In this panel discussion, Deanice Jones of Dairy Farmers of America and Matt Campbell of SCMO2 discuss sustainable supply chain strategy at SCM 2014 in Las Vegas. Topics covered in the discussion include:
- What defines a sustainable supply chain
- How information systems can support sustainable practices
- How globalization is impacting supply chain sustainability
- Examples of sustainability challenges companies are encountering in their supply chains
Lauren: Hi, I’m Lauren Bonneau with SAPinsider, I’m here at the SCM CRM 2014 event, and I’m sitting with Deanice Jones, project manager of Dairy Farmers of America, and Matt Campbell, principal of SCMO2. Thanks guys, for joining me, I appreciate it. So, we’re here today to talk about the sustainable supply chain, building a sustainable supply chain, and you know, sustainability has really been a buzzword for the past few years especially, probably more than that, and I just am kind of curious from your perspectives, you know, what does that really mean to you? What is a sustainable supply chain?
Matt: I’ll start. For us, supply chain planning systems, specifically sustainable supply chain is really building a solution and a network that has little waste in terms of the transportation and manufacturing, so you know, making sure that you’re having as few as possible emergency shipments, full truckloads, and you know, minimizing the transportation cost throughout the network, those are some of the big things that we really try to approach in terms of developing an overall supply chain solution.
Lauren: Ok, great. And do you have a perspective to add to that, or…?
Deanice: I do, I come from the manufacturing environment, and so it’s very important, like Matt was saying, is taking that manufacturing and taking the lean and the ways to making it so that we can do best practices and can take all of that waste out through the throughput from the vendors all the way through manufacturing and shipping out with this transportation, so it’s very important to do that.
Lauren: Ok, great. And in today’s, you know, global economy the way that business networks are starting to become you know, interconnected as, you know, a necessity, you know how is that kind of affecting, you know, how supply chains operate?
Matt: Yeah, I think like you say there’s more and more cases where you have subcontractors in your network and collaboration with vendors that are expecting you to have a VMI process where you’re in charge of replenishing your system, so replenishing goods to their particular stores or DCs. So as a result as you say there’s a lot more geographical reach a collaboration that’s required to basically make it all work and as a result, the processes need to be very sounds, systems in place to be able to facilitate that collaboration and ultimately make it all work and come together. I think it used to be more it would work within the four walls of your business, and you know you had customers and vendors, now it’s much—not so black and white in terms of how that all works, so as a result you really need to have a process and collaboration in place to make it so that the information flow across the whole network is shared so that quick decisions can be made and basically you can service your customer.
Lauren: Ok, and specifically in the manufacturing space, you know, how do you feel about—I’m sorry I’m really distracted by the chimes—you know specifically in manufacturing, how do you feel about that?
Deanice: Well, and I would agree with Matt, is that using an application, a software application that can put us all on the same page in the global industry, you know, we have manufacturings all over the United States, and it’s very important for our organization, especially at the executive level, to be able to see the same type of data that our plants see and to be able to operate, and so being able to see that data, we can take that and fine-tune that and put it into the operations and again go through that best practice and the business processes that help us do that sustainability and take that waste out of the operation.
Lauren: Great. And so, you know, Matt, can you specifically kind of give me some examples of, I know you work with a lot of customers that are, you know, trying to make their supply chains more sustainable, can you kind of maybe give a few anecdotal you know, examples of you know customers that have had particular issues that they’ve come to you and said, you know, we’re having this problem, and kind of what advice you gave them?
Matt: Yeah well, specifically we get a lot that are, you know, looking to optimize their production lines and are having issues with, you know, either not having adherence or the factory’s running what they want or, you know, they’re really just trying to get the most out of their production resources and capital equipment and then still have a solution that looks at inventory, so a lot of times what we’ll do is we develop and optimize a production solution where it gives them the visibility to, you know—what are the latest demand signals at the floor and, you know, develop a solution that optimizes the changeover times from, you know, from one product to the next so that they get the most use out of their production resources yet still are, you know, not building things that build up inventory across the network, and so we see that one over and over again and as a result help them come up with a process and solution from a systems standpoint that it gives them the visibility at the plant, as you mentioned, and then also, you know, makes the optimal use of all the resources that they have at their disposal at the factory.
Lauren: Ok, and so specifically, you know, as an SAP customer, Deanice, you just—I assume it was recently, I don’t know how recently the project, but you implemented SAP Plant Maintenance at the business… you know where—how long ago was that? Is the implementation complete? Can you give me kind of a snap shot of what the project entails?
Deanice: I can. Our organization decided for years ago to actually implement SAP throughout the manufacturers, so that was forecast to finished goods, warehousing, quality, financials and all those. So once we were successful at that and got those up and running, then the company decided to put in the plant maintenance. So for about the last year-and-a-half we have been going from plant to plant and implementing the plant maintenance-side of things and there’s a lot of prep work, and again, I’m a manufacturing operations person so it’s about going back to those best practices and business processes that help us implement the software that helps us manage that business, so that at the end of the day the companies can see the data and help improve the efficiencies and effectiveness of doing the plant maintenance. So our company—we’re into about the tenth plant of implementing and they have all been very smoothly—almost transparent I should say, but it’s been very well and it’s a great tool. I think the business practices and processes and the software… they have to mesh together. I think one feeds of the other one so it’s a very good tool and it’s going to be very good for us.
