A supply chain revolution
Learn how Richard Bienfait, General de Division in the French armed forces, was able to revolutionize supply chain efforts with the help of EY.
With EY’s help, France’s defense ministry is making a concerted effort to improve its supply chains. What were the reasons for launching this assignment?
We have to go back to 2013. That was the moment when three phenomena occurred.
The first was the General Review of Public Policies. For the Ministry of Defense, this translated into a significant decrease in personnel of approximately 54,000 people. The second was the leveling off of the defense ministry’s budget. And the third was President Hollande’s decision to maintain all the capabilities of the armed forces.
What is different about this project?
I think we must look at the supply chain project not as a miracle solution, but as a change in approach from what we had been doing. Until now, we have moved from one reform to the next. Each time, we never even had the time to complete the previous reform before starting on the next one.
The supply chain project not only applies to physical logistics or transport. It involves strategic inventory planning, and the design and organization of processes, competencies and functions. Each part of the project is driven by an operational excellence approach that demands innovation and continuous improvement.
Indeed, this project is not another reform that will be completed. It is a program for continuous improvement. Once the movement has begun, it never stops. That’s why this is different from what we’ve done up to now.
What tangible results of the project can you identify today?
The first result I can name is designing a model in a year-and-a-half, which is pretty impressive.
Why is that?
Because the model simultaneously involves the armed forces and the directorates and departments. It’s like being confronted with eight large companies. We apply the same supply chain model to them, but not at the top – everyone has their own part of the supply chain. I wanted to focus on the results I had fixed, which was timeframes for filling orders.
We were taking about a month and I decided that the goal would be only four days. That is what I asked EY for. On the basis of this objective, EY provided me with solutions and we tested them to prove that it was possible.
The other significant result is in warehouse functioning. Our warehouses used to operate using fairly old methods. We observed that we were capable of having an order on the loading dock within a day, when it used to take seven days or more.
This raised awareness about excessive inventory. Every year we recommend a certain number of refills. We were spending our time renewing these excessive inventories, while it is better to consume them in an ongoing process. This inventory calculation approach is something that we had lost sight of and which is now being put back in place.
Valerie Laine is a partner at Ernst & Young Advisory, France, and a member of EY’s Global Defense Network.
For more information on defense and security issues please contact Bjorn Conway.
Click here to read the full article.