Why the interest in Lean?
Lean—often referred to as Lean Manufacturing—while applicable within the four walls of a plant, is also a powerful philosophy that can be applied across many other areas within an organization. General Cable has trained many associates in Lean and has successfully supplied them with the necessary toolset, which they apply across functions to develop and optimize a supply chain that is low-cost, flexible and customer-focused.
How did General Cable start its Lean journey, and what are some of the lessons learned?
General Cable’s journey began within manufacturing about a decade ago and continues still today. Our Lean and SixSigma strategies are most easily applied within a manufacturing operation, which helps us achieve manufacturing excellence. We have been able to dramatically improve the flow of product through our plants while reducing defects, scrap, working capital and inventories.
After a few years, however, we realized that to truly gain the greatest benefit from Lean, we needed to take a broader approach, looking outside of our plants and within our total organization as well as externally to our customers. If not, we would run the risk of becoming very good at what was important to us, but not at what may be important to our customers or supplier partners. Quality is an example of this. Early in our Lean journey, we measured internal defects. While we saw dramatic improvement in this area, we did not have the tools in place to view quality through the eyes of our customers. Therefore, we expanded our focus and began reviewing the things that were critical to our customers’ expectations.
What role do metrics play in optimizing a supply chain?
Our metrics are critical to our business success. There is a common misperception that you cannot measure functions other than manufacturing, such as sales, using the same metrics. I disagree with this perception because ultimately we work to make the best decisions for the overall company, our customers, our supplier partners and our shareholders. This is done best by looking at the broader implications of our decisions and aligning metrics to support this more holistic view. We encountered an example of this while focusing on reducing working capital and inventories within our plants. This was the initial metric and we were successful in achieving it. However, in some cases, we only moved our internal inefficiencies to our suppliers, forcing them to hold more inventory. At the end of the day, the total inventory in the supply chain actually increased, along with the cost of our total supply chain. Now, we are measuring total supply chain inventory with the intent that working capital, regardless of where it is in the supply chain, must be reduced.
What are the keys to success in applying Lean philosophies outside of manufacturing?
There needs to be a cultural change, specifically around the realization of doing what is best for the overall company, not for one functional area. We pulled together General Cable’s entire North American Sourcing & Supply Chain team in 2007 and introduced the concept of “Making the Right Move.” The right move was defined not by individual or functional metrics, but by doing what was in the best interest of General Cable.
Also, understanding the large opportunity to improve processes outside of manufacturing is critical. While Lean philosophies apply most easily within a plant where there is a lot of available data, and improvement results are very tangible and visibly seen, a lot of waste still exists in other processes. Any type of waste or sub optimization in these processes can add cost, inflexibility, and working capital to a supply chain, and Lean provides a perfect set of tools to eliminate these forms of waste.
What is Total Supply Chain Cost, and why is it applicable in today’s market?
The wire and cable industry is more competitive than ever. For us to succeed, we need to have a supply chain that is customer-focused, low-cost and flexible. By focusing only on one area of the chain, we are certain to miss a great deal of opportunity in becoming more competitive.
What is Sales & Operations Planning, and how does it help in reducing total supply chain costs?
Sales & Operations Planning (S&OP) is the monthly rhythm by which the leaders of each division come together and determine supply and demand – how much are we going to sell, how much are we going to manufacture, and what are the correct levels of inventory to target? From the supply chain’s perspective, this allows us to have a master operating plan. But S&OP is only one tool. We learned early on that we needed the right people to be successful. Without the right people within the Supply Chain organization, there is a tendency to focus only on the numbers, which potentially causes you to lose sight of the broader picture for decision-making. We have spent several years taking our organization to the next level, developing associates who are not only well-versed in the theory of supply and demand, but can also apply this learning within a broader business context.
What are your next steps to driving down total supply chain costs?
We need to become better at looking outside of General Cable, truly integrating key supplier partners and customers as part of our supply chain team. We recently brought together the supply chain and sourcing teams within North America under common leadership to help with this effort, and are already starting to capitalize on a great deal of opportunity to collaboratively work together, making changes that will reduce waste within our supply chain.
About Karl Zimmer
Karl Zimmer has been Vice President of Supply Chain & Sourcing, North America, for General Cable Corporation since October, 2009. He leads the N.A. Supply Chain team in planning and scheduling, inventory management, logistics, customer integration and purchasing for businesses with combined revenues of over $1.5 billion.
In his nine years with the company, he has held the positions of Vice President, Supply Chain; Plant Manager; Business Unit Manager; and Supply Chain Manager. Prior to General Cable, Zimmer worked for GE Aircraft Engines. He is active in the community as a member of the Board for the Dan Beard Council, Boy Scouts of America and the University of Cincinnati College of Engineering & Applied Science Dean’s Advisory Council.
Zimmer received a Bachelor’s degree in 1999 in Industrial Engineering from the University of Cincinnati.
About General Cable
General Cable (NYSE: BGC), a Fortune 500 company headquartered in Highland Heights, Kentucky, is a leader in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for the energy, industrial, specialty and communications markets. With annual revenues approaching $5 billion, General Cable has 44 manufacturing facilities in 22 countries and offers competitive strengths in such areas as breadth of product line, brand recognition, distribution and logistics, sales and service and operating efficiency.
Source: General Cable