Ono Packaging, based in France, manufactures expanded polystyrene trays for the food sector. The company’s key customers are French supermarket chains, including Carrefour, Intermarché and Système U.
Following a leveraged buyout, the business strategy was to increase the value of the company through growth using existing capacity but with increased agility. Christophe Aynes, president of Ono, believed this could be achieved through improved supply chain performance and inventory reduction, and in October 2006, he engaged consulting firm, Oliver Wight, to implement an Integrated Business Planning programme (IBP).
Ono has one small warehouse on-site at its French plant and didn’t want to expand its inventory beyond this, regardless of growth.
Supply chain director Patrice Blandineau was tasked with maximising the company’s existing storage capacity (by optimising days-of-stock) and reducing the logistics cost impact on EBITDA.
“We are obsessive about constantly driving down inventory but top of the list for our supply chain strategy is to deliver the best possible service to our customers and any new business has to be integrated into the current SCM organisation, without any disruption,” he says.
As well as selecting and monitoring the most appropriate hauliers to work with, his objective was to get SKUs under control, by speeding up new product introduction, and discontinuing older or obsolete SKUs as new ones were introduced.
Ono has been able to run increasingly smaller batches with shorter lead times, and inventory days have reduced from 40 to 27 without negative impact on customer service, which is now consistently 99 per cent.
As a consequence of the improved co-operation between manufacturing and supply, sales forecast accuracy at an SKU level has also improved from 30 to 50 per cent in two years. Blandineau has applied an ABC classification for SKUs and for his fast runners, forecast accuracy has improved by nearly 100 per cent in the same period, from just over 40 per cent to 80 per cent.