Learning from each other - a supply chain network based around a SME making sealants
These short video clips show the attitudes of the lead company and some of its suppliers to the operation of a supply chain network based around a sealant factory with about 100 employees. The network was faciltated by a small training and development company (a spin-off from a university). There have been many examples of supply chain networks being driven by large companies - the interesting thing about the lead company in this case is that it is itself an SME.
The supply chain network was facilitated by a consultancy, a partner in an EQUAL (ACORN) project. This consultancy had also introduced them to a supply chain simulation, FRIGERO, that had been developed by the Open University (another ACORN partner), to see if it could help the company and its workforce to develop. The simulation allows teams of people to make strategic decisions about the future of an ailing, and fictional, refrigerator manufacturer. They are then able to view the results of their decisions and analyse their choices (through, for example, fictional 'annual reports' which are simulated).
This clip provides some background to the Sealants company, which is a family-owned business, about thirty years old. They are the number one UK supplier of putty (it is primarily used to hold single glaze glass to the frame) and were originally almost completely focused on this market. However, the sons of the founder recognised that this was a mature and declining market and so developed new products to satisfy the putty substitution market. For example they now also supply Butyl Strip (most commonly used in wooden-framed double glazing) especially to the 'industrial leaf market' and Silicon products (most often used as trims for the edge of bathrooms and sinks). As a result, they are now a reasonably-sized and growing SME, employing around a hundred people and turning over circa ten million pounds.
This clip provides a little background to one of the suppliers to the sealants company and describes the relationship the two have. The supplier makes and prints plastic sealant cartridges for the sealant company. They make and print these cartridges for a few industries but mainly the sealant industry. They offer a range of cartridges all of which are made using the injection moulding process and are printed using hi-speed silk-screen printers. The supplier argues they have a good working relationship and that the lead company in the network are one of the best from their wide range of customers. This is because rather than just forcing an issue they are prepared to negotiate and work with the supplier on issues such as price reduction. The clip illustates the mutual learning that can occur through partnerships between companies in a supply chain network.
This clip describes the manufacturing processes of the Sealants company. The raw materials ('fillers') are mixed in batch filling vessels. The different products are then extruded and then; the butyl strip products are re-extruded onto siliconised paper; the putty is filled into its pots; and the silicon products are filled into their cartridges. These processes are both shown and described.
This clip describes how the Sealants company are going through transitional changes. They are a long established firm with long established working practices. Also they have workers who have been with the firm for twenty to thirty years and are set in their ways. However, they are now looking to change and move forward, and to re-train their staff. It is noted that this was a very similar situation to that faced by the simulated Frigero, and that subsequently there is a lot which they could learn from the simulation.
The value of supply chain networks to the sealants company and its suppliers
This clip describes the supply chain network of which the two companies are members, how it was set up and its value to all concerned. It began when the Sealants company went to a seminar about supply chain development hosted by the consultancy. It interested them and they asked the consultancy to come and get involved with their management to see if they could develop their supply chain. Subsequently, the consultancy arranged meetings with the company and their key suppliers. Their first objective was to impress the importance of the principles of empowerment, innovation and equal opportunities in order to create workplace cultures where all concerned could more forward. Practically, they had first to resolve some business issues. There is then an interview with someone from a supplier who describes his experiences of the network. He found the network interesting, enlightening, practically helpful and symbiotic. For example, the supplier helped the lead company change the way they delivered orders to the supplier, which in turn helped the supplier to respond more quickly to the Sealants company.
The value of supply chain networks to the sealants company and its suppliers - 2
This clip provides further evidence on the benefits of a supply chain network. The Sealants company opened up their filling/transportation line that involved the cartridges that supplier produced for the supplier to look at. Together they came up with a new and improved method of transporting the cartridges. Clearly, the Sealants company benefited from this but clip argues that so too did the supplier: they got to see the improvement as a result of innovation, co-operation and investment in new capital; an important lesson for the supplier to learn. They also both benefited from a consultation about the way the lead company placed orders with the supplier. The manufacturer was forever placing orders and then later on wanting to change that order. This meant that sometimes they did not get their desired order, or they got it but at a higher price: it was a source of inefficiency. Therefore, the supplier suggested they should always order capacity initially, and then from within that capacity order the specific products that they wanted at a later stage.
The supplier was able to offer this service because they mass produce the plastic tubes by injection moulding for all their customers; it only becomes specific batch production at the later printing stage. This meant the Sealants company now always get their desired order, and the supplier is not always under pressure having to try and rush to produce orders that have been changed at the last minute. Finally, the clip argues there are also more subtle benefits to the network: useful information can also be garnered informally. For example, at an informal roundtable discussion someone from the supplier heard that another company had powder delivered into their silos according to telemetrics. Now, the supplier had polymer delivered to silos. So, this prompted the supplier to ask if their polymer could be delivered according to telemetrics; it could. As a consequence they now do not have to worry about their polymer supply; it is instead dealt with by their own supplier using telemetrics: they deliver loads according to the monitored usage rate of the polymer. They also take into account their own transportation efficiency, so it is another symbiotic arrangement.
The supplier was able to offer this service because they mass produce the plastic tubes by injection moulding for all their customers; it only becomes specific batch production at the later printing stage. This meant the Sealants company now always get their desired order, and the supplier is not always under pressure having to try and rush to produce orders that have been changed at the last minute. Finally, the clip argues there are also more subtle benefits to the network: useful information can also be garnered informally. For example, at an informal roundtable discussion someone from the supplier heard that another company had powder delivered into their silos according to telemetrics. Now, the supplier had polymer delivered to silos. So, this prompted the supplier to ask if their polymer could be delivered according to telemetrics; it could. As a consequence they now do not have to worry about their polymer supply; it is instead dealt with by their own supplier using telemetrics: they deliver loads according to the monitored usage rate of the polymer. They also take into account their own transportation efficiency, so it is another symbiotic arrangement.