After a two-year break due to Covid-19, the Supply Chain Innovations event could finally resume and appeal to everyone in the sector. Solventure was also present on October 7th in Antwerp Expo, where our CEO Bram Desmet gave a keynote speech and our customers Indaver, Duvel Moortgat and Perfetti Van Melle shared their experiences.
Bram Desmet kicked off his keynote by explaining to the audience how to get from S&OP and IBP to a Strategy-Driven S&OP. “Supply Chain Management is strongly undervalued and often reduced to ‘logistics’, which causes the Supply Chain Manager to rarely have a seat at the Board today. Covid-19 has made it crystal clear that the Supply Chain is at the heart of business operations, and that the Supply Chain function can also be key for solutions to other hot topics such as sustainability and digitalization. Now is the time to make use of that gained momentum”, said Bram Desmet.
To have a louder voice within the company, the Supply Chain Manager should think more strategically. Solventure uses the framework of the Supply Chain Triangle to open up to this strategic thinking. The different corners of the triangle represent service, cost, and cash. Companies often struggle between improving service, minimizing costs, and reducing inventory. “Companies should make a clear choice between dominating the market with a focus on operational excellence on the one hand, or differentiating on the other hand, emphasizing customer service or product leadership. Based on that choice, the supply chain can be designed, as business and supply strategy should always go hand in hand. One business strategy is not better than the other, they are just different roads to create Return On Capital Employed (ROCE). When a company opts to be a differentiator, it will lead to more complexity and thus more inventory and a higher capital employed. That’s fine, as long as this is compensated with a higher margin too”, Bram explained during the conference.
Two decades ago, Duvel Moortgat decided to be a product leader by focusing on specialty beers. “We launch a lot of new products throughout the year and we apply intensive temperature monitoring in our production to slow down aging processes. This leads to high working capital, but it contributes to quality beer and the experience we want to bring. It’s a choice we make”, said Koen Van Der Taelen, Chief Supply Chain Officer at Duvel Moortgat.
In 2019 Indaver, a player in the sustainable waste management market, started its S&OP journey for its Industrial Waste Services. They focused on customer segmentation, demand & supply, and operational processes on a tactical level. “Due to changing customer demand and market environment, we shifted from being a product leader to focusing on customer intimacy. This led to a much more complex supply chain. With S&OP we managed to bring our supply chain back into balance. Today, as we are increasingly looking at it from a strategic perspective, Supply Chain is an executive function at the international management committee”, thus Annick Van Driessen, International Director Supply Chain at Indaver.
Willemien Broeders, Supply Chain Director at Perfetti Van Melle, ended the S&OP track with a nice bouncer and a nod to balance between service, cost, and cash: “Supply chain is like riding a bike, to keep your balance you need to be moving.”
Want to know more about balancing the Supply Chain Triangle?