Unipart help a major UK & European FMCG company to reduce costs and become more competitive by transforming their supply chain

A major supplier of personal care products to the UK and European retail sector had a pressing need to improve supply chain performance. Amongst fierce competition, the client was under pressure from customers to reduce costs.

A recent study had shown that our client would become increasingly uncompetitive in the medium to long term. Meanwhile their two biggest competitors were already providing products to market with a much lower cost base. Factory efficiencies, sales & operational planning, logistics costs, product complexity and the supply chain footprint were all identified as areas of opportunity.

The challenge (phase one)

Given the size of the task and their lack of expertise and capacity, the client decided to seek out a supply chain partner who could facilitate the creation of a detailed two to three year plan and support the delivery of the key actions and milestones. Unipart’s deep understanding of operational excellence, along with our expertise and skills in developing our own world class supply chains, meant Unipart were the stand out candidate to become our client’s strategic partner.

Unipart helped the client design, develop and execute a major supply chain transformation programme. The key phases of this programme were designed to drive rapid results as well as significant benefit over the longer term.

The Unipart team initially engaged the Executive Leadership team to develop strategic aims and principles, a 5 year milestone roadmap, a set of robust operational & financial measures, a robust governance & review process and an organisation wide communication plan.

In the first phase, an expert team was deployed into three pilot factories to raise the level of performance by developing and implementing a new, lean operating model. The team focused on developing capability and supporting the creation of the clients own central team of experts to support future roll out.

How we helped (phase two)

In phase two, Unipart deployed a multi-skilled
supply chain team to work within the business, including leadership teams, to fully diagnose the current supply chain footprint. Best practice modelling techniques identified the best locations and options for sourcing, manufacturing and logistics. The Unipart team then recommended a business case to the company Board which would deliver a rapid step change in business performance.

The plan required factories to be integrated and subsequent processes and facilities re-located. Unipart developed the processes and standards to “lift and shift” key equipment and upskill the receiving factory. This ensured a timely transfer, to budget, with no impact on customer service.

A product rationalisation programme ran in parallel to the relocation activity. Unipart engaged the operational, sales and procurement teams in a key activity to improve service, lower costs and free up working capital by improving the product ranges. This would necessitate close working with key customers and implementing a “runner, repeater, stranger” strategy.

Lastly, Unipart identified further opportunities to generate and release cash. By developing and introducing a planning system driven by customer demand, rather than “for stock or just in case”, working capital could be significantly reduced. The on-demand ‘pull’ planning process was developed, tested and rolled out across the supply chain to reduce inventory and improve service.

The results

Throughout the delivery of the supply chain transformation programme, significant benefits were realised. At the same time, the client now has a more capable work force and a strong team of operational excellence experts that will support continuous improvement and ensure improvements are sustained.

  • £8m saving per annum through process rationalisation and supply chain footprint development
  • £2m validated savings through the implementation of a new factory operating model
  • Overall Equipment Effectiveness increased from · 70% to over 90% in all factories
  • £1m cash generated through reduction of customer defects and subsequent reduction in the cost of customer claims
  • £4m of inventory reduction through the introduction of an ‘on-demand’ planning process
  • Training and development of a 10 strong, central team of operational excellence experts to support future projects and continuous improvement
  • Re-location of 4 large production lines and associated equipment, on time and to budget. This was achieved with zero impact on customer delivery
  • 400 people trained across the organisation in the new operating model

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