cloud so that in the same amount of time

that a single analysis would take on a desktop, the cloud

delivers results for all iterations providing extensive scope for

design optimisation.

Because cloud capacity is bought on a ‘pay as you go’ basis,

using it for simulation is far more affordable than previous

methods. Rather than involving high-level meetings to

justify capital expenditure, it can be switched on by the users

themselves and paid for as an operating cost. There is also no

lengthy implementation process, only the need to purchase

pre-paid ‘cloud units’, which give access to a range of multi-

physics simulation tools without requiring specific licences.

But, perhaps one of the main benefits of cloud-based

simulation is that it can be accessed remotely from anywhere

in the world. This makes it ideal for helping multi-national

teams collaborate on the development of designs and gain the

buy-in of widespread stakeholders.

While experts will always be needed for in-depth analysis

of certain products, opening up simulation to a wider market

can only be good news. It could mean fewer delays in the

supply chain caused by last minute component faults; it could

certainly help get end products faster to market. And, as it’s

affordable for every business, it could help smaller businesses

get a foothold in new markets too.

Symetri

Symetri is an Autodesk Platinum partner, operating in the oil, gas, nuclear,

transportation and manufacturing sectors, supplying 2D and 3D CAD design

software, as well as specific third-party software applications. In addition it is

an Autodesk Consulting Services partner, has achieved Autodesk Simulation

Specialisation status and was recently the first in the world to be awarded

Autodesk PLM 360 Specialisation status. Symetri Consulting Services was

launched early 2012 in recognition of the evolving nature of digital product

design, digital prototyping, data and product lifecycle management (PLM)

and its customers’ need for broader expertise and guidance.For further

information, visit:

www.symetri.co.uk


Damage deterrent measures stepped upManufacturers and carriers of goods in the UK are being

encouraged to step up their damage deterrent measures

to drive out unnecessary costs caused by mishandling

during transit with the launch of four new additions to the

ShockWatch range. The self-adhesive indicators affix directly

to goods during transit, providing a user-friendly and cost-

effective method for detecting – and deterring – exposure to

unacceptable temperatures or impacts that can ultimately

result in defective stock.

Temperature sensitive goods can be monitored by a choice of

three new products - WarmMark2, ColdMark2 and Cold Chain

Complete - providing users with a clearly visible indication of

temperature breach, while the ShockWatch2 range of impact

indicators respond to bi-directional impact designed for a

multitude of impact sensitive equipment during shipping

and handling.

The IMC Group, which represents US-based ShockWatch in

the UK, believes the products offer a highly accessible and

low-cost solution to the issues around the handling of goods

in transit.

IMC Group managing director Ian Robinson said: “Incidents

of damage in transit, whether due to sudden impact or

exposure to unacceptably high or low temperatures, are

a real headache for operators in the logistics sector. The

ShockWatch range provides cost-effective solutions to these

issues in two important ways – deterring improper handling

by their very presence on packages and helping to confirm

culpability when damage does occur. These latest additions

to the range provide even greater scrutiny, but in a very

affordable and fast-acting format.”

www.the-imcgroup.com

Unnecessary costs

Ma

nu

fac

tur

ing n

ews

Companies looking to make improvements within the

workplace that will make a real difference to overall efficiency

and profit levels should look no further than the Lean Academy.

The Lean Academy, launched and run by Gosport-based Lean

Business Specialists Fedden USP in conjunction with MIT

Skills, aims to train individuals to become lean champions

and facilitators geared with the life-long skills, knowledge

and confidence required to make significant changes that

will benefit businesses in their on-going journey towards

continuous improvement.

Neil Fedden, principal consultant at Fedden-USP, says:

“Businesses that want to excel in today’s competitive

climate need to look at ways of improving their bottom

line performance, lead times, productivity levels, customer

service levels and workplace organisation. But perhaps more

importantly, how to sustain those improvements and continue

to make changes that benefits the organisation, its people

and its end-users/customers – this is where the Lean Academy

can help.”

www.fedden-usp.co.uk

First Lean academy

4 July launch

:

:

Large corporates are showing increasing demand for

distributor finance (DF) programmes to enable downstream

business in international supply chains, especially in emerging

markets. In parallel, global banks are confirming their growing

interest in offering DF solutions to their clients. These are

the findings of Demica’s latest qualitative research on the

distributor finance market, conducted amongst a sample

of international enterprises and selected global financial

institutions.

Many SME distributors in high growth regions are confronted

with high cost of funding, exacerbated by sellers’ pressure to

increase sales. DF programmes support the working capital

needs of a corporate seller’s distributors and gives them access

to affordable finance, enabling them to increase sales and

grow business volumes with lower capital requirements. This

in return allows sellers to expand into new or under-served

regions/segments and unlock sales potential. In most existing

DF structures surveyed, receivables are purchased by the

financier and form the main financeable asset.

Corporate respondents all exhibit rising interest in DF

products, largely due to their ambitions to expand into

emerging markets. Their primary objectives for implementing

DF solutions are: to increase sales in high growth regions

without applying more of their own working capital; to give

the offered product a competitive advantage; and to reduce

SME distributor risk. Eastern Europe, Asia and Latin America

are seen to be the focused regions for the introduction of DF

programmes.

Global banks surveyed are generally keen to offer DF solutions

as they witness an increasing desire from their corporate clients

to provide efficient financing instrument to their distributors.

