115 348
115
The Logistics function manages all the Group's intercompany
flows at the level of both annual budget and monthly opera-
tions, with the aim of satisfying demand in all markets that
do not have a local production source due to lack of capability
or production capacity. The Logistics function also manages
short and medium-term production allocations and planning
through Sales & Operations Planning (S&OP), a process
which serves as the link between the demand cycle (sales)
and the supply cycle (manufacturing and procurement). The
Group plans production according to whether a product is
classified as "engineer to order" (ETO), "assembly to order"
(ATO), "make to order" (MTO) or "make to stock" (MTS).
ETO: The ETO management model is mainly used in the
Energy Projects segment for Submarine, High Voltage and
Umbilical cables, businesses in which the Prysmian Group
supports its customers right from system design all the way
through to final cable laying.
ATO: The ATO approach allows a fast response to demand for
items that use standard components but differ only at the
final stages of production or packaging. This approach has
the dual objective of responding rapidly to market demand
while at the same time keeping inventories of finished goods
to a minimum.
MTO: Under the MTO approach, production is activated and
goods shipped only after receipt of a customer order, signifi-
cantly reducing unused inventory levels and the time that
raw materials and finished goods remain in stock.
MTS: In contrast, under the MTS approach, generally used for
more standardised products, inventory management focuses
on producing items for stock to allow a fast response to
demand. This model is mainly applied in the Energy Products
and Telecom operating segments.
In keeping with the Group's strategic objectives and as a
complement to the Customer Centricity and Factory Reli-
ability initiatives, Prysmian Group continued in 2014 with
the actions already undertaken in 2014 to improve logistics
services, in terms of lead-time flexibility, timeliness and
efficiency. New projects were also launched during the year
to strengthen the end-to-end processes with some Global
Key Accounts.
In terms of punctuality and reliability of its process, the
Prysmian Group confirmed its strong focus on continuous im-
provement. The On Time Delivery (OTD) statistics, measuring
the ability to serve the customer by the delivery date agreed
at the time of confirming order receipt, continued to improve
in 2014 in both the Energy Products and Telecom operating
segments, as shown in the following graphs.
LOGISTICS
In keeping with the Group's strategic objectives and as a complement to the Customer
Centricity and Factory Reliability initiatives, Prysmian Group continued in 2014 with the
actions already started in 2013 to improve logistics services, in terms of lead-time flexibility,
timeliness and efficiency.
ENERGY PRODUCTS
2012 2013 2014
100
90
80
70
60
50
40
30
20
10
0
90% 92% 94%
TELECOM
2012 2013 2014
100
90
80
70
60
50
40
30
20
10
0
85%
88%
91%
ON TIME DELIVERY
100
LOGISTICS