LYON_BOCQUET_Justine_MP_2016

FINAL REPORT
Justine Bocquet
JULY 2016
ABB FRANCE - CHASSIEU
Idrac, Lyon

Professional Thesis Bac+4
Justine BOCQUET
Academic year 2015/2016
Business strategy manager
Dominant: International Affairs
Professional Thesis conducted by: Madam BOCQUET Justine, Grouping: the new
impact on profitability.
Company: ABB, Tutor: Madam TIXIER Lucile
Create value through a Supply Chain
management process
key success, stakes and impacts

First of all, I would like to thank my coach Lucile Tixier. Without her I would not
have survived all the experience at the ABB. During my job interview and my different
“progress-point”, she had the time to explain to me all the projects, also supported me all
this year. She shared all her goals with me for the Logistic Engineering department. All
along this year, she redirected me and helped me to develop myself. Thanks to her, I
became more mature and confident that in the future I could be running in the position
as a manager. Her advises were precious.
I would like to thank all the logistic engineering service, especially João Caetano.
Thanks to his deep technical knowledge, he helped me to use all essential tools. Thanks
to him, I had a great integration in the company and in the warehouse. Methods and
tools became familiar to me and continue to be a real technical support. I want to thank
all my collaborators in the supply chain, through their integration since the beginning;
they treated me as a real employee and not like a trainee. Thanks to this, it was easy for
me to find my place in the company.
Finally, I would also like to express my gratitude to the entire board of staff with
whom I have had the honor of working during this year.A big thanks to Didier Ailloud,
with whom my written process became easier. Mr Ailloud had the patience to answer all
my questions and show me how to do my best on this report.
To conclude, thanks to the teaching staff for sharing their knowledge during this
year.

Depuis un an, j’ai intégré le département Supply Chain plus particulièrement le
service ingénierie logistique au sein du groupe ABB, dans l’usine de Chassieu, Lyon. Ce
site fabrique 3 produits finis différents : des contacteurs, des capteurs et des blocs de
jonction.
La mission qui m’a été confiée porte sur la réduction du stock de composants, en
plus de l’amélioration des flux. Pour répondre à cela, la création d’une navette milk run
m’a semblé indispensable. Cette technique logistique permet de mieux gérer les couts et
de diminuer les stocks.
Ainsi, dans ce rapport vous retrouvez une analyse globale de la chaîne logistique.
A l’aide de ce support, j’expose les actions d’améliorations qui me paraissent les plus
pertinentes pour répondre à la mission confiée. Certaines sont déjà mises en place alors
que d’autres sont en cours d’application.
Cette première expérience professionnelle et cette première mission m’ont permis
d’acquérir des compétences professionnelles indispensables pour la suite de ma carrière.
Des qualités telles que l’esprit d’initiative, l’esprit d’analyse et le travail en coopération
avec différents services m’ont été nécessaires pour débuter cette mission.
Mots clefs: chaîne logistique, stock, amelioration des flux

I had a great experience working in the supply chain department for one year,
where I was placed in the logistic engineering service in ABB Group, in the production
site in Chassieu (near Lyon). This site manufacture three types of products: contactors,
sensors and terminal blocs.
My mission was to reduce stock of components and improve flows. I decided to
create a milk running process in order to accomplish my duty. This logistic technique
is directly linked to reduction of cost and stock.
Thus, in this report, you will find a global analysis of the supply chain. Thanks
to this support, I stated all improvements that we must take in consideration in order to
succeed in my task. Some of them are already set up, but others are still in progress.
Thanks to this first professional experience and first mission, I had the
opportunity to acquire the professional skills that will help me in my future career. I
developed operational qualities such as entrepreneurial and initiative spirit, or critical
and analytical thinking. I learned how to work in different departments in order to
ensure they well progress in my missions.
Key words: supply chain management, stock, optimization of flows

Table ofContents
I. COMPANY: ABB 1
A. PRESENTATION OF THE GROUP ABB 1
1. POWER GRIDS 2
2. ELECTRIFICATION PRODUCTS 2
3. DISCRETE AUTOMATION AND MOTION 2
4. PROCESS AUTOMATION 3
B. THE SITUATION OF THE GROUP: 2015 4
1. SUPPLY CHAIN TO VALUE CHAIN 4
2. NEXT LEVEL STRATEGY: 2016 5
3. FEWER ORDERS 6
4. IMPROVED MARGINS 7
5. SHARE PRICE INCREASES 7
C. COMPETITORS 7
1. ALSTOM 7
2. LEGRAND 8
3. SCHNEIDER 8
4. AEG 8
D. ELECTRONIC MARKET 9
E. WHERE IS ABB? 10
1. LOW POWER DIVISION AND PRODUCTIONS SITES 10
2. PLENT SITE (LEBORK) POLAND 12
3. CHASSIEU SITE (LYON), FRANCE 13
II. DIAGNOSTIC AND CONTEXT OF THE SITUATION 14
A. GENERAL CONTEXT 14
1. ECONOMIC CONTEXT 14
2. CONSEQUENCES 15
B. ORGANIZATIONAL CONTEXT IN THE FIELD OF THE INDUSTRY 16
1. INDUSTRIAL REVOLUTION TO ACTUAL INDUSTRY 16

