Overview

The quality of our offerings will be the sum total of the excellence of each player on our supply team

Robert W. Galvin

Some time ago, Beta International began an intensive effort to review and improve supply chain performance. This effort addressed the entire supply chain from raw material to delivery of finished product to the customer, but particular attention was given to consolidation of the number of suppliers and getting better pricing from those suppliers, to improved production planning and inventory turns on finished product, and to a lesser extent, turns on stores/spares.

Beta's management had come to understand that good supply chain management required excellence in manufacturing. Plants had to be operated in a reliable, readily predictable manner to produce high-quality product that could be easily integrated into the supply chain and distribution strategy being developed. Plants that could not operate in this manner would make it extraordinarily difficult to meet the challenges of the global supply chain strategy being developed. Most of Beta International's manufacturing plant performance as measured by weekly production rates, uptime, unit costs, etc. were in need of substantial improvement. Some business units were even purchasing a considerable amount of product from competitors to make up for plant production shortfalls and meet contracted customer demand.

Further, as already noted, a benchmarking effort indicated that Beta's aggregate plant asset utilization rate was typically no better than the average range of 60 80%, as compared to a world-class level of 85 95%. On-time delivery performance for...