Top firms cast focused eye over supply chains

By ADAM GIFFORD

Some of New Zealand's largest companies are taking a fresh look at their supply chains with the help of Scor methodology developed by the international Supply Chain Council.

Scor, or Supply Chain Operations Reference, is a cross-industry standard that allows users to define a supply chain in common terms, said Mi Services Group consultant Owen Keates, the vice-chairman of the council's Australia and New Zealand chapter.

"It's a hierarchical system, so you can look from a top view and identify gaps according to the benchmarks," he said.

"It also references best practices, so once you've established there is a gap, you can look at what to do about it."

Because supply chains usually involved more than one company and often many countries and industries, having a common language to describe elements was a powerful tool.

"Firms are looking to reduce supply-chain costs and improve utilisation of assets. They want to be able to deliver to customers at a high level of service without having to carry a huge inventory," Mr Keates said.

"An emerging area is collaboration. The internet and e-enablement can make planning visible to customers and suppliers, with manufacturers looking for better forecasts and retailers wanting better information on the status of deliveries. The more information you have, the less inventory you need to carry to meet demand."

The Dairy Board joined the council before there was even a chapter here, after shopping around for ways to optimise its supply-chain model.

The board accounts for almost a third of this country's exports.

Board supply chain specialist Jose Guevara said it was using Escor, a simulation software that built on the Scor model.

"It means we can build a process using the standard Scor reference model, and then simulate that process using Escor to assess any risks in the supply chain, such as customer service or financial risks," Mr Guevara said.

The board tested the model at its Malaysian subsidiary, which takes bulk milk powder, adds ingredients and packs it in cans for the Southeast Asian market.

The recommendation from the pilot was for more raw material but less finished product to be held in Malaysia.

"That gives the plant more flexibility, because the raw material can be turned into other products if demand emerges," Mr Guevara said.

The board is now running the ruler over its New Zealand manufacturing plants.

Mr Keates said the local chapter had more than 45 members, including Goodman Fielder, BHP, Carter Holt Harvey and Fletchers.