2. LEAN MANUFACTURING:1975-2000 18
3. SUPPLY CHAIN MANAGEMENT: 20S TO TODAY 24
4. SIMPLE LOGISTICS TO THE SUPPLY CHAIN:A COMPLEX SYSTEM 27
5. SMES TO A MULTINATIONAL FIRMS 33
III. STUDY CASE ABB 35
A. FIELD ANALYSIS 35
B. THE METHOD OF SELECTION 36
1. INTERNAL INTERVIEWS 36
2. EXTERNAL INTERVIEWS 37
C. INTERVIEW GUIDE 37
1. GOAL OF MY QUESTIONNAIRES 37
2. CONCLUSION 40
D. THEORY VERSUS PRACTICE 40
1. SUPPLY CHAIN MANAGEMENT 40
2. STOCK 42
3. KPI 43
IV. ADVICE 45
A. FOCUS ON ABB 45
1. LOGISTICS PROTOCOL 45
2. STOCK 46
B. RECOMMENDATION 47
1. MILK RUN 48
2. KANBAN 50
3. CONSIGNMENT 51
V. CONCLUSION 52
VI. WORKS CITED 54
A. TABLE DES ILLUSTRATIONS 56
VII. APPENDICES 58
A. ABB ORGANIGRAM 58
B. PRODUCTS RANG 60

C. INTERVIEWS 61
1. QUESTIONNAIRE DE TERRAIN INTERNE (ABB) 61
2. QUESTIONNAIRE DE TERRAIN EXTERNE 68

Introduction
For my masters in Business strategy management in international affairs. I
joined the “Logistics Engineering department in ABB Group; one of the global leaders
in design and manufacturing of electrical appliances. This is my first experience
working in a big group such as ABB. I chose a sandwich course as I wanted to create
a link between the theatrical knowledge I am acquiring at school, and professional
competences during my 4th year. Now, I want to pursue an international career
following the insight the ABB group has given me. The main point of this year is to
manage a project linked to the purchasing and value chain: “Implement a
transportation supplier shuttle”. It is called in industrial language “Milkrun shuttle”. The
aim is to optimize the logistics flow and purchasing costs.
This notion has gradually imposed to describe the set of organizational
changes affecting industrial production but also services. Suppliers unable to sustain
regular full truckloads can make use of an innovative initiative which enables LTL1
deliveries at full truckload prices. The Milk run is the most optimized model of
distribution; however, it involves complexity in planning, designing, executing and
analysis of the same. This movement is being integrated within most big industries
such as automotives, pharmaceutical and clothing industries. Indeed, in the current
economic context of globalization of trade and increased competition, greater attention
is paid to the MOQ2 reduction target and thus maintains the lowest possible purchase
price. Other challenges due to the same context (increased competition and
competitiveness) are customer loyalty, reduced delays and the reduction of carbon
footprint, or all devices to ensure increased reduction of inventory.
How create value for ABB through a supply chain management process and
what could be its impact on company's profitability? What are the key success
factors of this process; stakes and impacts?
1 LTL : Less than truckload shipping is the transportation of relatively small freight
2 MOQ : Minimum order quantity

At first, I will introduce the company ABB and organization, and then consider
the context in which the company operates. Finally we will discuss the tools and
methods put in place and the results obtained.