While some banks promote DF as a major flagship product

or are increasing focus in this area, others regard this as a

complementary product for key clients. The majority of the

banks rely largely on sellers for due diligence of distributors and

seller risk sharing is often a prerequisite for many banks, though

some might put a heavier emphasis on supply chain linkage.

www.demica.com

interest in distribUtor Finance programmes

New research

:


Every year, companies make millions of purchases

that are too small to be handled by strategic

sourcing or too infrequently purchased to be

included in catalogue systems. It’s what we call tail spend.

Almost always, this ‘tail’ falls outside of the purview of

managed spend. But neglecting it could potentially drain tens

of millions of pounds annually from a company’s coffers - at

a time when the procurement organisation faces pressure to

add yet more to the bottom line.

Tail spend is a complex and costly challenge. In a single

company it includes tens of thousands of low-value, high-

transactional purchases across a daunting range of categories

- everything from painting a local office to purchasing

sophisticated measurement devices. These purchases are

fragmented and can involve hundreds of different suppliers.

From our experience working with dozens of companies,

Accenture has found that tail spend comprises at least ten

per cent of a company’s indirect spend. For a company

with £1 billion in indirect spend, the tail is likely to be

Stopchasingthe tail

Tail spend management - the opportunities & challenges. By Rob Woodstock

Cross categorypurchases

Low valuepurchases

Maverickspending

Multipleinvoices

Supplier priceinconsistency

Consumables

Supply Chain StrategieS

£100 million or more. Accenture has also found that the

waste in tail spend ranges from 15 per cent to 20 per cent.

Thus a company with £1 billion in indirect spend is probably

throwing anywhere from £15 million to £20 million out

the window every year by not effectively managing the tail

portion of its spend. An eye-opening example provided

below illustrates this.

A UK-based pharmaceuticals company was trying to

balance speed to market with the efficient purchase of

materials. The company discovered that its supplier of

general lab equipment was taking advantage of its lax tail

spend oversight. While conducting a rapid a request for

proposal, the company realised its supplier was charging

different prices to different company sites, for the same

equipment. The waste was more than £200,000 annually.

The recent volatile economic climate in Europe has created

more focus on cost and the need to extend control over

more of the total expenditure. Many CPOs now have tough

cost reduction targets to achieve, which requires them to

look beyond strategic sourcing programmes in high value

categories of spend. Therefore, in the UK and across Europe,

we are seeing increasing interest from consumer packaged

goods (CPG) manufacturers and pharmaceutical, telecoms,

food and drink companies in focusing on controlling

manufacturing consumables, office costs, and R&D-related

and any other low value (not necessarily low importance)

purchases to reach these targets.

Naturally, the next question for organisations is whether

to build this capability internally or to partner with a service

provider. One factor in this equation is cost - the fully

loaded cost of a procurement professional can be as much

as £100,000 per year, and companies prefer to focus these

expensive resources on large-scale purchases. The other

challenge is the broad spectrum of categories and items, in

which professionals need to develop spot buying expertise in

order to support the sporadic purchases that make up the tail

portion of spend.

For these reasons, we are seeing an emerging trend of

companies buying tail spend management services from

third parties in the UK. These providers have been able to

build a ‘tail’ expertise and are capable in achieving a scale

and efficiency in handling these purchases that most internal

procurement organisations could not efficiently replicate.

Ensuring that all one-off purchases are channelled to a

specialised tail spend management desk (often in an off- or

nearshore location), service providers are able to efficiently

apply the relevant policies, category instructions and

sourcing tactics to execute these requests at fast turnaround

times in a cost effective manner.

For example, at Accenture, instead of asking our clients to

commit to a long-term outsourcing deal, we offer a modular

approach, using key elements of the traditional outsourcing

service to provide tailored tail spend management services

over three to five years. It becomes more of a compliment to

the existing strategic purchasing rather than a replacement,

causing little disturbance in the existing ‘Procurement

Organisation.’

The pressure is still on companies to reduce costs and

boost profits – and there is no sign of that pressure letting up.

With significant resources being wasted in the tail portion

of a company’s indirect spend, management of this area

represents an opportunity for procurement officers to make

substantial savings. Tail spend has traditionally not been a

focus because of the costs versus the benefits of companies

trying to manage it themselves, but the emerging trend

of purchasing tail spend management from third-party

companies offers a significant alternative, that can achieve

the scale and expertise in the often one-off purchases that

comprise the tail. The result? Today, the suggestion that low

value spend is merely ‘administrative’ is a thing of the past.

With the right skills, policies and technologies, companies

can encourage corporate discipline, demonstrate significant

efficiencies, and allow professionals to look at and influence

the totality of their spend.

Rob Woodstock

Rob Woodstock is managing director, operations practice,

Accenture UK&I. Rob is a senior executive in Accenture’s

Management Consulting Practice in the UK & Ireland. He is a

specialist in sourcing and procurement. In over 18 years with

Accenture Rob has led supply chain transformation assignments

in the UK and internationally across broad range of industries

including public sector, financial services, airlines, aerospace,

industrial equipment and utilities.

