2. Subjects
Company profile
Products
Market coverage
Clients
Definition of the customer
Performance objectives
Operations strategy
Risk management
3. Company Profile
• Founded in 1903, merged in 1929
• $7 billion in net sales in 2013
• 77 plants in 21 countries
• 22,500-plus employees worldwide
• 1,900-plus worldwide patents
• 49,000-plus customers in 86 countries
• 10,000-plus product offerings
• 600-plus new product solutions launched each year
• More post-consumer glass - 4.5 million tons - used than any other glass-container
maker
5. Market coverage
Mature markets Emerging markets
#1 position in Europe #1 positions in Brazil and Andean region
#1 position in North America Leading position within SE Asia
#1 position in Australia and New Zealand Foothold in China and Argentina
7. Definition of the customer
• Consumer – the person who uses the bottles to
consume liquids or other contents.
• Client – retailer or corporation e.g. holder of the brand
name who orders the company to produce containers.
9. Quality
Consumer Client
Look and feel of the
bottles
The organisation supports the client in the
creation process and after sale
Material is connected to
brand/image
The producer can guaranty the satisfaction of
the client
Packaging adds to the
experience ( containers
are light/heavy, big/small)
Pleasant people to work with. Soft/relationship
skills e.g. communication skill.
Durability of the container Quality is connected to dependability, speed
and flexibility
Safety of the material Cooperation with the producer has a positive
influence on the clients image.
KPI
Number of re-
designs
Time the
designers take for
the creation of
new bottle.
Number of
complaints
Time to establish
a relationship and
sign a contract
10. Speed
Consumer Client
How fast can a container be opened
and its contents consumed
Lead time
Negotiation speed
Container prototype creation speed
Time to market
How fast is the customer service
KPI
Sourcing speed
Design to
prototype to mold
Machinery setup
Process speed
Transportation
Time to handle a
complaint
11. Flexibility
Consumer Client
Reusability of the container The producer can make different kind of
containers in different colours, shapes
and forms.
Can the container be used for
other purposes?
The producer can adjust the quantity of
produced containers to his own liking
The producer can switch between
different kind of container molds and
they can adjust their production line
Flexibility in contract and agreements
Flexibility in price, if quantity changes
KPI
Number of new
designs
Product line setup
time
Total production
capacity
Nullified contracts
Pricing standards
12. Dependability
Consumer Client
Client is sure of the fact that the
producer will fulfil the promised
service in time and deliver the
agreed quantity of containers, which
match the agreed quality.
KPI
Requested VS
Delivered orders
Failure rate of
machines
Waiting time in
processes
13. Cost
Consumer Client
Quality is equal to price or
exceeds it (subjective)
Cost of purchase
Cost of personal emotional energy
necessary to agree upon design/prototype/
delivery contract
Recycling benefits
Contract breach benefits/punishment
KPI
Exchange rate
Production costs
Labour costs
Raw material
costs
Quality standards
Shift rotation
speed
Marketing costs
ROI
14. Brand
Consumer Client
Brand of producer is not known to
the consumer.
The producer has a well established
reputation in the industry. This
means more trust.
Brand of the client connects with the
brand of the producer
Brand is the SUM of all performance
objectives.
The ability of the producer to
integrate clients brand into the
products.
KPI
Number of
referrals
Frequency of
promotion
Number of new
client who are not
referred by the
old ones.
Frequency of
order placements
15. Winners & Qualifiers
Performance objectives Consumer Client
Quality Winner Winner
Speed Qualifier Qualifier*
Flexibility Qualifier Winner
Dependability Qualifier Qualifier*
Cost Winner Winner
Brand Qualifier Qualifier
“The Company competes with each rigid packaging competitor on the basis of price, quality,
service and marketing and functional attributes of the container. “ – Annual Report 2012
17. Capacity Supply Networks Process Technology Development &
Organisation
Quality Enough qualified personal
and machines available
for work
Source from high quality
suppliers. Demand good
quality.
Keep engineering on a
high level. Safety in the
workshops is important.
Maintain high skilled,
motivated workforce.
Share practices on sites.
Speed Be able to switch product
lines fast. Maintain a
certain amount in stock
Try to source from places
near the factory. Establish
fast delivery practice.
Automated production
lines. Use more recycled
material in ovens to lower
burning time.
Try to do as many things
by local managers to
lower the bureaucracy.
CRM & IRP
Flexibility Different product lines
available. Different shifts
available. Molds.
Contracts should be
adjustable to buy high and
low amounts.
Small production lines
which are highly
adjustable.
People work in shifts.
Change places to lower
tiredness.
Dependability Capacity control system
installed. Shifts
satisfaction level high.
Delivery should be 100%.
Everything else should be
stackable.
Being able to repair the
production line yourself.
Fast repair. Parts in stock.
Appraisal talks. Try to
maintain reliable, friendly
attitude in people.
Costs Try to adjust shifts and
line usage to lower the
price per product.
Build relationships with
suppliers. Buy from one
supplier to lower costs.
Economies of scale
Build as many things with
own people to lower the
costs.
Source workforce from
lower paid countries.
Invest only if it is
necessary
Brand Emphasize in the
campaigns that O-I has
enough capacity for all.
