18 April 2016
A new initiative helps companies in the entire supply chain to cooperate and share knowledge in order to optimize the processes – with savings for both parties as one of the benefits. Interesting for the offshore industry.
Courage, faith and openness are key words if the companies in the supply chain want to optimise their cooperation and save costs as the companies do in the ‘Stram Kæden’ project initiated by Confederation of Danish Industry (DI). Donal Finn (photo), a consultant fra Valcon is one of the consultants involved in the project.
Many companies that go through tough times often deal with the challenges to themselves. One of the strategies to improve the annual accounts is to obtain better prices from the suppliers as these expenses often represent a great deal of the total costs. A new project for Danish companies challenges this business conduct.
The initiative is called ‘Stram kæden’ – which you can translate into ‘tighten the chain’. It urges and helps companies to reach out to their partners in the supply chain and share knowledge and expertise in order to come up with better and cheaper solutions and procedures. This way of acting benefits the parties involved as the savings that follow as a result of the new solutions are split between the companies. Example of improvements could be optimizing stock between the supplier and the customer, packaging and delivery time.
Until now 92 companies have been involved in ‘Stram kæden’ that was launched last year. The companies have planned 51 new initiatives together which are expected to result in savings for 4,4 mio. EUR. The initiative is conducted by Confederation of Danish Industry (DI) and the Danish Industry Foundation (Industriens Fond) with the objective to strengthen the competitiveness of the Danish industry.
A new way of communicating
The global supplier of elevator solutions KONE were among the first companies that participated in the project together with six other companies in their supply chain: MT Højgaard, Velux, Ramboll, Bygma, Lindpro and Spæncom.
The CEO Thomas Ohm states that one of the greatest advantages in working closely together with the other companies in the supply chain is the early involvement in the projects.
“The early involvement makes the process more smooth, safer and also cheaper since it brings down unexpected costs and non-productive time,” he states and adds:
“We experience that focus is mainly on the costs of construction. Entering into dialogue with the contractor and the other companies in the supply chain permits us to bring knowledge and experience into play in order to offer the best long-term solutions,” explains Thomas Ohm CEO at KONE in Denmark.
He also mentions improved communication with the developer, MT Højgaard after having participated in Stram kæden as a great advantage.
“MT Højgaard has learned more about our products and way of conducting our business and we have learned a lot about their business and their challenges,” the CEO adds.
An army of scientists
In order to get the most out of the potential the Stram kæden, the project has been conducted in close cooperation with the two consultant companies Valcon A/S and Implement Consulting Group P/S.
Donal Finn, a consultant fra Valcon is one of the consultants involved in the project. He mentions that the companies get a lot of tools to optimize their business but that is not necessarily enough to succeed.
“Through my work as a consultant I have experienced that when you want to improve the processes the biggest challenge is mindset and behavior in the company. When you ask people who is the most important person in the company, most will say the General Manager, but in fact the most important persons are the operators. They know their processes and know how to optimize them. It is important that they are seen as problem solvers – you could say as an army of scientists,” says Donal Finn.
Experience from the consultants involved in the project show that when using internal competencies right and with a close cooperation with the companies in the supply chain the productivity in a number of areas can increase by 10-20 %. Sometimes more.
“The principle where players in the supply chain work together is not new for Offshoreenergy.dk. In our Cost Reduction Forum for offshore wind we have gathered representatives from the whole value chain in order to find new ways to reduce costs. Meanwhile we will look into how offshore companies can also benefit from the methods and experiences from ‘Stram Kæden’ in the future,” says CEO Glenda Napier from Offshoreenergy.dk and adds:
“The role of a cluster organisation such as Offshoreenergy.dk is to facilitate strategic partnerships that strengthen innovation in our member companies – this implies helping them tightening the supply chain. To do that it is important that the companies open up in order to find places where innovation can enhance their business.”
Companies that participate in the project ‘Stram kæden’ go through a process with the other companies in the supply chain that make them focus on improving procedures within five areas: Productivity, quality, products, logistics and capital.
You can read more about the project (in Danish) and also download tool that you can use to make a similar process: www.stramkaeden.dk
Sign up for the conference 1 June 2016 in Copenhagen where you can hear more about the project.