Toll Today March 2011 - TOLL Group

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Specialised and Domestic Freight Toll Inventory Capital Solutions Impresses Caterpillar 10 TOLL INvENTOry CAPITAL SOLuTIONS IS A SPECiaLiSED BuSINESS uNIT THAT HAS DEVELoPED AND SuPPoRTS A FuLL FuNCTION INvENTOry AND DISTrIBuTION MANAGEMENT SySTEM. THE METHODOLOGy CAN BE uSED By BuSINESSES INSIDE TOLL AND FOr CuSTOMErS OF THE TOLL GrOuP. The inventory management system is based on risk management principles and is used for optimising all classes of stock from raw materials through to work-in-progress and finished goods. Where needed, it includes demand forecasting, master production scheduling and stock replenishment / procurement. The Toll Inventory Capital Solutions system interfaces with customer Enterprise Resource Planning systems and the relevant Toll operations systems. The outcomes are usually improved product availability, improved stockturns and lowered operating costs. Over the past 13 years, Toll Inventory Capital Solutions has worked with a number of companies to improve their inventory management, and has recently been working closely with Caterpillar internationally on a number of exciting projects. ToLL inVEnToRy CaPiTaL SoLuTionS anD CaTERPiLLaR In 2005 the multinational equipment manufacturer, Caterpillar, acquired a stake in a leading Chinese earthmoving machine manufacturer Shandong SEM Machinery Co Ltd (SEM). Based in Qingzhou, China the company had previously been a hundred percent Chinese owned and had developed their own operating systems over many years. When Caterpillar took over the company they realised that some of these systems were effective, but there was also some room for improvement. Supply chain planning and execution, with emphasis on demand forecasting and inventory management was one of the disciplines that was lagging behind the current state-of-the-art products this function produced. In early 2007, Toll Inventory Capital Solutions was invited to present its ideas to Caterpillar’s management in Singapore. The team quickly realised that it could potentially offer them a very good solution for their newly acquired operation by improving their inventory and distribution planning, as well as the associated logistics services of warehousing and transport. The outcome of this meeting and the ensuing discussions was that we were introduced to the Caterpillar China management in Beijing and then to the SEM management in Qingzhou to further discuss opportunities. As this was a new market for Toll Inventory Capital Solutions, we invited management from Toll Global Logistics to accompany us to demonstrate Toll’s understanding and presence in the Chinese market. THE PRoPoSED SoLuTionS Working with Toll Global Logistics in China, we developed a solution that was well received by Caterpillar and the SEM management. The solution focussed on firstly getting a proper planning methodology and system in place for the SEM supply chain management. Secondly, we proposed to take over the warehousing and transport services for SEM by using the existing Toll Global Logistics infrastructure in China. In particular we explored the options of increasing the SEM footprint in China by using the regional Toll warehouses to increase the number of stocking locations for SEM in China. This could speed up delivery time to SEM customers and prevent some lost sales for the business. Clearly this posed an exciting opportunity for the team. We presented various prototyped and modelled solutions to SEM management. These models and findings, together with a supporting business case were presented to the SEM and Caterpillar management and they agreed to start by implementing the inventory solution. They will then look at the option of using the Toll warehousing network further down the line. After four months, the new inventory management system was implemented and launched.
150 135 120 105 90 75 60 45 30 15 0 24-Mar-08 24-Apr-08 Start install System and Processes 24-May-08 24-Jun-08 24-Jul-08 24-Aug-08 TRaininG THE TEaM in CHina Although the system implementation went as smoothly as we could have expected, the methodology implementation posed a further challenge – language. The ICS methodology involved process re-engineering, formal training and on-the-job coaching. However, the trainees all spoke Mandarin and the trainer spoke English. We were ready and able to overcome the language barrier, working closely with our colleagues in SEM to ensure our training was delivered and fully understood. Some three weeks later we handed over the ICS system. By now the system was live and our role was to process re-engineer, coach and monitor the team. Good results had to be obtained at SEM. Our trainees performed remarkably well and favourable results soon followed. The graph above shows the stock cover and service results achieved. We were delighted, as were our customers, the Caterpillar and SEM teams. oVERaLL inVEnToRy PERFoRManCE – EnD DECEMBER 2010 Service Stock 24-Sep-08 24-Oct-08 24-Nov-08 24-Dec-08 24-Jan-09 24-Feb-09 24-Mar-09 24-Apr-09 24-May-09 24-Jun-09 24-Jul-09 24-Aug-09 Cover Availability 24-Sep-09 24-Oct-09 24-Nov-09 24-Dec-09 24-Jan-10 24-Feb-10 24-Mar-10 24-Apr-10 24-May-10 ToLL oPPoRTuniTiES aT SEM In December 2010 Toll increased its scope of services at SEM when Toll Auto assumed control of the Beijing warehousing function. This is the first of what could be an initial total of nine warehousing projects in China for SEM. In addition to warehousing services, there is also an opportunity for Toll to assume accountability for all transport and local delivery services for SEM in China. Finally, SEM has enquired about our international services encompassing forwarding and clearing as well as logistics services generally in their export markets. Opportunities exist here for Toll Global Forwarding and Toll Global Logistics. ToLL oPPoRTuniTiES wiTHin CaTERPiLLaR GLoBaLLy Thanks to the excellent results at SEM, of which Caterpillar management in Beijing, Singapore and Peoria (US Head Office) has full visibility, Toll Inventory Capital Solutions has been invited to develop new solutions for additional Caterpillar divisions. Notable among these are Caterpillar Remanufacturing (US), Caterpillar dealers (Asia) and the new Caterpillar joint venture truck business (China). This work is now underway and we are exposing Caterpillar and the Caterpillar dealer management to Toll services globally. Working together as One Toll on this project has opened up the whole of the organisation to Caterpillar, helping them to appreciate how other parts of the Toll business can benefit their organisation. As such, new opportunities for Toll are likely to follow. n Specialised and Domestic Freight End 24-Jun-10 24-Jul-10 24-Aug-10 24-Sep-10 24-Oct-10 24-Nov-10 24-Dec-10 24-Jan-11 100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 Toll Today March – May 2011 11
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Page 43 and 44: Staff Milestones CLUB 10 Adrian Mic

Toll Today March 2011 - TOLL Group

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