Thursday 18th Apr 2019 - Logistics & Supply Chain

Winner: Borealis

Just two entries made it into the finals in the Engineering & General Manufacturing category this year – whether this reflects the general drift of manufacturing away from Europe, or the more specific concentration of European manufacturing in the separate High Tech and FMCG/CPG sectors is not clear.

At all events, the judges were faced with two strong entries, but as alike as chalk and cheese – the differing constraints and environments of aftermarket parts manufacturing at TRW on the one hand, and on the other, the flows of a process polymer industry at Borealis. TRW Automotive Aftermarket, with European headquarters in Neuwied, Germany, manufactures and remanufactures principally safetyrelated components – parts for braking, steering, suspension and occupant safety systems – for distribution both into the vehicle manufacturers’ service network and into the independent aftermarket. With manufacturing sites in Germany, Spain and the Czech Republic and distribution across the EU and beyond, the company handles 75,000 skus (which translates to 390,000 channel-part articles). Key features of TRW’s entry included the degree of European demand planning integration, the automated deployment of inventories to regional DCs based on demand forecasts and customised inventory management standards, an adaptable supply chain capable of meeting ever-changing customer requirements and new business models, and the use of IS technologies to collaborate with customers and suppliers within the extended supply chain. The judges did however ponder whether as an aftermarket supplier TRW might have been better assessed in the Retail & Distribution sector.

Whereas TRW is a manufacturer of discrete parts, Borealis is essentially a process industry – the polyethylene and polypropylene polymers are converted into products as diverse as food packaging, medical devices, diapers, distribution pipes, automotive parts and power cables by its customers. Operations are predominantly European, exports out of Europe constituting just 10 per cent of the business, but the supply chain has to collaborate very closely with Borouge, a joint venture partner in the Middle East.

Supply Chain Vice President Jeremy Bentham comments that ‘Our core supply chain activities are customer service, demand and supply planning, distribution, and a firm link into feedstock and raw material procurement. The group business strategy is a key driver of how the supply chain operates, and much focus is put on customer orientation and delivering reliable services. Borealis has a relatively complex blend of products, production plants and customer locations which puts particular demands on the supply chain.

‘The Borealis supply chain journey during the past four to five years has contributed to the successful transformation of the company. Several projects have generated significant benefits both in terms of cost and of value creation. Process improvements have resulted in our key planning and control processes being recognised at ‘world class’ levels, and they have provided us with long term visibility end to end from customers to suppliers. Increasing our collaboration with customers and suppliers is firmly on the agenda and will be an important focus for the future’. The assessors were able to confirm this view. Particularly praised was the end to end process architecture: even though this does not formally include procurement in the supply chain, sales and operations planning clearly drives collaboration both internally and externally. Ownership of
processes is clearly defined and the drivers of complexity are not merely well understood but actively managed. Although Bentham talks about collaboration in the future tense, it was clear to the assessors that the work in mapping processes in conjunction with key suppliers is already creating collaborative models that focus on value creation, and that senior business management is actively involved in managing and developing collaborative models with all strategic suppliers and customers.

Supply chain KPIs are directly derived from the business scorecard and cascaded down to individual objectives while maintaining well-defined cross-linkages at all levels. The assessors found a genuine openness with KPIs shared across the company intranet, and performance data actively discussed with strategic suppliers and customers as the basis for corrective action. The judges commented: ‘We have chosen Borealis as the winner in this sector because of the exemplary top-level commitment to the supply chain, the way the whole process is well thought-through and the genuine supply chain “feel” throughout the organisation, confirmed by robust results and metrics.’

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