Supply chain excellence from Henry Schein

Achieving this has much to do with effective communication, both with supply chain partners and internally, as I discovered on a visit to the company’s distribution centre in Gillingham.

Henry Schein UK purchasing director Samantha Roper says it is important for all parties in the supply chain to see things from the perspective of others down- or upstream from them.

Henry Schein initiated a programme to work closer with suppliers to understand their supply chain. A team featuring individuals from different departments within Henry Schein met with suppliers, worked with them and fed information back to improve operations.

"We have seen efficiencies,” explains Samantha. "What is especially gratifying is that suppliers are now sending their operations people across to us. We have had five different key suppliers bring a senior supply chain person across from Europe to see what their goods look like when they arrive in our receiving area.”

"One example of the kind of issue that can be ironed out was with one of our key supplier partners. We had switched to buying by case size, but despite repeated requests we weren’t getting what we expected. This was because we were talking to a customer services team. The moment we brought an operations director across, he knew exactly what we meant and wanted. It changed the relationship.”

Working with  this supplier used to require a dedicated person in the receiving area to take care of deliveries. Now, thanks to better communication with the supplier, it can be handled by any member of the Henry Schein team, so it is a much easier process. Better communication resulted in nuts and bolts changes on the ground to make goods receiving smoother - how paperwork was dealt with, how pallets were layered, how pallets were strapped and marked up - all were improved.

The continual process review is not just focused on supplier relationships. Henry Schein also focuses on internal communication.

Managing Director of Dental UK Simon Gambold explains: "We’ve set up process improvement teams to bring people from different functions together. We tend to pick the potential high performers, highly motivated ideas people, with a facilitator to chair the meeting. Then we send them off to look at a certain process. It’s really great because they step up, come up with ideas and implement solutions, and we’ve done that across the business.”

 

 

A similar idea was the Nova initiative, which brought together a team from across the whole business to look at Henry Schein from the customer’s view point from initial view of products to payment. Each department was represented and the initiative mapped touch points with the customer. The programme had two objectives - to improve process efficiency and improve customer experience.

"As a result of this, we realised our teams at times were working in parallel, but not as coordinated as they could have been,” says Simon. "We had started introducing automated order acknowledgment and shipping confirmations etc, but Nova showed us that the management team on its own was not able to implement the change we wanted.” 

"The Nova team was able to look across the piece and say ‘this department is moving forward smartly and this one is not as aligned’, and was able to marshall the IT resources to get all parts of the business moving forward.”

The Nova initiative led to numerous spin-off projects and led to the creation of a role to support managers who are dealing with change in their department.

Simon adds: "We coached the Nova team very carefully and the project helped to identify the key skills we need in our managers - the ability to overcome obstacles, to work collaboratively, to work across boundaries.”

Samantha Roper says the inventory and supply chain team has learned increasingly to understand the different business strategies.

"We want to see the immediate and long term plans of each of our sales and marketing teams, what their promotional activity is, when they are bringing on new customers and introducing new products. All of this information helps us improve demand forecasting and customer satisfaction,” she explains.

 

"The buyers add intelligence of what’s going on in the market. They give us advance information, so we can assess projected demand against current demand, to see if we have any supply chain risks. This is particularly important for our corporate high-budget accounts and for product ranges with long lead times, for example, if they are sourced from the Far East.”

The inventory team has tools to help forecast accuracy, but fundamentally the relationship with marketeers and suppliers is key, adds Samantha.

"We stay close to suppliers to try to predict product lifecycle. It can be difficult. As new products are introduced, they don’t typically replace older products instantly, there is a phasing out process and again communication is the key in trying to gauge how this process will play out so we can plan for it.”

 

Henry Schein has a global plan to further upgrade its infrastructure and is in the middle of its UK projects. The company feels that if it is to deliver added value to customers, it must get the infrastructure right.

The company’s DC in Dumfries, which focuses on its animal health business, has been upgraded with automated conveying and sortation equipment and the firm has turned its attention to its holdings in the South East of England, which focuses on the medical and dental businesses in the UK.

Peter Dodd, head of supply chain operations at the Gillingham DC, says the company has a site close to its current facility in Gillingham and plans to use the new location to consolidate its presence in the South East.

"We are moving quickly, but at a pace aligned with our suppliers’ and customers’ demand and working through planning approval [at the time of writing]. It is going well and we will discuss appointing a contractor soon. We have a relatively aggressive timetable for completion in mid-2014,” says Peter.

Henry Schein plans to build a DC that is similar to the Dumfries facility, which will involve taking the opportunity to install automated conveyor systems in the premises.

"We can see advantages in this technology in terms of better serving the customer,” says Peter. "We are also looking at voice picking as part of the new set up. We may trial this at our current facility before we move. We have trialled voice picking in Dumfries, both for Dumfries and here. If it will maximise our pick operations, it will be a big advantage.”

"It is very sensible to make sure we are investing in the best technology. We have different needs in this DC so we will take a slightly different approach to the one that has served us well in Dumfries,” concluded Peter.