Strategic Supply Chain Management - Supply Chain Online

OWENS CORNING PROFILE: Reorganizing for “a Bright Future” 135
used the Supply-Chain Operations Reference-model (SCOR) to create a
context for understanding the relationships among business strategy, supply
chain configuration, supply chain practices, and technology. It knew that
it needed to define the value proposition before it could get buy-in by all
stakeholders. “The transformation vision provided a common, overall roadmap,”
says Hatfield, “and provided an umbrella for enterprise-level improvement
projects.”
The supply chain organization identified four areas for immediate
improvement: fixing the end-to-end planning process within materials
management and instituting a sales and operations planning process in
every business, leveraging warehousing and transportation at an enterprise
rather than an individual business level, improving overall service performance
with customers, and building greater manufacturing effectiveness
and flexibility.
At the start, OC benchmarked its then-current performance levels
against similar manufacturing organizations in three areas: customer service
and responsiveness, cost performance, and asset performance. It set
priorities and targets for customer-facing processes such as on-time delivery
to request—a downstream result of greater alignment between demand
and supply planning processes. Increasing the effectiveness of its 10-step
sales and operations planning (S&OP) process also enabled OC to reduce
costs by operating in a more integrated way across global operations.
Early results have included lower inventory levels and higher inventory
quality, improved on-time delivery and order fill-rate performance,
and reduced logistics costs. OC estimates that it will generate more than
$165 million in value within the initial three years of the plan.
FROM PRODUCT TO MARKET FOCUS
Another goal was moving the organizational mind-set and execution capabilities
from a commodity-based product focus to a solutions-based market
focus, even though, as Meg Ressner confirms, OC has customers of both
types: “It’s true that our customer demands are evolving,” she says, “and
we must have the capability to deliver on all those demands, which means
you have to have a flexible platform.” To this end, account teams, transparent
to the customer regardless of their request for service, were organized
around specific high-value/high-volume partners. The intent is to
align the right set of people, skills, and processes around customers’
requirements. This might mean self-service for some customers, supported
by portal technology or electronic data interchange (EDI) transactions for