Accenture

Accenture is a global management consulting, technology services

and outsourcing company, with approximately 261,000 people

serving clients in more than 120 countries. Combining unparalleled

experience, comprehensive capabilities across all industries and

business functions, and extensive research on the world’s most

successful companies, Accenture collaborates with clients to help

them become high-performance businesses and governments. For

further information visit:

www.accenture.com

A company with £1 billion in indirect spend is probably

throwing anywhere from £15 million to £20 million out the window every year by

not effectively managing the tail portion of its spend

The Health Store is one of the UK’s leading

wholesalers of natural and organic products to the

independent health food trade. Founded as a co-

operative in 1932, the company now operates from a 75,000 sq

ft warehouse in Nottingham, supplying retailers across the UK

mainland, Ireland, Europe and into the Far East with over 9000

products, ranging from organic seeds, nuts and pulses through

to natural body care, vitamins and supplements.

BCP (Business Computer Projects Ltd) is one of the UK’s

top suppliers of specialist supply chain software to the food and

drink wholesale industry and has been a leader in introducing

Voice directed WMS to the UK market, installing the first wall-

to-wall Voice WMS in the UK food and drink sector in 2002.

Clients include BWG, Musgrave, SPAR, ADM Londis, T Quality

and Creed Catering.

Aware that it needed to improve pick accuracy, The Health

Store had been considering investing in Voice technology for

some time, initially looking at either a middleware solution

or a full Voice WMS. As investigations progressed, however, it

became clear that the company’s incumbent wholesale solution

was no longer adequate for its needs and that the project should

be extended to include replacement of that.

BCP’s Accord emerged as being most suitable for the business


as Tim Ryan, Health Store MD, explains: “We realised that as a

fully integrated warehouse management and ERP solution we

could replace all of our systems with one integrated system from

BCP which would make running the whole business far more

straightforward.”

The decision to invest in Accord was sealed by two factors –

the introduction of a new Accord manufacturing module and

seeing the Accord solution and fully integrated Voice WMS live

in action at another BCP client. Said Tim: “Accord Voice WMS

outclassed specialist standalone warehouse offerings and it was

incredibly impressive seeing how the system operated as part

of a fully integrated Accord solution and the benefits that that

company had seen from its implementation.”

The implementationThe 60-user system encompasses the complete Accord

software suite from Purchasing through Sales Order Processing

to Financials, Manufacturing and Voice WMS and was

implemented in two main phases. The first phase was the main

Accord system where the company wanted to ensure continuous

operation, switching the old system off and Accord on in a single

day. “It was the most seamless implementation of an ERP system

I have ever seen,” says Tim. “When we switched the old system

An ERP solution and Voice WMS solution from BCP has brought multiple benefits to Health Store

Businesstransformation

Case study

off Accord came up live and we went straight into stock take.”

Once everyone was familiar with the Accord system the

company moved to the second phase of the implementation –

Voice WMS. This was done over the period of one week, starting

in the goods receiving area and then working through the

warehouse, finishing up with Picking.

The results“Accord has really transformed our business,” says Tim. “It’s

brought us into the 21st century. The key benefits are data

accuracy, visibility, scheduling and efficiency.”

Accord has improved accuracy throughout the business from

goods receiving, to stock through to picking where accuracy

is now way above 99 per cent and, said Tim: “Those errors

which do occur are usually simple human ones which are often

unavoidable.” Members (customers) have commented upon

how much more accurate orders are since the implementation

of voice, claims have dropped massively – by over 60 per cent -

and levels of trust have skyrocketed.

Visibility of data within the business is now much better.

For instance, in telesales there is now confidence in the

information in front of the operator to be able to guarantee that

stock is available and also to upsell product or to sell substitutes

or alternatives.

Accord has also transformed reporting in the business, “giving

us fantastic ability to slice and dice data to show us exactly what

we need to know about the business,” says Tim.

With the previous paper-based system people had to

manually decide which pieces of work should be done in which

order. Accord now does this, scheduling work in the most

effective order for the business. “By being able to see the exact

quantities of work in each area, we are able to move people to

the best effective use of their time,” says Tim.

One of the biggest efficiency gains has been in Picking, where:

“we are now picking more orders with fewer pickers than we

were before we implemented Accord,” explains Tim.

The Health Store has developed a very close working

relationship with BCP, who’ve shown they’re very interested

in developing the system to meet the needs of their customers.

Through special interest groups the Health Store has been able

to input into future developments of Accord, a good example

of this being the Kitting module where BCP worked very

closely with the Health Store to develop the module to meet

its exact needs.

Tim concludes: “Now that Accord is fully implemented in

our business we are delighted with the results and absolutely

convinced we made the right decision. The investment was

substantial, but it paid for itself within just nine months. It’s

improving efficiency throughout the business, both in the offices

and in the warehouse, making our business – and those of our

customers – much more competitive. Plus, it’s scalable, so we’re

already seeing other opportunities to use it to further improve

our business.”


www.bcpsoftware.com • www.thehealthstore.co.uk

Accord has also transformed reporting in the

business, “giving us fantastic ability to slice

and dice data to show us exactly what we need to know about the business,” says Tim.

Best Practice


Whether it’s the horsemeat crisis or a collapsed

factory causing deaths in Bangladesh, if it impacts a

well-known UK business or worse UK consumers,

you can be sure it will be topping the news agenda. Consumers

vow never to shop there again and businesses involved

promise wholesale changes. A few weeks later the fanfare

dies, customers return, firms shelve their plans to change and

business as usual returns. Supply chains and the procurement

practices that control them fade into the distance. Until next

time, that is.

