“The business control that the IBP program brings has had a huge positive impact on the credibility of the company.” —Christophe Aynes, President, Ono Packaging
Driving growth and customer service through supply chain transformation
French food tray company Ono Packaging works with some of France’s largest supermarket chains, including Carrefour, Intermarché, and Leclerc. After an LBO in 2006, the company wanted to be debt free in three to five years. The business strategy was to increase the value of the company through growth in the mature French, Portuguese, and Spanish markets, using existing capacity but with increased agility. At the same time, Ono planned to break into the emerging territories of North Africa (its Morocco plant was opened in early 2009), and to introduce new products, specifi cally in the growing market for modified atmosphere packaging (MAP).
This growth strategy required the company to take a new approach to driving supply chain effciency through improved forecasting and inventory reduction. One key objective was to maximize the company’s existing storage capacity and reduce logistics costs. The company was also seeking better ways to select and monitor the most appropriate contract carriers to work with, and to speed up new product introduction.
In October 2006, Ono engaged consulting firm Oliver Wight to implement an Integrated Business Planning (IBP) program to help it streamline its supply chain operations.
The improvements have been significant. Despite a 30% increase in business over the past two years, the company has been able to run increasingly smaller batches with shorter lead times, while inventory days have reduced from 40 to 27. Customer service has also improved, from lows of around 96% in 2006 to reach the consistent 99% required for Class A certification.
Improved co-operation between manufacturing and supply has seen sales forecast accuracy rise from 30% to 50% in two years, an increase of 66%. The company has also achieved cost savings of up to 20% in handling, warehousing, and freight. In manufacturing, accuracy is now consistently above 80%, compared with 30% to 40% three years ago.
In 2006, Ono was number four in the French market in terms of volume growth. By the end of 2009, it was number one. And by the end of 2010, the company expected to have only 20% of its original debt to repay to the banks—even allowing for investment for growth.
As Ono president Christophe Aynes puts it, “The business control that the IBP program brings has had a huge positive impact on the credibility of the company, not just with suppliers and customers, but also with the banks and shareholders.”