Lauren: Great, and so you said about ten so you’re almost halfway there? Is it 25 plants? You’re rolling it out too? So when’s the light at the end of the tunnel?
Deanice: The end of tunnel is hopefully the end of this year. We prep these plans for months and months on the physical aspect, the physical inventories, the master data that has to be good and solid before it’s converted into SAP, so we work with that, again, months in advance to get that prep before we actually do the PM. So once we get to the state of putting in the PM, it goes very smoothly, so we’re hoping by the end of the year we will have all 25 plants up and running on it.
Lauren: Alright, great. And so you did mention, you know, putting in the technology is one thing, you know, adjusting the business processes is another thing. Have you had, you know, massive change managements… efforts at the company?
Deanice: Oh absolutely! And that was one of our decisions, that the company didn’t want it to be just a software implementation. They wanted to enhance their business practices and processes so we’ve done a lot of that change along the way. And of course that takes input from the manufacturing sites. I’m the project manager but I have to listen to the application side to design the system, but I also have to very in tune with the manufacturers so that we give them the requirements that they need to run their business, but still do it effectively and efficiently.
Lauren: And so Matt, have you had a lot of experience, you know, kind of dealing with change management and helping companies, you know, through similar projects? Can you give me some advice for, you know, how to navigate that?
Matt: Yeah, well similarly as you said, especially with some of these more complex, you know, systems and limitations, the change management effect is the most important part of the implementation, and that’s not just the training piece which is a big part of it, but it’s sometimes a major change and even a job role and setting up structures across the organization for instance, you know, what if the factory… they’re trying to do… where it used to be, you know, produce, produce, produce and now it’s about produce the plan so a lot of the optimization or advanced software implementations we find… that there’s a center of excellence that really needs to be built up within the organization to be successful, and a business not only needs to come up with speed but ultimately support themselves—that’s a long journey, you know, several years to get there, so as I said the training component’s a big piece of it, but it’s also just across the whole program to make sure that there’s , you know, setup for success from the very beginning from the top down and ultimately making that—the most important part of the project—successful.
Lauren: Great, and Deanice, Matt mentioned centers of excellence… that’s something I hear a lot of—is that something at DFA that you guys are…?
Deanice: It is. Once we implemented the manufacturing piece, which has been four years, then we established the center of excellence area that support the plants that are live on the manufacturing and so on and so forth, and they do the same thing with the plant maintenance. So you have to have those knowledgeable expertise people in that center of excellence to be able to support the ongoing—and enhance—the project as it goes through.
Lauren: Great. So I’m just wondering—so you’ve rolled it out—plant maintenance—to these ten plants, you know, have you felt any tangible benefits so far, you know, anything that you kind of speak to or is it still, you know, wait until we’ve rolled it out before we really can kind of feel the benefits and just…?
Deanice: Well, no, I think the plants that we rolled out—what we have found is there’s so many control parameters that you need in plant maintenance—in inventory, in any type of the manufacturing, but being able to start viewing the data at the end of the month—you know when you look at your KPI, your key performance indicators, you start seeing that data and you can start seeing where you need to work on upstream, you know, if it’s the efficiencies, whatever it is so… we see benefit, and I think keeping the inventory under control, you’re spending, your buying of inventory, you’re controlling it… not leaving it, you know, not having a lot on the shelf, but having enough where you don’t shut the plants down... I think they’re already seeing the benefit in the plants that have been up on it for a while.
Lauren: And I’ll just ask, you know, one last question. Times are going off. I want you guys to get to the Keynote , but do you have any advice for any other companies who are considering implementing something such as plant maintenance? Any advice that you would give them? Maybe a hurdle or something to watch out for or just… is there something that surprised you about the project that was different from the others?
Deanice: Well, I would say, you know, you have to plan and you have to listen to requirements. You can’t just come in and say “Hey, this is what we’re going to give you, this is the design of the software,” but listen to each requirement and make sure before you take them up that you fill the needs of those requirements or change what they’re doing to that process to fit the requirement , so yeah you get hurdles like that, and again, I’m a project manager so I am a planner—at following up—so we don’t like surprises but we know in the everyday world that there’s all kind of surprises , so you just have to have an avenue and you just need to get as much as you can upfront so you can minimize those massive surprise that would cause you not to be successful at the implementation.
Lauren: Ok. And so, Matt, any advice that you can give to folks?
Matt: I mean I think it really depends on, you know, what the implementation is, but all of them are ultimately, as you say, the planning of it, getting the sponsorship and ownership across the whole business is key and there’s a lot of big changes going on in the supply chain planning space—new technologies being available and different ways to deploy them whether it be the cloud or on premise, so I think the big thing is to have a plan, a long term plan, so what you might have had planned a year ago—the landscape’s change so—one of the big things is to really put together and reevaluate what you’re doing and what you’re roadmap is for the next 5 years and then ultimately look at trying to achieve what the goal is, what we’re trying to achieve as a business in terms of improvement and build a roadmap and solution to get you there, and I think that’s really the key also in this changing environment that we see.
Lauren: Ok, great. Alright well thank you both for joining me. I really appreciate it and I’ll let you guys get off to the Keynote.
Deanice: Thank you!