There is an alternative. Many companies have already woken

up to the value good supply chain management brings to

business, even in a period of austerity. They know their focus

on supply chain delivers them efficiency and effectiveness

in day-to-day business. It also gives them the assurance that

when difficulties do arise, disasters with reputational and

business implications are averted through contingency plans

and well-established processes for implementing them. The

irony is, those businesses with the most robust contingency

plans, are those most likely not to have to implement them,

Best practice in procurement & supply chains. By David Noble

changeto Adapt

as the process of identifying risk is the first step to eliminating

risk. Such an approach ought to be an aspiration for every

business and is something that can be achieved if the following

principles are adhered to.

Align procurement strategy to business strategyChina, Japan and India offer opportunities for creativity,

innovation and a fast, agile workforce to match. This is

appealing to many Western organisations, but the results can

be long, complex supply chains, open to disruption. Shorter

supply chains are on offer in Europe and the UK, but come

with expense and rigidity, which can be difficult to overcome.

The key is to ensure supply chains match business strategy.

Involving the whole organisation makes sense and getting

the support of the CEO vitally so. CIPS’ recent survey of

senior supply chain managers found that more than a third

of chief executives are disengaged with their supply chain.

Similarly, our Time to Take Stock report highlighted the lack of

prioritisation placed on supply chain management compared

to CSR issues for example and we have seen those chickens

come home to roost.

There have been some improvements, with the influence

of supply chain professionals on the increase. A recent report

from KPMG noted many executives are increasingly looking to

procurement to engage the business in strategic conversations.

The two should work in harmony, as they are inextricably

linked. Thankfully, there is growing evidence procurement

departments are growing into this role. AT Kearney, for

instance, recently found that two thirds of companies are

seeing their procurement functions reporting directly to a

C-suite executive. A trend we all should welcome.

Build relationships Though procurement and supply chain management is

predicated on finance and hard facts, best practice also requires

a thorough understanding of who your suppliers are. Many

procurement professionals will be confident they have this

understanding, but this knowledge must stretch all the way

along the supply chain beyond first and second tier suppliers

to prevent nasty surprises later on. The horsemeat saga is a case

in point, and the recent Primark child labour case is a further

demonstration of what can go wrong.

Close relationships are critical in ensuring clear sight of

supply chains. Understanding suppliers’ needs and vice versa,

how to survive now, and how to grow in the future will make

you a ‘customer of choice’ when you need your supplier the

most. It’s no longer buyers having the upper hand- it’s a two-

way street.

Minimise riskRisk does not always have a negative impact on an

organisation. Risk often comes with opportunities and a

chance to change and innovate. Risk is only a threat when

it is unexpected and out of control, which is where risk

mitigation strategies are crucial. Supply chain initiatives such

as outsourcing, low cost country sourcing and lean supply

have exposed us all to new risks but with due consideration

of the four areas of risk management – risk recognition

(identification of potential risk); risk analysis (probability of


David Noble

David Noble was appointed chief executive of The Chartered Institute of

Purchasing & Supply on 1 June 2009. Previously he was group supply

director at IMI plc, a FTSE 250 UK multinational company specialising in

advanced engineering technology and responsible for £1billion spend.

A key achievement was pioneering Category Management and Strategic

Sourcing at Motorola in the mid 80s.


The Chartered Institute of Purchasing & Supply

The Chartered Institute of Purchasing & Supply (CIPS) is the leading

international body representing purchasing and supply management

professionals. It is the worldwide centre of excellence on purchasing

and supply management issues. CIPS has a global membership of

94,000 in 150 different countries, including senior business people,

high-ranking civil servants and leading academics. For further

information visit:

www.cips.org

risk); risk assessment (likely impact) and risk mitigation (plans

in place to reduce impact) it’s mostly covered. The recent CIPS

survey discovered that just over 40 per cent of companies do

not have a comprehensive supply chain risk mitigation strategy

in place at all; a worrying figure given the propensity of risk in

the world currently.

However, pockets of best practice do exist. Toyota, Aston

Martin and Jaguar Landrover, have collaborated to reduce risk

in their supply chains. By working together they’re developing

a tool that will map out their supply chain network that will

help them respond more quickly to disruption and prepare

for uncertainties ahead. By increasing transparency they will

troubleshoot any emerging problems before they paralyse their

supply chain.

Embrace technology Francis Bacon once said: ‘knowledge is power’. He was

right and nowhere is this more true than in procurement.

The collection and management of data is key to making

informed decisions, whether on commodity prices or the

manufacturing capacity of suppliers. This need will inevitably

increase, so access to and interpretation of that data offers a

competitive edge.

Ways of finding and retaining customers are also shifting

and social media plays a major part in this. McKinsey’s

The Challenges Ahead for Supply Chains report, identified that

a quarter of their survey respondents were expecting to invest

in IT over the next few years and only ten per cent looked

to social media to understand their customers’ needs. These

figures are likely to have reversed somewhat, but social media

offers further opportunity to track risk in supply chains, source

more knowledge and improve efficiency.

Marcell Vollmer, chief procurement officer and senior vice

president of the global procurement organisation at SAP

is an advocate of this approach. There are of course, well-

documented challenges that come with social media. Indeed

these are common to its general usage, but the benefit of real

time information direct from suppliers should not be missed

and reinforces supplier relationships.

