30 SCS:THE EUROPEAN SUPPLY CHAIN EXCELLENCE AWARDS 2008 DECEMBER 2008 SUPPLY CHAIN STANDARD
www.supplychainstandard.com
Public Sector, Services & Utilities Sponsored by BT Supply Chain
Shortlisted
Electrabel
Guy’s & Thomas’ NHS
Foundation Trust
Metronet
Jan Martens (centre left),
program manager WING,
Electrabel and Dennis Beel
(centre right), assistant
program manager, collect
the prize for the Public
Sector, Services & Utilities
category. Presenting the
Award is John Bamber (far
right), general manager, BT
Supply Chain, engineering
materials and Midlands
operations. Also pictured is
Jeremy Vine (far left).
Winner
Electrabel
The Public Sector, Services & Utilities category is one of
the most difficult awards to judge. The great diversity
of entries, from power generation and railways to
medical services, makes direct comparison a tough task.
However, the scoring mechanism stood up to the test and a
thorough analysis of the submitted material, together with
further in-depth questions at the interview stage, enabled the
judges to reach a sound conclusion.
In the rail industry change does not come easily.
Metronet has worked from a low base to achieve
improvements in ordering, tracking and controlling stored
goods and materials. By working closely with several
partners Metronet has simplified its pricing regime, which
has resulted in a 12 per cent return on sales. Major changes
too have been made to stores areas and satellite stores are
being introduced. Although these are early developments,
the judges fully appreciate the great efforts that have been
made to get this far.
Over the past 12 months Guy’s & Thomas’ NHS Foundation
Trust has been focusing on gaining control over basic supply
chain practices, such as category management,
rationalisation of supply base, inventory tracking, and fill-rate
improvement from suppliers. Under the previous process
clinical staff counted stock and completed paper requisitions
to re-order supplies from multiple suppliers. The process was
time consuming, inefficient, and created over-stocking and
obsolete stock. The introduction of a JIT service has reduced
stock levels down to between one and five days, saved
individual theatre sisters four hours per week, achieved nonrecurrent
stock holiday savings, and reduced the risk of waste
from over-stocking and breaking bulk.
But what really impressed the judges was the introduction
of a totally new automated replenishment system in theatre
as part of the supply chain network – this system does not
exist on this side of the Atlantic. And for this the judges put
Guy’s & Thomas’ forward for consideration for the Innovation
award – what’s more, it won.
However, the winning entry for the Public Sector,
Services & Utilities category came from Electrabel, the
Belgium-based power generation company. On a two-year
journey the company moved from a cost-plus operating
model to one based on availability. This transformation
centred on a project named WING, which focused on
warehouse, inventory, master data management and
maintenance and involved the service requirements of 15
power plants across Belgium.
Before the WING project, Electrabel had an isolated
logistics department lacking recognition in the overall
strategic objectives of the company. The department had
limited integration with other related departments like
maintenance, purchasing and SAP master data management.
This transformation centred on a
project named WING, which focused
on warehouse, inventory, master data
management and maintenance and
involved the service requirements of
15 power plants across Belgium.
Moreover, the logistics function was organised in a
decentralised way, leading to inefficient and not-standardised
fulfilment and inventory management activities – each
production plant had its own local warehouse with its own
warehouse processes and inventory/master data
management. The result was poor service for the internal
client. Electrabel’s solution was to build a new central
warehouse for the whole of Belgium to hold fast moving
items. Somewhere in the order of 40,000 SKUs were
centralised, which represented 30 per cent of the total
number of SKUs in the local warehouses, but was responsible
for more than 80 per cent of logistics activities. The result was
a ten million euro reduction in inventory and a payback on
the project within 18 months.
The judges viewed Electrabel’s supply chain
transformation as a significant and successful redefining of
the company’s strategic focus to create a structure that
responds efficiently to the new service challenges of a fixed
contract operation. With this in mind, the decision was made
to give Electrabel the award for the Public Sector, Services &
Utilities category.
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