1
I. Company: ABB
A. Presentation of the group ABB
Over 120 years ago,
Thomas Edison, supporter of
DC3 current, came around to
George Westinghouse idea of
alternating current. The DC
was “for” from being for the
concept: in 1954, one of the
predeceasing company’s of
ABB, the Swedish ASEA,
inaugurated in Gotland the first
link in high-voltage direct current (HVDC). ABB is the World leader in HVDC solutions
and energy technologies/ automation. The Company was created in 1988, following
the merger of two large companies: ASEA Allmänna Svenska Elektriska Aktiebolaget,
a Swedish company and Brown, Boveri & Cie, a Swiss company. The headquarters
are in Zurich, Switzerland, the company employs about 150 000 people and operates
in about 100 countries worldwide. ABB shares are listed in Zurich’s exchanges,
Stockholm and New York. The success of ABB particularly lies in its focus on research
and development (R&D).
R&D programs focus on incremental and breakthrough developments which
address challenges including:
 Integrating renewable power sources into the grid
 Enhancing power network efficiency, reliability and flexibility
 Improving industrial resource efficiency and asset productivity
 Optimizing flexibility and reliability
3 DC current : Continous current
Figure 1: Pioneering technology since 1883

2
ABB employs 8,000 researchers and has seven centers of research and development
throughout the World, and continue to invest almost $1.4 billion annually in R&D. ABB's
businesses are organized into four divisions and are further subdivided into Business
Units to cover each category of products and industries.
1. Power Grids
The Power Grids division delivers products, systems, service and
software solutions as part of its comprehensive power &
automation. This unamenable them to offer the grid using the power
value chain - serving utility, industry, transportation and
infrastructure customers.
2. Electrification Products
The supply of energy products covers various voltage levels and
comprises of circuit breakers, switches, capacitors, transformers
(current, voltage, power, traction ...) and a complete range of medium
voltage products. Customers are: public energy services, electricity
infrastructure, industry, service sectors. ABB is the leading supplier of
processors and has recently developed the most powerful
transformer in high voltage direct current (HVDC).
3. Discrete automation and motion

3
Motors, generators, drives, programmable logic controllers (PLCs),
power electronics, robotics and mechanical transmission with power,
motion and control are used for a wide range of automated
applications. Increased supply from the solar and wind power
industry complements the industrial target and strengthens their
technologies, networks and operating platforms. Charging stations
for electric vehicles opens the way to the future. Producers, OEMs in
numerous industries, and users in many industries. ABB is the world leader in motors
and drives.
See below the customer segments
4. Processautomation
Integrated automation solutions for control and plant optimization, and
process control applications and services enable manufacturers
worldwide to meet their needs in terms of operational profitability,
capital productivity, management risk and general liability. Industries
served include oil & gas, chemicals and pharmaceuticals, pulp and
paper, metals and minerals, the naval sector and turbochargers. ABB
delivered the first solution to the energy management world from a boat to an offshore
oil platform.
Figure 2: ABB's customer segments

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B. The situation of the Group: 2015
ABB was in trouble during the first half because of the economic environment which is
still difficult, but we do not need to be worried about. The group saw its net profit
decreasing by 2% (year) in 2015, this equates to $1.15 billion (CHF 1.1 billion). The
turnover declined by 10% ($17.72 billion).The dollar had a huge impact on this
decrease. In fact the company generates almost half of its businesses in USA dollars.
1. Supplychain to value chain
The group recently merged all hub from Central Europe, independent
identities such as ABB France, ABB
Polka, ABB Bulgaria, ABB Czech
republic and ABB Germany became
one huge hub named HUB Central
Europe. These following slips are
made to change the ABB strategy.
The role of the supply chain was
to ensure on-time availability of
materials at lowest cost. In a SC4 in
ABB, four criterions are taking in
consideration:
 Information flow: Forecast, MRP, Purchasing, Orders, Shipping
 Material flow: Supplier, Incoming, Stock
 Quality
 Engineering
The target of this process is to establish and manage the raw material, finished
goods stock in order to be ready with customer orders.
4
SC : supplychain
Figure 3: Central Europe Hub

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Since last year, ABB wants to develop another strategy which is more local
thanks to the hub merger. In fact, the new target of this expansion is to develop and
deploy business planning (IBP) and integrated materials management (IMM) best
practices and solutions for the entire value chain of the local unit in line with global
BU strategy. Principal’s stakeholders on this are: Integrated Material Management
and Warehouses Logistics. The
objectives are to support profitable
growth and to increase customer
satisfaction by improve on-time
delivery or product availability.
2. Next level strategy: 2016
The strategy is building on
ABB’s three focus areas of
profitable growth, relentless
execution and business-led
collaboration. In the next period, the
company will drive profitable growth
by shifting its center of gravity
toward high-growth end markets,
enhancing competitiveness and
lowering risk in business models.
The Next Level organization is
designed to simplify how we work
together, improve customer focus
and productivity, strengthen lines of accountability, and ensure our business is better
oriented externally towards the market. See beside the diagram of the next level
strategy. With this strategy, the distribution became local, one sender with the same
lead time.
Figure 4: ABB organization
Figure 5: ABB next level strategy

