Logistics

What we did for Boeing

We were initially engaged by Boeing to provide specialist logistics modelling support for the optimum selection of aircraft spares provisioning and repair pipeline analysis. These activities were conducted using a number of disjointed user-developed applications that required onerous and continuous manual manipulation of data. During the initial consulting work a strong relationship with Boeing developed which resulted in Boeing engaging us to:

• Investigate options for business improvement
• Develop business requirements for an Integrated Logistics Data System
• Investigate solution options
• Develop a custom AEW&C Logistics Data System
• Implement and support the production system
• Train Boeing personnel on system usage

The results

Through the development of the AEW&C Logistics Data System, Boeing Australia now supports the procurement of the Royal Australian Air Force Wedgetail AEW&C aircraft and the procurement of the Turkish Air Force AEW&C using a single integrated logistics data system. Our solution is a web-based application with a robust security framework with all AEW&C Programs supported by a central system located in Brisbane.

Inventory Management

Inventory Management

 Background

Our client, in response to Defence's 5% sustainment expenditure cuts, has targeted savings of $6.25m in FY 08/09. GRA has been engaged to help our client deliver $6.25m savings.

As our client has been consistently over achieving its service level targets for consumable inventory by 3% – 5%, one initiative that GRA has investigated was an analysis of the financial benefit for a small reduction in the target service level in the client requirements determination tool.

Challenge

GRA analysed the size of the expenditure reduction if our client planned its stocking policy based on a reduction in the consumable inventory target service level from 95% to 93%.

Approach

GRA performed a Baseline Cost Analysis before adjusting the target service level down from 95% to 93%

• establishment of a simulation environment and capture of the baseline projected purchase plan (AS-IS)
• adjustment of target service level down from 95% to 93% (i.e. a reduction of 2%)
• run our optimization engine and capture of the simulated projected purchase plan
• comparison of the simulated and the baseline projected purchase plans and impact on each department

Outcome

The new total purchase recommendations represent $32.24m, with a total potential saving of $0.71m. 2% reduction of the target service level generates 2.2% reduction of the purchase order plan for the next 12 months.

Moreover, each major inventory segment was impacted at a different degree, from 2.1% purchase order reduction to 5.6% purchase order reduction.

Supply Chain Cost Reduction

Reducing supply chain costs

Background

Dairy Farmers is a large milk processing business with strong elements of high customer service requirements. They were faced with inconsistencies across their planning process which resulted in missed/delayed orders, lengthy lead times, failure to meet the production schedule, inability to establish the right buffer stock and lack of control and discipline along the supply chain. All of these issues contributed to uncertainty along the supply chain and to poor customer service.

Dairy Farmers had also made commitment to major trading partners that variations in product supply would be corrected. 

SMT was appointed to evaluate the existing planning and forecasting functions of the business and implement appropriate measures to ensure improvements where obtained. Specifically, to design, develop and deliver marketing, sales, production and logistics forecasting and planning process. In addition to deliver increased customer service and decrease the number of out-of-stocks.

The Solution

After an extensive review of the functions, SMT recommended and implemented several key reforms, which delivered supply chain cost reductions, performance improvements and achieve greater revenues. To accomplish this, SMT developed:

• A demand forecast for products and groups;
• A supply forecast for milk;
• Capacity planning model which linked demand to supply through production capacity;
• Key performance indicators for the planning and forecasting processes;
• Education and training material to support the new and optimised processes;
• A supply chain management process based on one reliable set of data from a streamlined information flow;
• Appropriate policies and procedures; and
• A process whereby sales, operations and logistics worked in unison to achieve the best results.

Culture, Politics, Change management

SMT were required to manage the communication changes between all stakeholders. As a result, the employees supported and implemented the objectives, changes and new KPI’s

SMT’s skills in change management where critical to the on- going success of this project.

The Achievement

As a result, Dairy Farmers achieved forecast accuracy and schedule adherence, with fast and effective communication channels throughout the S&OP process. Monthly volumes were delivered against orders consistently.

Dairy Farmers were able to achieve customer expectations and increase satisfaction throughout the supply chain, whilst lowering costs and delivering more product. 

 Dairy Farmers now boasts:

• Increased throughput by 9% Additional $7 Million of revenue per year;
• 97% customer service level;
• Improved product availability with reduced levels of inventory;
• Improved supply flexibility Standardised processes.