Imagine if you could achieve maximum scale, speed and agility in your biggest product line. Imagine if scale means you could save 30% in capital costs, speed means you could release production capacity for new products in a third of the time, and agility could significantly reduce manufacturing time but increase your range of packaging sizes.
Well, this is part of what SCM World community member Mondelēz International achieved through its supply chain transformation, discussed in a recently published webinar with Daniel Myers, EVP Integrated Supply Chain.
I love this initiative because it’s innovative: platforming goes beyond just product modularity and extends towards an end-to-end supply chain strategy. Key to its success is the creation of a cross-functional, integrated organisation and a clearly defined decision-making authority for standardisation. For example, decisions around global production equipment standards are owned jointly by manufacturing engineering and R&D, and those around the global menu card – which identifies standards for product formats, packaging and raw materials – are owned jointly by supply chain and R&D.
In order to lay out its transformational programme, Mondelēz joined forces with the University of Tennessee’s Haslam College of Business, which provides an excellent framework for platforming best practice in its report: “Platform Life Cycle Management”.Here, platforming is defined as the integrated system to develop and supply a family of products. It’s an end-to-end supply chain strategy that encompasses specifications of products, supply chain processes, manufacturing operations and a product’s end-of-life. Platforming therefore means simplifying and standardising all the elements of the product lifecycle to enable scale and deliver speed.
Platforming: many love it, but few have itSCM World community members love platforming: our survey on design for profitability last year found that more than 96% believe it’s important to them (see above). However, only 26% have platforming in place today. The other respondents said they’re working on it, planning to adopt it soon or can’t decide when they’ll start working on it – but they think they will.
Among the 26%, there are two other community members I’d like to mention for their hard work and amazing results in their platforming strategies.
Unilever is an excellent example of a company that embarked on a very successful product simplification programme, with platforming being the key to success. The company analysed product complexity through identifying what’s “good” and “bad”.
What they call “above-the-skin” (“good”) complexity is what delivers the diversity that’s visible to consumers, which the consumer is happy to pay for and ultimately can add value to the brand. “Below-the-skin” (“bad”) complexity is invisible to consumers and represents cost, so must be eliminated.
Below-the-skin design elements become standard platforms that are shared across different products and brands. This standardisation of materials, packaging and formulations led Unilever to reduce, for example, the number of soap fragrances it was using in its products from 80 to 11 and the number of toothpaste cap designs from 21 to 9. It achieved all of this without sacrificing any varieties in product that its customers like.
Mattel is another great example of a company that’s using platforming as part of an initiative called “design for automation”, which is about creating a tighter link between its manufacturing sources and its upstream product design department.
The company’s objective was to engage designers so that they could develop new products with a clearer upfront understanding of Mattel’s automation capabilities. To support this, Mattel set up a new organisation centred around “design for automation champion”. These individuals are the liaison between Mattel’s manufacturing sources and designers. They consistently communicate to the designers what automation technologies are available at the plants and create “automation toolkits”, which articulate the parameters that have to be taken into account when designing new toys.
The successes from Mondelēz, Unilever, Mattel and the framework offered by the University of Tennessee should ring a (big) bell for all those companies that say they like platforming but are still hanging around with incomplete implementation or, worse, can’t decide when they’ll start working on it.
End-to-end platforming isn’t an easy strategy to implement – that’s agreed. It requires a profound change in the organisation, in product structures and supply chain design. It requires the whole organisation to subscribe to it. However, the final results of scale, speed and agility are really worth the effort.
Just imagine if…