Managing Automation - January 2008 - (Page 16) 01-08 DIALOGUE Progressive Manufacturing Roundtable It would be difficult to think of two manufacturing companies that are more different from one another than IBM Corp. and Sunsweet Growers Inc. A $91 billion high-tech manufacturing giant, IBM competes globally against some of the world’s largest technology providers. Sunsweet, on the other hand, is a $250 million maker of dried fruit products and often competes against small, regional, low-cost providers. Yet, the two companies do have some things in common. Over the past few years, both have made improving their supply chains cornerstones of their business strategies. And, for their efforts, both have INTERVIEWER been named Managing JEFF MOAD is executive editor of ManAutomation Progressive aging Automation. He covers enterprise Manufacturing award applications and manufacturing industry trends, and he has spearheaded the MA winners in the Supply awards process for the past two years. Network mastery category. IBM was the High PARTICIPANTS Achiever winner in the T IM CARROLL is vice president of category in 2006, and supply chain operations at IBM, a 2006 Sunsweet was a ProgresPM award winner. He oversees IBM’s sive Manufacturing 50 manufacturing, fulfillment, operations, and strategy. award winner in 2007. Recently, Managing HAROLD UPTON is vice president of Automation spoke with strategic business processes at Sunsweet Tim Carroll, vice presiGrowers Inc., a winner of Managing Audent of global supply chain tomation’s 2007 Progressive Manufacturing 50 award. operations at IBM, and Harold Upton, vice president of strategic business processes at Sunsweet, about how their companies plan to continue to gain competitive advantage by streamlining their supply chains. Q: Your companies have made significant improvements over the last couple of years in supply chain operations, both in reducing costs and satisfying customer demand. How much room is left for improvement? Are we just scratching the surface so far or have we substantially achieved what is out there to achieve? Carroll: I think that we recognize and understand in our environment that it’s never-ending. Extended Dialogue To listen to the full interview, and others in the Roundtable Series, visit www.ManagingAutomation .com/PMroundtable Cultivating Supply Chains Whether in high tech or high fiber, supply chain savvy boosts growth. Just ask Progressive Manufacturing award winners IBM and Sunsweet. There’s an end state that you desire to get to, but there are always improvements you need to make to get to that end state. We’ve been fortunate with the work that we’ve done on our own integrated supply chain since 2002; just take a look at the enormous results that we’ve had year-on-year. I’ll give you an example. Last year, we saved IBM over $6 billion in costs, improved payment terms by more than a day, and we’ve reduced our order-to-fulfillment cycle time by as much as six days to our clients. As we continue to drive for the process improvements by using lean, Six Sigma, etc., we continue to see this as evolutionary. Upton: I would agree with Tim. It’s a continuing effort. We have made tremendous strides and we’ve seen significant payoffs. The question is, how much further can you go for how much dollars? I don’t think that we’re looking at bringing back another big win [like] we did this last three or four years. But I also don’t think that if you look long term at today’s model that it’s going to be around forever. What I mean by that is I think consumer patterns are going to challenge our distribution models as we know them today. So, I think there is a lot of opportunity [for the whole supply chain model] to be reinvented. Q: Obviously, when it comes to demonstrating, both internally and externally, what you can achieve in terms of your supply chain performance, metrics are key. What do you feel should be measured and how are those metrics changing? Upton: We obviously measure lead time, cycle time, inventor y rates, customer fill rates, and those are pretty traditional. I think that you have to maintain focus on those, but that’s the infrastructure; I don’t think that’s the end result. One of the things we’ve done here in the last 12 to 14 months is we’ve actually taken our scorecards from our key customers and we’ve brought them in-house. We want to measure ourselves as our customer measures us, as well. That has Photos courtesy: Managing Automation, IBM, and Sunsweet 16 January 2008 http://www.managingautomation.com/PMroundtable http://www.managingautomation.com/PMroundtable
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