Aerospace, Defence & Industrial Award Winner 2008: Mondi

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This year German companies dominated the shortlist for the Aerospace, Defence & Industrial category. What is more, this was a high scoring sector and that always makes the judging a little more difficult.

SEW Eurodrive has, since 2006, been involved in a series of “LogNet” concept implementations for its European supply chain focused around optimising manufacturing with suppliers. Although there were commendable aspects to the initiative, the judges thought it a relatively narrow point solution that has been only partially implemented. Perhaps this is one for next year’s awards.

The Eurocopter Group was created in 1992 from the merger between the helicopter divisions of Aerospatiale-Matra (France) and Daimler Chrysler Aerospace (Germany) and is now a subsidiary of EADS. The Eurocopter entry was based on a new logistics centre located in Germany, capable of achieving spare parts delivery to anywhere in the world within 24 hours. Over the past five years Eurocopter has experienced strong growth which has focused the company’s attention on outsourcing of non-core activities and has resulted in deep collaboration with its logistics service provider, Fiege. Low production volumes and very high costs per part mean inventory levels tend to be high. With these significant constraints and high service level requirements the Eurocopter entry was considered good, but then this is a tough category.

K+S Kali GmbH operates a global supply chain for base chemicals. The company has vertically integrated and now owns the supply chain from the mine to its business customers and the solution it has implemented is focused on its global distribution network. K+S Kali has put in place an IT -enabled solution that gives the company true visibility of all the finished goods inventory in the distribution chain and has implemented an order management system to offer a globally integrated solution. The company manages 50 distribution centres through this approach and due to the nature of the product, K+S Kali works across several modes of transport – sea, road and rail – into which it has integrated its key transport providers. The result has been a significant reduction in transport costs by about 25 per cent globally. Again, this was a strong entry.

However, the winning entry came from Mondi, a global paper and packaging company that has production operations in 35 countries. Mondi was considered by the judges to be the only company in the category that demonstrated it had a truly end-to-end solution. The company has successfully completed a supply chain transformation, starting with a new and well-devised supply chain strategy.

“What they have done that is really innovative for their sector is that they have defined customer classes and integrated with specific customers more deeply. For example, they do collaborative planning with certain business partners, the thoroughness of the transformation they have undertaken makes them stand out.which has meant that they have had to improve their own forecasting and planning,” say the judges.

For Mondi this has been a multi-year transformation over which it has demonstrated that it has taken a rigorous step-by-step approach to implementation. The solution includes an intelligent strategy, sound process architecture, a new IT system that supports the new strategy and then implementation across the whole business which includes up to 20 manufacturing locations worldwide. Its primary focus was on increasing the transparency and visibility along the supply chain. Mondi has clearly achieved this.

The company may be 80 per cent through its journey to a complete solution, but Mondi can already demonstrate a 28 million euro cost reduction, a nine million euro reduction in working capital, sales growth and a significant improvement in service performance, all as a result of the supply chain transformation.

The judges concluded: “In terms of scope, in terms of completeness of implementation, Mondi’s holistic approach and the thoroughness of the transformation they have undertaken makes them stand out.”

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