Improving Customer Service Whilst Cutting Cost

The Problem

The supply chain was struggling to deliver the level of service their customers expected,

raising the possibility of lost sales. In addition there were strong financial and efficiency

pressures internally to reduce working capital by cutting inventory levels.

Bourton Group were approached to help the internal team to identify opportunities for

improvement, with particular emphasis on finding and implementing effective ways of

reducing finished goods inventory whilst significantly improving customer service levels.

The Solution

Our Approach

Bourton Group worked closely with the client’s internal team as well as with supply chain

professionals from across the wider Group to:

• Select the suite of supply chain activities that would comprise the supply chain

process to best fit the geographical demand patterns throughout Europe

• Develop these activities and the organisation to the highest level of competence

• Work within current global IT system (MfgPro) tailoring and integrating it to the

required process at all stages of the Supply Chain

• Ensure sustainability

• Adopting this approach ensured that supply chain best practice was combined

with what was practical, cost effective and sustainable for the client company and

the Group as a whole.

Implementing Effectively

The assignment was undertaken in two stages. First a detailed diagnostic was undertaken

to identify and agree the solution options, benefits and implementation plan. Then the

implementation programme was executed so that improvements that were delivering the

most benefits in terms of improving customer service and cutting inventory levels were

prioritised and delivered first.

At this stage the benefits were estimated to be an increase in product availability to 95%

and a stock reduction over the seven European warehouses of 1.7 million litres. The

diagnostic identified a programme of thirteen opportunities for improvement, grouped into

four areas:

1. Managing Demand

2. Reducing Response Time

3. Reducing Variability In Supply

4. Manufacturing & Supply Chain Architecture

The 13 projects were largely interdependent, elements of one enabling another.

Therefore the challenge was to coordinate the people, process and technology aspects of

the improvement programme to maximise the benefit and minimise the timescale. To

achieve this, projects were assigned and progress monitored both in real time and at a

weekly project meeting.

Bourton’s role was to support the initial stages of the improvement programme by

providing deep supply chain and Lean Sigma expertise, objectivity and skilled resources to

support and complement the in-house teams. Bourton always played a supporting rather

than a leadership role so as to ensure that the experience and learning was embedded in

the company and that improvement was ongoing and sustainable. For example, once this

programme had delivered the improvements sought, the improvement programme

manager was deployed to another Group site to emulate the diagnostic and build a similar

programme of work to improve the Supply Chain processes there.

The Benefits

Value Delivered

• The processes that were put in place enabled the company to respond to a cash

generating call from Group head office, contributing €8m in Operating Working

Capital reduction.

• One year after the commencement of implementation, service levels for the all

important “A Class Runner” products had consistently risen to 93% (from the

initial 80%). At the same time, total European stocks had reduced by 1.9m litres.

• The increase in product availability helped ensure that sales volume continued

through the global downturn

• About 10 people from a number of departments significantly contributed to the

Case Study: Leading Paint Manufacturer & Distributor

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