Trained professionalsHaving skilled professionals in place with the right expertise

and experience makes all the difference. Procurement is

about more than just ‘buying’; it is understanding the full

purchasing and supply management process. As well as

having the competencies and skills to navigate the tendering

process, creating and managing contracts with suppliers,

understanding commodity pricing and the quality and value

of a product, not just cost cutting. Specialist training is also

critical, one of the reasons the MCIPS qualification is as highly

regarded as it is, offering a global standard and peace of mind.

Be sustainable and ensure supplySustainability remains critical, but it’s no longer simply the

green agenda. It’s ensuring all the goods and services needed

for an organisation to stay in business and flourish arrive on

time, to budget as efficiently as possible. If proof were needed

of the essential role sustainable procurement and supply

management practices play, then the Japanese earthquake and

subsequent tsunami must be that proof.

Many businesses suffered severe disruption and were

surprised at the depth of the chaos to their own business. Ford

for instance could not fill orders, because they were unable to

source a rare black metallic paint, showing that the smallest

chink in a supply chain can have a major knock on effect. It

also underlines the benefits of knowing your supply chain and

having the flexibility to change suppliers at short notice when

disaster strikes.

Sustainability involves a wide range of environmental,

social and economic consequences that need to be considered.

Non-renewable material use, design, manufacturing processes,

service delivery, logistics and recycling all have cost as well

as environmental implications, both negative and positive.

Managing waste in a more sustainable way for example makes

even more sense when costs of disposal are high, which more

often than not, they are. Ethical trading can offer a competitive

edge and attract ethically conscious customers, and less

wasteful energy use saves precious resources as well as reducing

costs for the business itself. This is particularly important in

a period where companies are increasingly under pressure,

sometimes by law, to report their carbon emissions and that

includes their supply chain.

Organisations can be at the forefront of their sector in

delivering on these issues and reducing costs or they can wait

until legislation forces their hand. The London Organising

Committee of the Olympic and Paralympic Games (LOCOG)

was a pioneer in this regard. LOCOG adopted a sustainable

approach to procurement and revolutionised supply

management for many games to come saving £114 million in

the process.

One thing is certain, and that is change. Your business

will undergo many unforeseeable challenges which is why

these principles are so critical and so too is the flexibility

to respond when things go wrong. Implementing these

measures and changing the status quo, will enhance the value

of procurement and will enable supply chains to respond in

extraneous circumstances, whatever they may be.

Best Practice

Holemans Group

Schmitz Cargobull

Mölnlycke Healthcare

As well as interesting features, ESCM is also your source to keep up-to-date with companies that form the backbone of the industry and the ongoing development they experience. It is also a chance to see how they are coping with the challenges within their respective marketplace and their burning ambitions to succeed, come what may.

Profiles Introduction


18 www.europeansupplychainmanagement.co.uk

Specialists in the production and marketing

of gravel and sand, family owned Holemans Group

has developed its expertise and successful corporate

activities steadily since 1873. Today the group boasts

a turnaround of £30 million from its five wholly

owned, strategically located production units and sells

approximately 3.5 million grains of sand and gravel per

annum. Among its 130 plus employees are highly skilled

engineers, merchants, administrators, electricians and

hydraulic excavator drivers, all working to exceptional

standards to ensure the best quality products for

the group’s long-term client base. “We have a long

tradition with more than 100 years of history and a lot

of our employees have a high level of expertise in the

extraction and production of sand and gravel,” says

Michael Willnes, sales manager at Holemans GmbH.

“Our personnel can take the sand, clean it and take

sand from zero to two millimetres and extract this part

into another four parts, which means we have a high

technical standard and can always meet the needs of

our customers. We have a strong relationship with many

of our clients, most have been with us for 50-60 years so

we know exactly what they require.”

The process of producing sand and gravel is in two

parts, the first involves the extraction of the resource

from the Lower Rhine floor at depths of ten – 40 metres.

To do this the group uses extraction units such as

large suction dredgers and bucket chain excavators

HolemanS Group MAkes suRe iT

cOnsideRs THe enviROnMenT WHen

undeRTAkinG iTs sAnd And GRAveL

exTRAcTiOn AcTiviTies

productionsQuality

excavation.

Aware of the

importance of

protecting the

environment,

Holeman Group

redevelops the

areas it excavates regularly, as Michael highlights: “We

are responsible for the change in the environment from

whatever area we extract resources, which is why

we recultivate the area afterwards as part of our

daily work. It is important to us to focus on

environmental protection, which is why we won an

award in the category of biodiversity at the German

Sustainability Awards.”

As each production unit newbuild takes between

five to ten years to be authorised, constructed and

approved, the group has a strategic and long-term view

for its success in the future, as Michael concludes: “The

excavation projects we are involved in can be on the

market for up to 70 years, which means there is a lot of

planning involved. My job is to plan for the generation

after and a lot of the decisions I make related to the

projects won’t be realised in one generation; this is why

we make hard strategies and this is how we grow.”

Holemansprofile

19www.europeansupplychainmanagement.co.uk

before the raw materials are sent to Holeman Group’s

production unit. “In the production unit we clean and

separate the sand and gravel from all contaminants,

including clay and wood, with high pressure water

at five or six bar. Once this process is successfully

completed we put the sand and gravel in different

grading curves, each customer has their own grading

curve with their own combination of sand and gravel;

sometimes we sell only sand, sometimes only gravel,

other times we mix both. For example, concrete needs

40 per cent gravel and 60 per cent sand. The products

are then sent to customers in either ships or trucks,”

explains Michael.

