An ORMIT’er in the Supply Chain Jungle

After one and a half year of business analysing and diverse projects at the Logistics department of DuPont EMEA (Europe, Middle East, Africa), I’d like to take you on a swift ride throughout the supply chain “jungle”. Pardon my roughness; any resemblance to existing persons is purely coincidental.

On a safari in an industrial B2B company like DuPont you can encounter creatures of different human species. The researchers and developers are the company’s intellectual core asset. These are the people that you probably imagine wearing thick bowl bottom glasses on their noses, scratching their chin while masterminding the very next chemical Eureka.

At the opposite side of the value adding chain, you’ll find what is called business developers and sales people, who typically consume more hair gel than researchers and also dispose of more developed communicational skills. Their professional orgasm consists of closing deals with clients and identifying market leads that they can put through to the R&D department as an input to invent the next chemical breakthrough.

I must admit that I’ve never even met neither of both species in the flesh during my DuPont time, because I’ve only been active in the logistics department. The description of these people is therefore merely based on imagination, more than on their real physical appearance.

From my logistic point of view, I only have close interaction with the Supply Chain part of the DuPont business. In comparison to R&D and sales, this part is less visible to the outside world. It is often perceived as a mysterious black box. The goal of the Supply Chain is basically to keep the value adding operations up and running. This goes from raw material procurement and supplier relation management, to transport towards production plants, over warehouses and then throughout the distribution network.

The essential logistic services in this cycle are performed by “3d party logistic” (3PL) suppliers like carriers and warehouses. The logistic department is responsible for the cross-business procurement of logistic services (tenders, contract negotiation & buy), the contract administration of the 3PL’s (operational performance measurement) and the routing of transport requests of the business to the appropriate 3PL. Other important functions are customs management (clearance and duties) and transport security.

In the period that I’ve worked in this complex, data driven environment, I have learned that the key success factor is without any doubt efficiency. Supply chain management can contribute to the customer satisfaction and to the profit margin if it succeeds in either performing the logistic activities cheaper without infringing the service quality, or in increasing the service quality with the same use of resources.

KPI’s are expressed in terms of “On time and in full” delivery to customers, frequency of distribution incidents, operational savings, first pass yield and process effectiveness. In contrast with what you can suspect of some marketing strategies or corporate culture campaigns, “change” itself is never the objective. It is a reluctant phase to evolve to a more efficient process or to higher logistic service quality. Change is a costly and risky transition phase. All possible side effects need to be estimated upfront, because the impact of a production shut down or distribution congestion is way too critical to jeopardize.

To conclude this short introduction I would say that the Supply Chain jungle is an environment where measuring is pleasuring and where the survival of an Ormitter relies on good analytical and planning skills, a no-nonsense communication style and strong predilection for clean processes and operational efficiency.

Thomas Van Kerkhoven

Alumni at ORMIT

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