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Logistics & Manufacturing
Göran MathiassonGöran MathiassonExecutive Executive Vice PresidentVice PresidentAlfa Laval GroupAlfa Laval Group
© Alfa Laval Slide 3 www.alfalaval.com
Key figures
• Number of product groups 10
• Number of manufacturing units 20
• Number of distribution units 7
• Number of suppliers 3,000
• Number of people 3,950
© Alfa Laval Slide 4 www.alfalaval.com
Organized to meet market demands
Componentunit
Customer
Distributionunit
Supplier
Supplyunit
© Alfa Laval Slide 5 www.alfalaval.com
Business concept Equipment Business concept Equipment •• InnovationInnovation
•• CostCost--effectiveeffective
•• Customer relationCustomer relation•• Delivery performanceDelivery performance
•• Product qualityProduct qualityand performanceand performance
© Alfa Laval Slide 6 www.alfalaval.com
Alfa Laval’s Supply Chains
CustomerCustomerConfiguredConfiguredProductsProducts
PartPart NNumberedumberedProductsProducts
Customer EngineeredCustomer EngineeredSystems and Process Systems and Process
LinesLines
Customers
Customers
Customers
DistributionUnits
Systems Engineering &
Supply
Supplying Units
Make to stock
Make to order
Engineer to order
© Alfa Laval Slide 7 www.alfalaval.com
Balancing between parameters
Designing & Optimizing the Supply chains
Capital
Costs
Availability
© Alfa Laval Slide 8 www.alfalaval.com
Organized to meet market demands
Componentunit
Customer
Distributionunit
Supplier
Supplyunit
© Alfa Laval Slide 9 www.alfalaval.com
Genuine Genuine spare partsspare parts distributiondistribution
•• Spares 24Spares 24--48 hours48 hours•• Emergency delivery serviceEmergency delivery service
•• > 95% spares service level > 95% spares service level •• 24 hour Hot Line 24 hour Hot Line
© Alfa Laval Slide 10 www.alfalaval.com
Distribution Structure 2000
Distribution network
Sales CompanySales Company--inventories (~90 in all) Manufacturing inventories inventories (~90 in all) Manufacturing inventories Logistics inventoriesLogistics inventories
© Alfa Laval Slide 11 www.alfalaval.com
Distribution NetworkDistribution Structure 2004
EuropeEuropeAmericasAmericas AsiaAsia
© Alfa Laval Slide 12 www.alfalaval.com20,000 item no in stock75% delivered the same day as the order is received
400 orders per day1,500 orderlines per day
Distribution Center, Indianapolis
© Alfa Laval Slide 13 www.alfalaval.com
Product supply agreement
Follow UpCorrective
Actions
PC/DCEnd User
MarketRequirements
Product Supply
Product Supply Agreement
© Alfa Laval Slide 14 www.alfalaval.com
Weekly measurements
© Alfa Laval Slide 15 www.alfalaval.com
50
60
70
80
90
100
Lund
Lund
W27, 2004, 10 W27, 2004, 10 weeksweeks rollingrolling averageaverage = 93,8 = 93,8 -- YTD = 91,4YTD = 91,4
Delivery Accuracy LogisticsDelivery Accuracy LogisticsIndia
napo
lis
Indiana
polis
Shonon
Shonon
Lund
Lund
Kolding
Kolding
Indiana
polis
Indiana
polis
Shangh
ai
Shangh
aiTumba
TumbaIndia
napo
lis
Indiana
polis
Singapore
Singapore
PHEPHE BHEBHE PVFPVF SeparationSeparation
Indiana
polis
Indiana
polis
GoalGoal >95%>95%
68
© Alfa Laval Slide 16 www.alfalaval.com
Manufacturing Sites
© Alfa Laval Slide 17 www.alfalaval.com
Organized to meet market demands
Componentunit
Customer
Distributionunit
Supplier
Supplyunit
© Alfa Laval Slide 18 www.alfalaval.com
Organized to meet market demands
Componentunit
Customer
Distributionunit
Supplier
Supplyunit
© Alfa Laval Slide 19 www.alfalaval.com2,800 variants = high flexibilityDelivery time: Fast track 5 days. Normal 10-15 days60 orders per dayDelivery accuracy above 95%
Kolding, Denmark
© Alfa Laval Slide 20 www.alfalaval.com
How to increasecompetitiveness
© Alfa Laval Slide 21 www.alfalaval.com
Overall objective
Cost Availability
Customer valueCustomer value
© Alfa Laval Slide 22 www.alfalaval.com
World Class Journey
5S Six Sigma
Best in class
World class
Supply focus
Short term focus
Process stability
Breakthrough improvement
Operational excellence
Performance
1 2 3 4 5Development phase
© Alfa Laval Slide 23 www.alfalaval.com
Improvements
Cost/Availability
Time
Continuous improvements
Continuous improvements
Break through improvements
© Alfa Laval Slide 24 www.alfalaval.com
Supply chain
ForecastMarket requirement
Product rangeSales order process
Logistics processManufacturing process
Supplier process
© Alfa Laval Slide 25 www.alfalaval.com
Six Sigma
• A methodology and framework for eliminating “defects” in all business processes
• Alfa Laval logistics and manufacturing have decided to use the concept for continuous improvement and are in the rolling out phase
6σ
© Alfa Laval Slide 26 www.alfalaval.com
Summary
• Global presence
• Market-oriented and competitive structure
• Further development