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3. Fewer orders
"The situation reflects expected as market conditions deteriorated and a
backdrop of weak demand in China and the US as well as in the oil and gas industries,"
stated the CEO Ulrich Spiesshofer In the annual report of the company.
The following represents the main points of noted he thought relevant.
 The Next Level strategy yields positive results
 Controls and stable earnings the orders growth rates, revenue and order book
on a comparable basis (local currency adjusted for acquisitions and disposals),
earlier growth rates on a comparable basis in US $ are presented in the table
key figures., for a reconciliation of non-GAAP measures, see "reconciliation and
additional definitions" in the financial Information Q4 2015 attached. Backlog
increased 5%
 Operating EBITA margin up 60 bps to 11.8%
 Operating earnings per share + 5% (in constant currencies)
 Cash return on invested capital increased by 70 bps to 13.4%; Free cash flow
+ 16%
 The "step change" in the Power Systems division has its financial recovery in
2015

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4. Improved margins
ABB have improved the margins. The increase reflects progress in the changes
made by the Division of Energy Systems Power
Systems by reducing costs and increasing
productivity. For the remainder of fiscal 2015, Ulrich
Spiesshofer confronted the difficult conditions by
inducing developments in the market. This context
should not distract the Zurich group of its "next-level"
strategy.
"We want to continue to show profitable growth in line
with our objectives and achieve sustainable value
creation," noted the CEO.
5. Sharepriceincreases
By selling on the Swiss Exchange, the share prices of ABB increased. Although
negative the financial statements proved to be better than previously expected. The
improved EBITA margin also pushed the previous results, which closed with a gain of
1.73% at 20 francs.
C. Competitors
See bellow, a quick presentation of a principal competitors
1. Alstom
 active in 60 countries
 turnover of €6.2 millions in 2014
 32 000 employees
 Headquarter in France
Figure 6: ABB's Revenues 2015

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 Principal market
o Components
o Power plant
o High speed train
o Power network
2. Legrand
 Active in 80 countries
 Turnover of € 4.4 millions in 2014
o Communication
o Secured power
o Comfort
3. Schneider
 Turnover of €25 millions in 2014
o Electrical distribution
o Automation and control
o Critical power
4. AEG
 Turnover of €9 millions in 2014
 Headquarter in Germany
o Building
o Energy and infrastructure
o Industry

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o Trains/planes
Despite a huge competition between these different groups, we faced some alliances
such as Alstrom in 2000, the fusion became ABB Alstrom Power, this new group hired
58 000 employees and reached a turnover of €10 millions. AEG does not possess the
key technologies to be sole supplier of train’s sets for mainline transportation; ABB and
AEG became partners on the train project.
D. Electronic Market
The Electric, Electronic and Communication Industries are very diversified. It could be
a small company or a World Leader. They imagine, design, manufacture and
implement the power and numeric technology. All of them are a major pillar of the
global industrial economy, thanks to them, the innovation and technology are rising
constantly.
Lately, unfortunate events have affected the sector, such as:
 The Economic crisis
 The Fluctuation of the raw material exchange (Gold, Silver, Copper…)
 The Climatic disaster (Japan’s Tsunami; major importer and manufacturer of
electronic components)
Otherwise, the market is doing well and various factors are helping the sector to grow
like:
 The use of automation driven by software
 Increasing of software’s shares
 Components are becoming more interactive with each other
The market face new regulations:
 PCB/PCT5
5
This Directive lays down rules to approximate the laws of the Member States on the controlled disposal of
PCBs,the decontamination or disposal ofequipmentcontaining PCBs and/or the disposal ofused PCBs in order
to eliminate them completely.

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 ISO 500016
 ESC7
Economic perspectives
 Labor costs are lower in developing countries (BRICA8)
 The development of wind farms
 The cost of energy pushes improvements in the energy efficiency of products
 The development of hybrid and electric products
E. Where is ABB?
1. Low power division and productionssites
ABB own seven production sites, but their sales sites are global.
6
Using energyefficiently helps organizations save moneyas well as helping to conserve resources and tackle
climate change.
7
ESC: Energy Saving Certificate: Accredited Certificate Providers can implementenergysaving projects and
create ESCs representing the energysavings from the project. These certificates can be traded and sold
to Scheme Participants who have an obligation to meetenergy savings targets each year through the surrender
of certificates or the paying of a penalty.
8 BRIC : Brasil, Russia, India, China, South Africa
ABB
Brno,
Figure 8: worldwide production sites
Figure 7: Sites in France

