The client had a spend of 1,2 billion Euros for components and technical services for shipbuilding on some 40 production sites in 15 countries. During the last five years there was 15% annual growth of production on international level and combined with a new ERP-system. The majority of the production shifted in this expansion period towards Asia (mainly Vietnam). The supply chain didn’t follow this transition and remained focused on administrative fulfillment with the traditional EU-suppliers. As a consequence the transport times went up to 90 days and critical deliveries came regularly too late. This was very disturbing for the production in the Far East. The loss of productivity due to the remote supply chain could not be compensated with ‘low cost labor’.
Blue Chain kicked off with a core team to assess the challenges of present day and the future. A redesign of the current processes was initiated and executed. This ‘brown paper’ exercise ensured operational excellence. In this way the supply chain became a trustworthy internal partner for the organization and foreign production. The KPI driven processes gave focus to the organization. Together we aligned the suppliers. This dialogue required new competences within the structures of the new supply chain
The client bought several similar companies to have a larger market impact with an extended portfolio of technical solutions. The sales department had a traditional focus on service lines. To have more sales cost advantages the sales agents should be organized in regions and propose the whole range of services. The quotes of the client were more extensively with a higher pricing thus sales was confronted with the procurement department. This was a new kind of customer, and the sales agents had difficulty to understand their wishes.
Together with management, the philosophy of Blue Ocean Strategy was applied. The strategy was reviewed with the view point of the customer. Blue Chain, together with management and sales, assessed the portfolio of services and to structure them in more logical packets. New sales leaflets were developed to make a distinction between the characteristics and the benefits. Clients buy benefits. This enhanced the understanding of the unique selling proposition versus the competitors.
The service lines were trained with pitches and client presentations. The sales staff had a better connection with the procurement department of the customers. The success of quotes went up from 13% to 24% and the turnover increased with 16%. Blue Chain
The client had to invest in an upgrade of a production facility of 28mio€ within the premises of the factory and without disrupting the ongoing production. The old installation had to be removed, and new structural works were needed. Additionally the production method was a world class innovation, which needed R&D and constantfine-tuning during the investment process. As a result the final specifications were not fixed during the tenderprocesses. The budget for this investment was very restricted and at least 15% of the budget should be reserved for unforeseen work. The production should be up and running before the fixed legal deadline to be compliant with renewed REACH regulations. The project timing was key to avoid losing important customers. There was a large technical project team, but the client needed additional experience concerning a structured CAPEX procurement process.
Blue Chain organized the project team with clear roles and focus on the ‘fit for purpose’ of the investment. As a result we defined and executed clear processes, such as RFI, RFQ, selection and award criteria tool, negotiation and contract approach, decision criteria. In addition a CAPEX total cost of ownership-model was developed combined with target costing. This helped senior