Energy & Utilities Seminar Report - Practice Makes Perfect: Total Logistics shares best practice with utilities companies

Practice Makes Perfect Total Logistics shares best practice with utilities companies Leading independent supply chain consultancy, Total Logistics, brought together logistics practitioners from utilities companies and FMCG brands in April to share their experience and recommendations at the firm’s Best Practice Seminar. Led by Total Logistics’ Les Beaumont (who sits on the Chartered Institute of Logistics and Transport’s Utilities Supply Chain Forum), the day included sessions from Dave Collis of UK Power Networks, Martin Ball of Twinings and Andy Keith of Total Logistics. Dave Collis provided delegates with a fascinating insight into the work UK Power Networks has done to revolutionise its approach to cable management. Key to creating efficiencies within the business was a total review of service level agreements, key performance indicators and contract terms with suppliers and contractors. He said: “Visibility was a key issue for us, as the business had little real-time control on costs and performance in this area due to lack of information and agreed KPIs.” Consolidate to save The solution lay in consolidating three warehouse sites in the south of England into one location at Dartford, which enabled stock holdings to reduce from 12 weeks to just over three, thus saving more than £1m annually. Transportation was another important area where Dave and his team created value, outsourcing the 3PL function and clearly defining roles across the UK Dave Collis of UK Power Networks discusses the benefits of supply Power Networks team and at Ceva, their chosen chain consolidation transport provider. He commented: “We have shown that utility businesses can achieve significant savings by focusing on areas of their supply chain and really understanding where costs, value and inefficiencies lie. By better planning; communication with suppliers, customers and staff; and setting clear KPIs, we have made huge changes to our supply chain management that improved the understanding of this core function across the business.” 5a Market Place, Wokingham, UK, RG40 1AL Noordhoven 19b, 6042 NW Roermond, Netherlands T: +44 (0)118 977 3027 | F: +44 (0)118 989 0081 T: +31 (0)475 322 306 E: info@total-logistics.eu.com E: infonl@total-logistics.eu.com S&OP – It’s good to talk To the uninitiated, sales and operations planning (S&OP) sounds as exciting as an actuarial report. However, Martin Ball, head of logistics at Twinings provided a fascinating overview of the tea maker’s adoption of this planning technique, which has recently been introduced to the UK operations. With anticipated inventory reductions of up to 50 per Martin Ball of Twinings presents an overview of their implementation cent and error reductions in the region of 20 per of S&OP cent, the adoption of S&OP is a key element of the business’s strategy moving forward. Martin said: “While it might sound like a dry topic to some logistics managers, S&OP is really all about better communication between departmental heads to gain a much more complete picture of demand and supply. Without doubt our use of this tool has made our UK operation more agile and responsive, thus creating real competitive advantage for us.” According to Martin Ball, many companies’ attempts to implement S&OP have failed in the past due to a lack of detailed planning; a lack of support from the senior management and early evidence that the process brings tangible benefits. He said: “There are no silver bullets in supply chain planning, but setting out a clear plan of action, getting top level sponsorship for the project and demonstrating value early in the process are three key success factors.” Consolidate to win Lastly, Total Logistics’ Andy Keith looked at the issue of collaborative operations, citing a landmark project he and his team completed in the newspaper industry, which illustrated the potential power of independent organisations working together. He said: “With the costs of running an 18T rigid vehicle for 200 miles, rising from £270 to £320, the Andy Keith of Total Logistics discussing the benefits of collaborative operations continuing challenge of eradicating empty running and low utilisation, and the huge potential savings in areas such as vendor managed inventory (VMI), there is a huge opportunity for utility companies to collaborate.” 5a Market Place, Wokingham, UK, RG40 1AL Noordhoven 19b, 6042 NW Roermond, Netherlands T: +44 (0)118 977 3027 | F: +44 (0)118 989 0081 T: +31 (0)475 322 306 E: info@total-logistics.eu.com E: infonl@total-logistics.eu.com While there were strong financial reasons to consider collaboration – with grants available to reduce road miles and the cost of oil likely to continue to rise – Andy Keith advised that a clear, shared strategic rationale needed to be agreed from the outset. He said: “While there are areas of opportunity in terms of supplier integration, cross-utility synergies, inventory pooling and procurement, businesses still fail to collaborate without a shared target. The key to success of collaboration is maintaining confidentiality for each participant and appointing a trusted independent facilitator” Les Beaumont said: “The event was about sharing best practice, demonstrating it in action and exploring how utility companies can take successful methodologies from other sectors into their own. The sessions addressed key areas of interest which had been identified by a number of utility companies as areas with opportunity to improve.” For a review of the material covered in the Les Beaumont of Total Logistics in discussion with Bob Steward of presentations, please contact Les Beaumont on UK Power Networks 01189 773027or at les.beaumont@total- logistics.eu.com. 5a Market Place, Wokingham, UK, RG40 1AL Noordhoven 19b, 6042 NW Roermond, Netherlands T: +44 (0)118 977 3027 | F: +44 (0)118 989 0081 T: +31 (0)475 322 306 E: info@total-logistics.eu.com E: infonl@total-logistics.eu.com