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Factories:
 Chassieu, France
 Lebork, Poland
 Brno, Czech
 Xinhul, China
 Bangalore, India
 Tuouman, Argentina
 Plodiv, Bulgaria
Chassieu sites (Lyon) is working in collaboration with Poland and Bulgaria. Some
sites are producing subset products that can be used in another site where they will be
assembled. All productions sites adapted themselves to the local market. In this case,
the principal partner of ABB Chassieu (Lyon) is ABB Lebork. This synergy came from
the latest generation of contactors. The upper part is produced by ABB Lebork and
repatriate at ABB Chassieu, then the French factory produces the lower part and
assemble both parts together to build the final product.
In 2011, ABB completes acquisition of Thomas & Betts. The acquisition of
Thomas & Betts advances ABB’s strategy of expanding its Low Voltage
Products division into new geographies, sectors and products. The
complementary combination of Thomas & Betts’ electrical components and
ABB’s low voltage protection, control and measurement products will create a
broader low voltage offering. The US is ABB’slargest market, with an estimated
$6.6 billion in annual revenue and 19,000 employees.

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2. Plent Site (Lebork) Poland
PLENT hires 118 employees, with an area of 89341 sq feets. The site generates €3
millions per year and is taking more and more value. In the past, ABB Chassieu was
taking care of the supply chain management in this site. In recent years, Plent has
become more autonomous, and handle the entirety of the production services.
The suppliers have to deliver directly to the Polish site, but if the transit cost is important
like French suppliers, they have to deliver to a DHL platform (Venissieux, France) and
then DHL deliver by shuttles to Poland (2 times a week). Procurement, management
and supplier sourcing are now handled by Plent.
Figure 9: Plentsite

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3. Chassieu Site (Lyon), France
Chassieu consists of an area of 247569 sq ft and hires 374 employees, but most of the
workers are temporary (allowing production to be more flexible. As of 2015, the site
generates €138 billion. The main activities on this production site are terminal blocs,
sensors and contactors.
The site CH1 (Chassieu 1) is only used for assembly workshops. As demonstrated in
the diagram, we can find on green, the raw material and component storage. Most of
products built there are low runners and ordering by few customers. We find some
carcass molding, which will be sent to CH3.
The workshop CH3 is used for all the assembly lines of contactors (new range), more
are automatized or semi automatized. This site recovers all production lines of sensors
that will be used in the general industry or rail sector.
Our principal client is SNCF. CH3 is the central warehouse-mass storage, all
receptions are from this warehouse.
Figure 10: Chassieu site

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Finally CH2 has a small storage department, but this building is mostly used for
administrative and marketing departments.
II. Diagnostic and context of the situation
A. General context
1. Economic context
The economic context is the most powerful stakeholder. In this report, I think it is
important to explain how ABB is evolved in this context. The manufacturing industry
cops several economic crisis in the last forty years.
In fact, few parameters have been weakened in different markets such as:
 Oil counter-shock
 Interests and inflation rate increasing
 Raw material boom
 BRIC’s growth
Moreover this background frame, the local environment became shaky. Households
and companies handled the financial crisis but there were many consequences:
 Bankruptcy of financial institutions
 Financial markets suffered of a shortage of capital
 Difficult to have access to capital
 High levels of debt
 Slowdown of investors and consumption
 Slowdown of the economic growth
Between 2008 and 2011, the economic context was still complex. The overview
was uncertain. The demand was very low and companies could not set up a long term
strategy. This worrying situation is difficult for the government, because manufacturing
industries helped:
 The creation of employment
 The GDP impact

15
 Fixed capital creation
 Exportation and presence abroad
2. Consequences
All these trends pushed companies to be fearful and to keep reasonable margins and
WCR9.
Demand’s economy context Actual context
Sale price= cost price + margin Margins=sale price-cost price
One of these tools which permitted to keep acceptable margins, is the cost reduction.
The scheme below represents the cost cascade concerning gross buy-in-price to the
gross margin of components or raw material.
Thanks to this scheme, we can see that changing the purchasing cost or
prime cost have a direct impact on the net and gross margins.
9 WCR: working capital requirement
Scheme 1: cost cascade

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Several criterions are using to calculate the purchasing cost (see the figure 5)
We can see on this diagram, purchasing cost is divided by few other costs. We can
cite the management cost, maintenance or operating.
B. Organizational context in the field of the Industry
Since 1973, technological, political, regulatory, and economic forces have
been changing the global economy. In this chapter, we will see the evolution of the
industry.
1. Industrialrevolution to actual Industry
a) Industrial revolution: 1900 to 1975
The industrial production has contently changed, the goal of this transformation
was to upgrade the five main topics: production capacities, work methods,
management and decision process, human resources management, and to finish, the
information and partnership system.
The mid-nineteenth century witnessed another wave of massive change with
the birth of modern transportation and communication facilities, including railroad,
telegraph, steamship, and cable systems. Those innovations helped to intensify the
production and transportation process; it was the first mature phase in the case of new
Scheme 2: cost division