Emphasize that we work
with high quality
dependable suppliers.
Emphasize that our
technology is reliable, fast
and flexible.
Emphasize that our
workforce is highly skilled
and motivated.
20. Supply Transportation Production Management &
Finance
Sales
Breach of contract.
Shortage of raw
materials.
Non-delivery of
ordered material.
Delivery of wrong
material, not of the
expected quality.
Delivery of small %
less than ordered.
The factory is
damaged due to
storm, fire or any
other factor.
Mistakes made in
the development
process of a
product.
Rising of energy
costs
Production process
halts due to broken
parts.
Fights.
Discrimination.
Cultural conflicts
Key personnel is not
available. (any
reason)
Political conflicts
and sanctions.
Price fluctuation
Illness of
employees.
Indebtedness
Exchange rates.
Stock build up.
Disagreements
between factory
workers and
Client terminates
contract.
Client demands over
delivery.
Distributors can’t
sell the products.
Distributor refuses
to pay.
Customer
consolidation
21. How to cope with risks…
Risk Responsible Counter action
Breach of contract Jurists and higher management Create contracts which hold the
supplier responsible for not
executing the agreement.
Shortage of raw materials Stock and procurement
management
Try to find analyse the market
for shortages and buy products
which are scares more often and
store a sufficient amount in
stock
Supply
22. How to cope with risks…
Risk Responsible Counter action
Non delivery of ordered material Procurement department Order from different supplier,
punish existing one.
Delivery of wrong material, not
of the expected quality.
Procurement department Demand fast and correct
delivery of products asap.
Delivery of small % less than
ordered.
Procurement department Clarify what went wrong, if ERP
is correct then demand from
supplier correct delivery.
Transportation
23. How to cope with risks…
Risk Responsible Counter action
The factory is damaged due to
storm, fire or any other factor.
Factory director and jurists The building and equipment
should be insured.
Mistakes made in the
development process of a
product.
Designers, mold creators,
supervisor of the process.
There should be checks in
between the processes to verify
the stages.
Rising of energy costs Factory director, procurement
department, engineers
People on top should watch out
for factors which indicate energy
rise, procurement department
should buy stuff In advance,
engineers should develop
processes which lower the costs
Production process halts due to
broken parts
Engineers There should be enough spare
parts available.
Production
24. How to cope with risks…
Risk Responsible Counter action
Fights, discrimination.
cultural conflicts, disagreements
Department managers and
factory director
Policies should be created in a
non discriminating way.
Key personnel is not available.
Illness of employees.
H&R department, CEO, factory
managers
Company culture should be good
so people would like to work for
the company long term.
Political conflicts and sanctions. CEO, CFO, jurist Keep and eye on this matter and
create policies which will help
Price fluctuation, Exchange
rates.
CFO Use hedge funds to lower risks
Indebtedness CFO, CEO, factory directors Use money wisely.
Stock build up. Procurement and sales
departments
Use better delivery systems, sale
as much as possible fast.
Management
& Finance
25. How to cope with risks…
Risk Responsible Counter action
Client terminates contract. Key account manager Try to figure out what the
problem is and negotiate better
terms.
Client demands over delivery. Key account manager Everything depends on the
capacity and contracts
Distributors can’t sell the
products.
Sales representatives Bottles can be taken back and
recycled
Distributor refuses to pay. Key account manager, jurists Invite them to appear before a
judge.
Customer consolidation CEO, CFO, key account manager Try to deliver to more
customers, diversify the client
portfolio.
Sales
as Owens Bottle Company
Merged with Illinois Glass Company in 1929 to become Owens-Illinois, Inc.
Raw materials: sand, soda ash, limestone and recycled glass.
The Company seeks to provide products and services to customers ranging from large
multinationals to small local breweries and wineries in a way that creates a competitive advantage for
the Company. The Company believes that it is often the glass container partner of choice because of its
innovation and branding capabilities, its global footprint and its expertise in manufacturing know-how
and process technology.
The Company operates machine shops that rebuild and repair high-productivity glass forming
machines, as well as a mold shop that manufactures molds and related equipment. The Company also
provides engineering support for its glass manufacturing operations through facilities located in the
U.S., Australia, Poland and Peru.
The Company carries a significant amount of repair parts inventories in order to provide a
dependable supply of quality parts for servicing the Company’s PP&E, particularly its glass melting
furnaces and forming machines. The Company evaluates the recoverability of repair parts inventories
based on undiscounted projected cash flows, excluding interest and taxes, when factors indicate that
impairment may exist. If impairment exists, the repair parts are written down to fair value. The
Company continually monitors the carrying value of repair parts for recoverability, especially in light of
43changing business circumstances. For example, technological advances related to, and changes in, the
estimated future demand for products produced on the equipment to which the repair parts relate may
make the repair parts obsolete. In these circumstances, the Company writes down the repair parts to
fair value.
Glass container production is typically scheduled to maintain reasonable levels of inventory.
The Company sells most of its glass container products directly to customers under annual or multi-year
supply agreements. Multi-year contracts typically provide for price adjustments based on cost changes
with annual limitations. The Company also sells some of its products through distributors.
proprietary equipment and process technology