With markets in Germany, The Netherlands, Belgium

and Luxemboug, Holemans Group produces sand and

gravel as an aggregate for the construction industry at

five strategically located production plants in Germany,

as Michael explains: “Three of our five wholly owned

production units are located around the city of Wesel,

while our main office and one of our big production

units are based in Rees. These two cities are close to

the river Rhine, one of the most important areas within

Germany for extracting sand and gravel as it is one of

the largest areas for this sort of processing. We also

have another production unit in Cologne and intend to

construct two further units in the near future.”

The construction of two new production units is due

to the steady growing group’s aim to conquer new

markets by developing a client base in Damme and

also the life cycle of its plants, as Michael highlights: “To

increase our market share and grow a presence in new

areas we are going to build a new production unit near

the city of Damme, which is currently too far from our

production units for us to get to. We have two ways of

delivering to our customers, ship and lorry; customers

who request our lorry delivery are a maximum of 100

km away from the production unit, but Damme is

nearly 250 km away from Wesel or Rees. To gain new

customers we must develop new production units, this

is our strategy.”

Although Europe has been hit by the recession,

the group is confident about the future and keen to

continue growing at a steady pace through taking well

researched investments in new plants and its technical

and quality capabilities, as Michael says: “When we first

started we had one production unit; we were a small

company but our history and tradition is all about smart

and steady growth. There have been several years

where we haven’t increased production at all, but we

believe the real growth is in developing our technical

capabilities and enhancing the quality of our products

and services to our customers.”

Optimistic about the long-term future of the

group, Michael is focusing on the process of gaining

authorisation for the development of its new

production units, which is wrought with challenges

due to the environmental issues involved in resource

Holemans GmbH www.holemans.deEmployees 130-150Industry Dredging & production of materials


Schmitz Cargobull (Danmark) is a subsidiary

company of the German-owned Schmitz Cargobull

Group, the biggest and leading manufacturer and

supplier of semi-trailers in Europe. The Schmitz

Cargobull Group has manufacturing plants in Germany,

Spain and Lithuania and employs over 4500 people.

In the financial year 2011/2012, Schmitz Cargobull had

a turnover of approximately 1.639 billion euros and

produced more than 43,000 trailers.

Schmitz Cargobull has made a name for itself as a

leader in quality and innovation through a constant

focus on research and development activities. The

organisation has put together teams from a range of

different technical sectors to closely work together with

research institutes and testing facilities.

At present Schmitz Cargobull’s research activities

focus especially on safety, life cycle costs and weight

reduction. Here it has, for example, set new standards

with its in-house axle technology and trendsetting

construction designs. Furthermore, it is also developing

and enhancing such details as container locking

systems.

The results of its R&D efforts are constantly being

incorporated into series production. This way, every

single one of its customers profits from the company’s

innovative technology – and can exploit new potential

in the freight business.

Trailers are the cornerstones of Schmitz Cargobull’s

activities and each and every one of the company’s

trailers is manufactured in a modular system. This means

that it can meet customers’ wishes or industry-specific

demands by selecting and combining variations on

running gear, chassis and bodies. Using the diversity

that these building blocks offer, Schmitz Cargobull can

achieve maximum individuality in a quality-oriented

industrial series production.

On the new trailers side, the organisation has a wide

range of trailers, semitrailers and bodies on offer, and

there are models with all kinds of extras, depending

what their intended final use is. The range is divided

into five different areas – reefer, curtainsiders/platform

trailers, tippers, container chassis/swap chassis and

sliding floor.

The reefers and dry freight vehicles manufactured

by the company are a great example of the R&D efforts

referred to previously, as its S.KO COOL vehicles are

built using FERROPLAST panels with new NX17 foam

technology, which provides even better insulation. The

company develops FERROPLAST Insulation Panels and

they are constructed in a sandwich like fashion made

from highly refined metal coating layers enclosing a

rigid foam core. The vapour diffusion-tight panels with

their outstanding thermal properties help prevent

thermal bridging and are highly durable, repair-

friendly and especially safe. Trailer bodies made from

FERROPLAST are energy efficient, hygienic, age-resistant

and easy to repair.

In addition to the benefits of FERROPLAST, S.KO COOL

vehicles also have a unique semi chassis design. This

sees the reefer models sitting approximately 100mm

lower than competitor trailers, whilst maintaining the

same internal working height dimensions.

This reduction in overall height reduces the frontal

area of the trailer by approximately 2.4 per cent,

reducing aerodynamic drag force by the same amount.

Tests show that this can result in fuel savings of

around 1.2 per cent. In addition, the Schmitz Cargobull

semitrailer chassis and vapour diffusion proof body

KNOwN AS ‘THE TRAILER COmPANy’

SChmitz Cargobull IS THE mARKET LEADER

IN ITS FIELD

successJust more

Working in combination with the trailer side of the

business are a number of additional services, which

complete the Schmitz Cargobull offering: Cargobull

Finance for leasing and lease purchasing; Cargobull

Parts & Services for vehicle servicing and spare parts;

Cargobull Service Partners for repairs and maintenance

and Cargobull Telematics for trailer telematics.

Schmitz Cargobull already holds a market leading

position and its name is associated with leading

technology and solutions designed to help customers

be more efficient and cut cost. For the future the

company is keen to maintain its dedication and further

increase its presence in the industry. With this in

mind, it has firm ambitions to focus on the continuous

improvement of its core products and services, and

ensure customers always receive a comprehensive,

high quality service. Or as the company phrases it on its

website: ‘We offer our customers ‘just more’ – and will

continue on this successful path.’