17
organizational industry process: adapting the product to the demand to create mass
production.
At the end of the nineteenth century, Taylor’s10 research into the rationalization
of the organizational aspect of the industry, gave a huge chase against the waste of
non-productive time. He created a labor division to simplify tasks. For him, surveillance
and systematic measurement were an ideal way to increase production. All his
scientific literatures as “principles of scientific management” helped to create the
Modern Industry. There is no ideal labor division, but it can be optimized by the
experimental science. According to Taylor, the partnership between labors and
manager should be based on trust as a “win-win system”.
The next development after Taylor was piloted by H.Ford11. At the beginning of
the 20th century. He developed Taylor’s idea and added assembly lines and
standardized items. The result of this was to decrease the production time and it
worked. He was considered by many as the most creative “Industrial man”. In the
atmosphere of mass repetitive production, he created the modern industry principles
of standardized products and mass consumption. Even if the majority of the industries
were running over abundance, H.Ford had an innovative and creative mind to develop
the production to transportation process.
“There is one rule of the industrialist and that is: make the best quality
goods possible at the lowest cost possible, paying the highest wages
possible.” H.Ford
The sixties entered another industrial crisis. Ford’s organization style had been
redrawn by the Japanese group: Toyota. Thanks to Taiichi Ohno12, who influenced the
outside manufacturing area by identified seven wastes:
- Delay
- Produce more than you need
- Over processing
- Transport
10
Frederick Winslow Taylor (1856-1915) was an American mechanical engineer who soughtto improve industrial
efficiency.
11
Henry Ford (1863-1947) was an American industrialist,the founder of Ford Motor Companyand the s ponsor of
the developmentofthe assemblytechnique ofmass production.
12
Taiichi Ohno (1912-1990) was a japanese engineer and businessman. He is the father of Toyota Production
System.
- Unnecessary motion
- Inventory
- Reduction of defects.

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T.Ohno was the pioneer of the “just-in-time” concept. It was the result of those seven
major wastes.
b) Conclusion of Industrial revolution
Those three forerunners helped the World Industry by asking the right
questions at the correct moment. The “Kaisen13” process was born. The aim of
Kaisen was to eliminate waste, they achieved this by improving regulated activities
and processes.
To go back on the technological advances in this period. It is useful to include
the global context. All these new steps were based on the new workforce philosophy
which was established in a stable economy with minor disruption. The client delay
was very long, the personalized merchandise was maintained at moderate levels and
the possibility to boost mass standard production was unwavering. In this new
process, the stock aspect had been pushed away, and we faced a lack of flexibility
and reactivity.
2. Lean Manufacturing: 1975-2000
Thirty Glorious Years14 and some oil shocks shook the economy context. While
the economy was struggling, a fluctuation of the industry`s demand was created. All
organizations needed to adapt themselves and grow with the market; the actual market
at this time was growing constantly. We faced the appearance of the versatility, a
flexible manufacturing system and the digitalization of the information process (orders,
invoices…). The quality became more important than the production. These three
components were based on the Just-on-time system created by T.Ohno. The Pull flow
concept appeared. The overseeing of the customers’ orders forced a reduction stocks
13
Kaisen:Japanese word for « improvement ».It refers to activies that continouslyimprove all functions,all
employees and all processes.
14
The Glorious Thirty (1945-1975)

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and used the pull-flow system. According to this new system, the industry faced the
problem of bottlenecks15. Using this method helped to rise the flexibility and the
reactivity of the production line.
During this period, “toyotism” and its guidelines rose very fast. The pull flow
logic and the Just-On-Time system influenced the people involver’s behaviour. The
forecast tools were set up. The innovation and
the rationalization were in the center of the
industry’s cycle life. The effectiveness criterion
has been replaced by efficiency one. The
implementation of Pull Flow system took in
consideration the multidisciplinary organization
around the production and the logistic.
To sum up:
 Delivery delays are shorter (reactivity)
 More and more doubts regarding volumes (flexibility)
 Zero stock trend (economic performance)
These criterions became the foundation of the new industrial system. These new
objectives helped to develop a new innovation system such as production monitoring;
E-information system.
a) Production orders-Modular design
We faced a new production method, in fact, the stocks are not driving the production
anymore but the customers' demands.
 Pull flow production politics
 Reductions of current stock
 Decreasing of finished goods
15
Bottleneck: A bottleneck is a point of congestion in a system that occurs when workloads arrive at a given point
more quickly than that pointcan handle them.The inefficiencies broughtaboutby the bottleneck often create a
queue and a longer overall cycle time.
Figure 11: Pull Flow System

