Winner: Dell (2)

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In recent years the Hi-tech sector has tended to set the standard. This season saw five very different finalists on the shortlist – Chloride Power (jointly with CPG Logistics), Dell, Rockwell Automation, Swisscom Mobile and Computacenter (both the latter being shortlisted last year as well).

The Chloride Power – CPG bid looked at a business transformation process over the past four years, reflecting Chloride’s change from a battery manufacturer to a global supplier of power supply systems for IT and other uses. The nub of the case is the creation of a centralised European Distribution strategy based on a hub at Duisberg.

Richard Lord, md of CPG Logistics, comments ‘We knew we could make a difference to the business that went way beyond a cost-cutting exercise and that between us we had the proven expertise to make it happen. Both partners have been fully committed and have accepted their share of the risks as well as the rewards’.

The project hinges on two key relationships for Chloride – with CPG Logistics who act as a 4PL across Europe, managing all the 3PLs including Geodis who actually run the European hub, and with PhoenixTec of Taiwan, to whom manufacturing has been outsourced.

However, although the judges acknowledged that the operation has come an extremely long way, they felt there was still a long way to go – citing, in particular, the absence of effective time demand signals, collaborative forecasting, and the inefficient European tax structure.

Computacenter has a strong market position (50 per cent in the UK, and significant operations in France, Germany and the Benelux countries) and are beginning to grow their managed service offering. But a continuing downward pressure on prices in what is rapidly becoming a commodity market really requires a maximal contribution from the supply chain, and to this extent the firm is hampered, at least under the criteria of these Awards, by its heavy investment in a highly automated warehouse operation at the height of the last IT boom.

Rockwell Automation, based around Eindhoven, is of course the EMEA subsidiary of the US company. While Rockwell is number one in the States in its field of industrial automation, the company only ranks number four in Europe, but to support growth over here they have created a central hub in Best, The Netherlands. This fully automated facility has been on line since 2000, shipping some 4,000 lines a day (from up to half a million skus) across Europe with an accuracy of 99.9 per cent.

The assessors found strong evidence that seriously high targets were being met by a supply chain management very focused on performance. They were though, less convinced as to how well other supply chain activities, and the firm’s general organisation, support this highly efficient link.

Swisscom Mobile is another familiar name in the Awards, and like several others, the story here is one of serious business and supply chain transformation following, in this case, the opening of the Swiss telecoms market in 1998 and the market’s subsequent maturity. Since the Swiss mobile market has reached a penetration rate close to 80 per cent the task has changed from customer acquisition to customer services and retention, where supply chain management becomes a strategic issue.

The assessors found plenty of evidence that change is indeed being achieved – ‘a demonstrable track record of delivering supply chain improvements which have not only delivered savings to the business but also provided benchmarks in their industry’. Particularly noted is an innovative after-sales/service model, RepairNet, whereby customers can hand in their phone at any shop for repair in a four-day turnround, borrowing a temporary replacement the while. The whole end-to-end process is monitored and event managed, with progress reported to customers, naturally, by SMS. Very impressive.

Then there was Dell. The Dell business model of complete build to order, effectively zero WIP and so on, needs little repetition – the book’s a best-seller, after all. The entry was on behalf of Dell’s EMEA operation in Limerick, Republic of Ireland, which ships 40,000 units a day, with an order back-log of just 2-3 days. Orders are merged in transit to further accelerate the process.

The assessors verified that 97 per cent of orders are built to customer request date, inventory turns are a staggering 99 per year, and the Limerick plant is now producing four times as many units from half the space that was required three years ago.

The judges noted how Dell is managed as a network, rather than a set of point-to-point moves, and that ‘the connection between market and supply chain is immensely impressive’. Feeble attempts to pick holes in the entry came to little – ‘no capability to make forecast orders’? – but that’s not the business they do.

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