Managing Automation - September 2008 - (Page 34)

SPECIAL REPORT HIGH ACHIEVER: SUPPLY NETWORK MASTERY INTERTAPE POLYMER GROUP Specialty packaging company uses technology to overcome supply chain inefficiencies and customer service problems. BY DIANE HIMES I n 2005, Bradenton, FL-based Intertape Polymer Group found itself struggling with an unwieldy supply chain, poor internal communication, and flagging customer service levels. Having experienced a rapid growth spurt as a result of several acquisitions, the specialty packaging products manu- facturer ended up with overlapping product portfolios, including several unprofitable items that created revenue losses and excess inventory. Meanwhile, IPG was facing increasing competitive pressure coupled with rising raw materials costs and fuel prices. “We’re the second-largest manufacturer of tapes and films in the U.S.,” says Joe Intertape Polymer Tocci, IPG’s vice presiRevenue: $800 million dent in charge of supLocation: Bradenton, FL ply chain. “Behind us, there are four or five Industry: Specialized plastic and paper-based packaging products and systems others always nipping at our heels.” Project name: IPG’s Supply Chain Grows Up In this environment Project leader: Joe Tocci, vice president, supply chain where vendors don’t Core technology: Logility Voyager Solutions compete primarily on ROI/Business benefit: Improved fill rates to 95% from less than price, Tocci says, serv70%; increased forecast accuracy to 86% from 56%; and achieved a ice is what distin$40 million year-over-year reduction in total corporate inventory guishes one company from another. “If we’re JOE TOCCI Vice President, Supply Chain not able to offer worldclass ser vice, we’re out of the ball game.” In order to address the company’s urgent customer ser vice issues and meet its specific supply chain planning goals — including rationalizing the various product portfolios, increasing visibility into customer demand, establishing clear process ownership, and connecting its sales plan to the production schedule — IPG in 2006 began implementing Logility’s Voy- ager supply chain planning modules. IPG started with Logility Voyager Solutions for Demand Planning, which enabled the company to create multiechelon forecasts and scenario-based planning according to product group, sales channels, geography, or financial metrics, Tocci says. As a result, forecast accuracy rose to 86% from 56%. Later in 2006, IPG implemented the Logility Voyager Inventor y Planning module, seeking a better way to use working capital. With that module, IPG was able to leverage time-phased inventory policies that align business seasonality with corresponding customer service goals. Customer service levels increased by 20%, Tocci says, while inventor y dropped to $85 million from $125 million. At its regional distribution center (RDC), IPG used the Logility Replenishment Planning module to more efficiently move inventory from plants to distribution centers to ensure that it was in place in time to fulfill customer shipments. The result was a $13 million year-over-year reduction in RDC inventory while fill rates increased to 95% from 70%. “Typically, when you reduce inventory fill rates, your customer service comes down,” says Larry Lapide, director of demand management at MIT’s Center for Transportation & Logistics and a judge in this year’s Managing Automation Progressive Manufacturing awards program, in which IPG received the High Achiever award for Supply Network Mastery. “But the fact that IPG was able to increase customer service while improving fill rates to 95% is quite an achievement.” The fact that IPG is a mid-sized company greatly enhances the significance of its operational improvements, Lapide adds. IPG’s supply chain efficiency project “is a good example of how an SMB can use technology to increase performance, both from a customer-facing perspective as well as internally,” he says. ma September 34 2008

Table of Contents Feed for the Digital Edition of Managing Automation - September 2008

Managing Automation - September 2008 Contents Take 1 Letters Tech Vendors Defy Economic Slump by Plugging into Developing World Growth New E2open Chief Outlines Plan to Accelerate Growth Is This Marketing as It Used to Be or Something New? The OMAC Group Attempts to Widen Its Influence Automation Federation Names Chief, Plots Growth Notes Cover story: The Innovation Gap Special Report: Meet the Progressive Manufacturing High Achievers Progressive Manufacturer of the Year Business Model Mastery Innovation Mastery Customer Mastery Supply Network Mastery Data & Integration Mastery Education & Training Mastery Leadership Mastery Operational Excellence Mastery Special Report: Catching the Wireless Wave Part 1: No Clear Infrastructure Winner Part 2: Wireless Apps Take Wing Part 3: The Human Side of Wireless Product Scan Advertiser Index Next

Managing Automation - September 2008

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