Schmitz cargobullprofile


KH One StopKH OneStop is the partner to Schmitz Cargobull to all new trailers before delivery. KH OneStop finalizes trailers from Schmitz Cargobull with tail lifts, decorations, Thermo King Reefer units, partition walls and other options. KH OneStop has been awarded Service Partner of the year in Scandinavia by Schmitz Cargobull. KH OneStop operates in the trailer market in close cooperation with manufacturers, suppliers and customers to optimize solutions and keep trailers on the road.

benefits from the lowest possible weight.

Another benefit of Schmitz Cargobull trailers

is the option of adding its other ground-breaking

technology, such as ROTOS running gear. ROTOS is

the result of complex development work and field

tests in the axle and brake technology sector. This

running gear produced by Schmitz Cargobull reduces

the temperature and wear and tear on the brakes – a

definite plus when it comes to economy and safety.

Having such a wide variety of new vehicles on

offer makes Schmitz Cargobull a very attractive

supplier, however the company also recognises that its

customers prize flexibility and the need to react quickly

to changes in market conditions.

As a result, Schmitz Cargobull offers the facility for

them to replace their trailer with a new one and trade

it in part-exchange, or the ability to purchase a reliable

used vehicle. Used trailers are available at 22 locations

throughout Europe and those that meet strict quality

demands receive the Trailerplus mark. In addition, the

independent inspection company, DEKRA, thoroughly

checks the vehicles from top to bottom. Customers

can even check Schmitz Cargobull’s website for online

vehicle sales.

successSchmitz Cargobull www.schmitz.dkIndustry Trailers

http://www.knudhansen.dk


The company has a long history, with its

foundation starting in 1849, and a new chapter of

its evolution began in 1998 when it commenced

operations as an independent company. New

developments arose in 2007 when Investor AB acquired

it, and today its 7142 employees work in 22 offices across

Europe, the Middle East and Africa; two offices in North

America; and seven offices in the Asia Pacific region.

Its plants are located in Belgium, the Czech Republic,

Finland, France, Malaysia, Poland, Thailand, the UK and

USA.

Mölnlycke HealTH care IS oNE oF ThE woRld’S lEAdINg PRovIdERS oF

SINglE-USE SURgICAl ANd woUNd CARE SolUTIoNS

To ThE PRoFESSIoNAl hEAlTh CARE SECToR

healthyA

future

Mölnlycke HealtH careprofile

Anders Klinton

Pierre Guyot


Norafin IndustriesNorafin Industries is a producer of

technical nonwovens providing all-encompassing product solutions

to its global trading partners. The company services a diverse range of markets with its spunlaced and

needlepunched nonwovens, including medical and hygiene applications. Norafin’s medical nonwovens offer

a gentle touch, increased surface homogeneity as well as enhanced

absorbency properties. It would like to thank Molnlycke Healthcare for the

successful long-term partnership.

As Pierre Guyot, CEO explained, today Mölnlycke

Health Care is primarily focused on two areas - surgical

and wound care. He gave some more details about each

division: “The Surgical division is where we develop,

manufacture and commercialise a lot of innovative

products that are needed for the operating room

environment for surgical procedures.” These include

items such as antiseptics, clothing, face masks, scrub

suits, surgical gloves and surgical headwear.

Pierre continued: “The other division is Wound Care

and this is again designing, creating and selling products,

this time those needed to deal with different sorts of

wounds such as deep cavity wounds, infected wounds,

chronic wounds or skin tears.” Innovative products from

Mölnlycke include Safetac, a unique adhesive technology

that doesn’t stick to wounds; and BARRIER EasyWarm, an

active self-warming blanket.

Overall Mölnlycke’s wound products are designed to

provide a holistic and caring approach to the patient.

Pierre noted that the culture of the entire company in fact

revolves around helping the end users of its products:

“This is what we feel good about,” he said. “We feel that

we owe it to patients to make our products the best

quality they can be and it gives us a sense of purpose.”

Upholding this philosophy requires a very committed,

engaged workforce, and a strong track record of

innovation, and Mölnlycke has both. In addition,

Pierre noted that it benefits from a strong owner,

which has a firm vision on the long-term: “We have a

balanced footprint both in terms of operations and

manufacturing, and our main investor is a large financial

holding company in Sweden, which is well invested in

many big companies and concentrates on a long term

commitment to its portfolio. Being a private company

means we can take a long term view on the way we

grow and develop the business globally.”

This ability to plan into the future also adds value

to product development, as Pierre noted: “First and

foremost we invest a lot in research and development

– I would say we spend more on R&D than any other

expenses in the company, and innovation is a big focus

area for us. Furthermore, we are quite connected with

customers through advisory board meetings, and in

these clients explain their needs and give us feedback

about our products so we can ensure we are investing in

the right areas and meeting their clinical needs.”

He added: “Over the last few years we have also

acquired technologies, because we can’t invent

http;//www.norafin.com



everything ourselves. In 2012 we acquired a company

in the US called Brennen Medical, which provides

complimentary products to our burns range, and we

also acquired a German company, GerroMed, which

makes electrical stimulation technology for wound

healing.” By stimulating a hard-to-heal wound with

small electrical pulses, it can create an environment

where there is new cell and skin growth. “There is a

lot more to do in this area, but we are always looking

at new technologies as we want to be known as the

world’s most innovative company in wound care and in

surgical items,” said Pierre.

