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THE VISION THING
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In order to ensure that it could respond more flexibly to customer demand, OC conducted an end-to-end supply chain assessment using PRTM s stages of process maturity model for supply chain excellence as a reference point (see 6 and Appendix B). OC found that it was at early stage 2 of functional excellence in process maturity yet aspired to achieve solid stage 3 status, designated enterprise integration. The company
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OWENS CORNING PROFILE: Reorganizing for a Bright Future
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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.
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FROM PRODUCT TO MARKET FOCUS
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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
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Strategic Supply Chain Management
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order management and fulfillment. It might mean a dedicated customer account team for other customers. As Ressner notes, even though OC is exploring use of the Internet for ordering and other customer-facing activities, the company also realizes that many of its major distributors and retailers have an emotional comfort level with their customer service representatives from OC. The challenges are manifold. Customers want more customized service and more flexibility. They want tailored solutions that take cost out of their supply chains. Many customers want us to be their partner where we leverage the full resources of OC to help their business grow, says Hatfield. In customer alliances, this means that OC needs to become more integrated into its customers supply chains to understand what its customers are demanding and to create the processes that will ensure that demand is filled on time every time.
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THE MECHANICS OF TRANSFORMATION
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A key challenge of putting supply chain issues on everyone s radar screen was to redefine and educate employees on what the integrated supply chain meant for OC down to how each employee s role and responsibility fit into the supply chain. Says Hatfield, We embarked on a whole educational process. One of the most effective things we did, as simple as it sounds, was to hire a design firm to draw an illustration of all the highlevel supply chain processes at OC. When they were finished, it was clear that the supply chain is centered on our customers and really encompasses almost everything that we do. Everyone has a role, and the key to success is integration. The supply chain organization realized that it would take three components to effect the transformational change it was aiming for: the people component, the process component, and the technology component. The people component would require education about the value of the supply chain to create fully engaged employees those who would be trained and certified to execute processes with a high level of accountability for performance. A process architecture would have to be created with the unified goal of providing exceptional customer experiences. And last, the technology would have to be fit for purpose : the enablement of higher levels of performance through greater visibility of information at all levels of management. Once viewed as the primary driver of business processes, technology was now seen as an enabler of larger, more strategic goals. Evidence of this shift is apparent in the type of employee hired for the information sys-
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