How to organize a supply chain function to best practice?

Marina Bay Sands Hotel, Singapore

I spend last week with our operating company in South Asia. They run five factories in Singapore, Malaysia, Thailand and India and sell general building and technical insulation solutions all over the region.

Marina Bay Sands -
 insulated by ROCKWOOL products 

It was my first trip back to Singapore and Malaysia in 12 years. And as the economy growths with app. 6% per year, the economic wealth in the countries had doubled in the same period. The skyline is changed with many new high rises coming up. Marina Bay in Singapore is particular remarkable, and the city’s new land mark: Three high rises connected at 57^th floor with an infinity pool, bars and restaurants on top. 

Our good local management at one of
our production facilities in Asia

We recently hired a new supply chain director in South Asia with the responsibility to build up a new supply chain function. We spent the week on discussing how to organize the new supply chain function to best practice. We were completely aligned as to what processes that belong to a supply chain function. Supply chain should take end-to-end responsibility for the processes of sourcing the raw materials, planning the production, and delivering finished products to our end customers. Our vision for supply chain is to drive supply chain excellence end-to-end focusing on the “3C’s” - Customers, Costs and Capacity contributing to higher profitability of the Group

Before the new supply chain organization was put in place, customer service (order process handling) reported to sales, logistics (warehouse and transportation) were either reporting to sales or to production, procurement was reporting to the local factory manager, and planning were either reporting to sales or to production.

After the reorganization into one supply chain function, sales can now focus on nurturing and developing new customers, and then let customer service concentrate on the order handling processes itself. Previously, production planning focused on filling the production line and ensuring good production KPIs, now the new planning function can take a holistic view on balancing the sales forecast, capacity and inventory  both on a short term (0-12 week) basis and on a medium term (3-15 months) basis (Sales and Operations Planning (S&OP)). Managing the warehouse both in terms of manning efficiency and inventory accuracy are now organized under a local logistics manager. And finally procurement processes and policies are put in place to ensure that every dollar is spent professionally.