Given Mölnlycke’s dedication to finding the most

suitable solution to a wound or surgical problem, it

will come as no surprise to find that the company

also takes this approach with its own business

processes, and continually strives to make efficiency

improvements. In 2011 it was awarded Class A status by

business improvement specialists Oliver Wight, after

implementing Integrated Business Planning (advanced

S&OP) and almost eliminating forecast bias as a result.

As Anders Klinton, vice president supply noted,

Mölnlycke Health Care worked closely with Oliver

Wight in redesigning its business management flows

to achieve integration across the organisation’s

complex structure. As well as improved integration,

forecast bias was reduced almost overnight, and all

financial reports are now generated from a single

system, removing the potential for divergence

of critical planning data. “We wanted to balance

the supply chain end-to-end and improve the

transparency of the supply chain so everybody

knows where they stand. With Class A status

awarded across the company, we now have a very

firm and fixed process in place, which helps us

achieve alignment and synchronisation across all

functions of the organisation,” he said.

This focus on a very efficient supply chain is also

helping Mölnlycke as it expands into new markets.

“As the supply chain of the company is growing

so it becomes more complex and more difficult to

manage,” said Anders, “so the main challenge for

supply chain if you look end-to-end is to make it cost

efficient but also flexible.”

“When you consider our tactical aspirations,

we are focusing a lot on the supply chain,” added

Pierre. “We have also worked hard on improving our

distribution footprint in Europe and that is another

SGL‘Predictability’ is a keyword for SGL when developing customised solutions in supply chain management. That approach has convinced Mölnlycke to entrust it with its overseas freight. In close co-operation with Mölnlycke, SGL has established a supply chain solution that deals with the complex challenges all the way from production in Asia, Europe and the US until the goods are securely delivered.“Our ability to attract and sustain long term relations with huge SCM customers like Mölnlycke is based on our experience in aligning our customers’ expectations creating predictability and transparency within the supply chain,” explains Allan Melgaard, COO at SGL.“We make huge efforts in understanding all stakeholders and the different cultures within a company which is the cornerstone in making an overall smooth transition,” Allan added.Scan Global Logistics (SGL), a Nordic based company, established in 1975 and now with 90 stations on six continents, handles complicated supply chain solutions, as well as sea and air freight, aid & relief operations, industrial project and charter solutions.

http://www.scangl.com

http://www.lcpconsulting.com

big focus for the year, stabilising and making our

distribution model more robust.

“We have been working with LCP Consulting since

2005, but more recently, they have supported us in the

design and implementation of a completely new cross-

business integrated supply chain and distribution set-up

in Europe - with the objective to support our growth,

further improve customer service, and to reduce cost.

We’re now reaping the benefits of the changes we have

made - a much more robust, flexible and cost efficient

supply chain.”

The expansion referred to above is also at the top of

the agenda for the company as it enters the second half

of 2013. Said Pierre: “We are now establishing a direct

presence in Turkey, Indonesia and Saudi Arabia and we

are also looking at achieving a presence in South Africa

and Brazil by the end of the year.”

Mölnlycke also has an important project underway

in China and India. “These countries need help with

specialist knowledge, and working there allows us to

recognise local needs and create a portfolio of products

that can meet them,” said Pierre.

“As I said earlier, our mindset is about long term

commitment, so we want to build sustainable

partnerships in these countries. We discussed our ideas

with the Ministry of Health in China and how can we

help, and we discovered they didn’t have the skills they

need in terms of nurses and doctors. So we have created

the Mölnlycke Health Care Wound Care Academy,

which is an education initiative to help nurses better

understand wound management and aims to train

10,000 nurses over five years.”

Mölnlycke also aims to collaborate with major

hospitals and establish wound care centres of excellence

in both China and India, which will serve as models and

references for best practices.

Throughout its evolution, Mölnlycke Health Care

has remained proud of its Swedish heritage and the

entrepreneurial spirit that has consistently fuelled its

growth. It has established a track record of growing

sales by eight to nine per cent per annum over the last

seven years, and is determined to continue on this path,

with a new US plant under construction and targeted

financial objectives established for the year.

“We are investing more in R&D than we have

done historically, and we are aggressively looking

Mölnlycke Health Care www.molnlycke.comIndustry Single-use surgical & wound care products & services



at technology from outside through acquisitions or

licensing/partnerships opportunities,” concluded Pierre.

“We recognise the world is changing very fast and

we need to respond to the challenges, so whether it’s

marketing, R&D, HR or finance, all our efforts are targeted

towards continually improving and evolving.”

We have been working with LCP Consulting since 2005, but more recently,

they have supported us in the design and implementation of a completely new cross-business integrated supply chain and distribution set-up

http://www.ahlstrom.com

ESCMEUROPEAN SUPPLY CHAIN MANAGEMENT

Schofield Publishing10 Cringleford Business Centre

Intwood Road Cringleford Norwich NR4 6AU

T: +44 (0) 1603 274130F: +44 (0) 1603 274131

EditorLibbie Hammond

[email protected]

Sales ManagerRob Wagner

[email protected]

www.europeansupplychainmanagement.co.uk

European Supply Chain Management Issue 100

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