A global overview

Global Grundfos strategy yields clear results

Article from Børsen Online, 14 November 2012

Grundfos is ready for rolling out their global supply chain in the entire company after successful tests in the industry segment.

Global Grundfos strategy yields clear results

Article from Børsen Online, 14 November 2012
By Mads Gravesen, Børsen

Global Grundfos strategy yields clear results

”We have turned the concept completely around. Previously, when we established new Grundfos plants around the world, it was the responsibility of each individual plant to ensure sufficient capacity for servicing that market”, says Ebbe Gubi, director of demand supply integration at Grundfos.

However, with 60 different sales companies, we needed a new strategy, ”one set of numbers”, which completely turns around things. The strategy, which has been developed in cooperation with management consultants from Implement Consulting Group, has been tested for about a year in one of the two major business areas, the industry segment.

Global overview

”Now, we make a complete, global overview of what we are to deliver in the individual markets”.

A central coordination is performed where we establish bottlenecks and look into how the plants most optimally can supply each other. We shift from decentralised planning to centralised planning”, Ebbe Gubi explains. The global overview enables Grundfos to identify exactly where idle capacity exists and how capacity can be moved around to utilise it in the most optimal manner.

”We have the same capacity as before, but we have gained increased flexibility”, says Ebbe Gubi. ”The positive results are unmistakeable. Our deliveries have become more stable, the average time of delivery in Europe has been reduced from 17 to12 days, and we have reduced the component stocks by 20% by eliminating redundant stocks. And the stocks can be further reduced when the strategy is rolled out in the entire company”, Ebbe Gubi states.

”Go” from top management

Grundfos operates with 25 plants from China over Europe to the USA, and some of them serve all the world. Previously, it was the responsibility of each individual plant to ensure that they were able to deliver according to incoming orders within ”the tactical horizon” of 1 to 18 months.

Each week, all local plans are now joined together in three regional plans that again are made into one global plan which serves as the basis for production decisions. This has improved risk management significantly.

”Now, we agree that it works, and top management has given their ”go” for rollout to all of Grundfos”, says Ebbe Gubi. ”We roll out to what we are probably most known for, the red circulator pumps, and to everything else we do. Since our organisation is widely ramified, we did not dare to do it all in one go”.

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