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LOGISTICS
Prysmian Group launched several projects in 2013, as complements to the Customer
Centricity and Factory Reliability initiatives, to improve logistics in terms of lead-time
flexibility, timeliness and efficiency, which have already produced tangible results.
The Logistics function manages all the Group’s intercompany
flows at the level of both annual budget and monthly
operations, 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
Submarine and High Voltage cables businesses, where the
Prysmian Group’s services start with system design and go 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,
significantly 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.
In keeping with the Group’s strategic objectives and as a
complement to the Customer Centricity and Factory Reliability
initiatives, Prysmian Group launched several projects in 2013
to improve logistics services, in terms of lead-time flexibility,
timeliness and efficiency, which produced tangible results in
several European countries as early as the second half of the
year: synergies between distribution networks, warehouses
and distribution centres, arising from the Draka acquisition,
the “Supply Chain Integration” project and the roll-out of
the “SAP Consolidation project” are just a few examples that
demonstrate the Group’s commitment to achieving more
efficient use of resources, greater sharing of information and
a significant reduction in market response times. In addition,
a specific project was completed in North America during 2013
aimed at reducing distribution costs and increasing the level
of service; a similar project was also launched in China.
The ongoing attention to flexibility of response to the ever
more challenging demands of the market has improved the
reliability of planning and the execution of manufacturing
output, in terms of both mix and volumes in ever faster
response times, as well as allowing stricter control of every
type of inventory: raw materials, intermediate products
and finished goods. This has allowed the Group to respond
efficiently and effectively to the general reduction in sales
volumes and accompanying decline in manufacturing output
by promptly adjusting inventory levels.
Lastly, all Group operating units have continued to focus,
in partnership with customers and suppliers, on actions to
recycle, recondition and reuse packaging in order to minimise
environmental impact.