20
Because of these new changes (lots are decreasing and no-more standardized
orders), it was very important to change the way to produce. The SMED16 or Modular
design appeared.
The modular design consisted to separate the product’s conception to the
principal’s components. It reunited all products assembled together or which are doing
the same tasks. This new “sub-assembly” organization helped to rationalize the
physical installation of the production workshop. This helps to reprocess in maximum
some components already used in other products. More components are created to
connect existing architectures, therewith to improve products efficiency but not return
the viability of the workflow development.
The introduction of this type of designallows a reduction in product development
time and costs (savings on development costs + economies of scale related to
standardization). However, it can become an obstacle to radical innovation (which
requires changing both the architecture and components) and can sometimes cause
quality problems when interactions between the various components are poorly
controlled. It requires distinguishing architectural innovations modular innovations.
On this matrix, you can see on the left diagram, a simplified nomenclature, after
defining tasks of every component then connected to each other’s, the software linked
all information and created components’ “blocks”. This will directly impact the industrial
conception.
16
SMED: Single Minute Exchange: a method for reducing the time it takes to prepare a machine to do a new job.
Figure 12: Matrix decomposition

21
Beginning of the 20th century, Some ERP17 are integrated MRP18. It was helpful
to rationalize procurement, to define a correct strategy, and to decrease stock quantity.
I will develop this aspect later in this report.
b) Physical system of production and product
The trend of standardizations (as the modular design cited above) had to
simplified production flow, and therefore to handle less references on stock but a better
production flexibility (with less references, we have more chance to have a correct
stock).
Innovations implemented at the production facilities have been a real value on
the technologic revolution such as FMS19. The main problem on this innovation was
the productivity, in fact, one piece is being machined 5% of its workshop transit time.
New technologies such as robotic and informatics were used to optimize flexibility and
productivity.
c) Robotic emergence
The emergence of new robotic platforms that feature advanced sensors,
machine vision, connectivity and autonomous navigation capability have opened up
“blue ocean” market opportunities with applications that have never before been
automated.
o Combination of multi-skilled robots
o Creation of robotic blocks
o Combination of robots with FMS
The informatics/information system carried out a complex steering:
17
ERP: Enterprise Resource Planning.Business process managementsoftware thatallows an organization to
use a system ofintegrated applications to manage the business and automate manyback office functions related
to technology, services and human resources.
18
MRP: Material Requirements Planning.It is a production planning,scheduling,and inventory control system
used to manage manufacturing processes.MostMRP systems are software-based,while itis possible to conduct
MRP by hand as well.
19
FMS: flexible manufacturing system: A flexible manufacturing system (FMS) is a manufacturing system in
which there is some amountofflexibility that allows the system to react in case of changes,whether predicted or
unpredicted.

22
 One robot: execute a machining range
 One block: appropriation of one task to one robot
 One FMS: global coordination of the workshop
All robotics manufacturers innovated contently to answer the market demands. This
new opportunity helped some companies to go thought this new strategy; flexible and
durable competitive advantage.
d) Upstream
The consequence of the production order evolution is the reduction by two of the
supplier portfolio. Rapidly this old approach; an economies of scale; evolved and
involved more criterions like:
- Quality
- Deadline compliance (service rate)
- Commercial flexibility
- Technological flexibility
- Financial health
- Loyalty partnership
The strategy of long term supplier’s relationship and purchasing function evolved
rapidly and it shown the first collaboration between purchasing and productivity
department.
e) Information system improvement
The continuous improvement of the digital technologies and the information
systems helped all the actions developed previously in this report. The dramatic shift
of the informatics capacity was based on:

23
Computational power
Interactivity and offshoring of recording terminals
This is a huge development of the technologic dimension (Hardware). In fact, the
information system became more flexible to adapt its own to new
implement capacities. This improvement is based on a constant
updating. Kanban system is a main disclosure created from this
new information/communication system.
Just-in-time system doesn’t substitute a MRP, but be part of
an additional steering subsystem, and can be used for a court-
term. To reminder, MRP is a system which can be only used on a
long-term plan; one order with one quantity in one specific date.
According the Kanban system is more an appeal system on
components or subset workstation. Pull flow system has been
created, thanks to a strong relationship between internal clients
and internal suppliers. It was based on a bilateral relationship
between endorsement station and upstream one. The Kanban is a
simple cards traffic which communicate to the upstream station
(internal clients) what they need.
Furthermore, Kanban system formed a simple information system,
often efficient and accessible; which encourages the
communication and minded commitment.
f) Conclusion of Lean Manufacturing
In almost one century, we faced a new technological/cultural and organizational
revolution. It was directly linked to the infrastructural development and the demand
(growing according to the economic and geopolitics context.
Figure 13: ABB's Kanban

24
All processes are controlled and
optimized. Polyvalence and quality are more
than important in the all company. MRP and
commercial forecast helped to develop
logistics tools and efficiency. We faced a
better management concerning purchase
order between purchasers and planners. All
holders’ services worked together and used
common improvement tools. The
management is more participatory and split
between flexibility and versatility. The
collaboration is now crucial: emergence of ERP; software system using a pragmatic
approach, searching for maximum efficiency. All these data are used by every area of the
business. It became a new age.
3. SupplyChain Management: 20sto today
Previously, we noted than processes are more controlled thanks to tools more efficient
and collaborative. This inter-organizational view had been called Supply Chain. The scope
varies between different levels: more often by the size of the organization (schema
bellow):
Closed/open local approach
Global approach/extended global approach
Figure 14: organizational viewof modeling
Scheme 3: model management

25
Since the term “supply chain” contains the word “supply”, many people naturally
assume that supply chain must have something to do with suppliers (i.e. purchasing or
procurement). While it is true that supply chain management does encompass the
purchasing and procurement functions, supply chain management actually extends well
beyond those areas. Supply chain management is the practice of manufacturing and
distributing physical goods as efficiently as possible.
Supply chain management encompasses the entire process of manufacturing and
distributing physical goods, from supplier’s supplier to customer’s customer. Business
functions that are within the realm of supply chain management include: forecasting and
planning, procurement and purchasing, manufacturing and assembly, warehousing and
distribution, shipping and transportation, returns and refurbishment, inventory
management and order management. Or, stated more simply, supply chain management
includes the functions: plan, buy, make, store, move, sell and return.
According to the globalization over the 1990s, encouraged the outsourcing of
production units. K. Ferdows20 (1997) proposed to classify in six types of manufacturing
supported by three principals reasons to outsource oversea:
 Production cost
 Competency and knowledge
 Market proximity
The emergence of the network-company system and supply chain management21
are due to the outsourcing of the activities and resettlements of suppliers and factories.
During these time, the SCM is defined by physical, financial and informatics flows
management. It is acting on different costs such as:
 Added value
 Cost price
20
Kasra Ferdows:He is a professor ofmanagementatGeorgetown University (DC) and author of academic and
professional publications.
21 Supply chain management :SCM

26
 Invested capital
 Global profitability
The global view is not only one company but as a whole implicated actors in a client’s
satisfaction process. The supply chain approach enhanced the inter-organizational
management aspect.
a) Financial aspect
A network of companies had a real advantage in leverage effect. Division of fixed
expenses between factories from the same hub22. It became easier to control the financial
aspect, and pilotage organizations. An efficient management of the supply chain is based
on the reactivity according to the client’s demand (pull flow), stocks and WCR23 minimized.
The SCM authorized a snapshot known of current stocks in the network, a client’s
demands driving (driving push flow) and thus a better stock flow.
In the “0” stock approach, all departments in the global network are an indirect
stakeholder according to the sales of forecast improvement or promotional actions impact.
The complexity of stock management resides in a correct forecast (sales), demand
planning or the different forecast models.
In order to reduce stocks, this new view of globalization and network system helps
companies to implant themselves closer to their suppliers and clients. We are not talking
about reactivity of production tools, but responsiveness from the all supply chain network.
22
Hub: A center of activity, focal point
23
WCR: Working capital requirement is a financial metric which represents operating liquidityavailable to a business,
organization or other entity, including governmental entity.

27
b) Conclusion of SCM
The SCM formed an extension of the efficiency (price, quality, stock level, client
service rate) and the flexibility. The organizational excellence and the SCM are two
complementary phases which are going into a same dynamic.
During the two biggest innovation periods: 80s and 90s; we faced a continuous value
creation research and the performance of the quality tools thus the relationship between
collaborators came to the first stage.
 80s: Companies opened intern functions
o supplier/clients relationships
o simultaneous engineering
o New cooperation method in the purchaser department
 90s: keeping the previous achievements by adding extern partner’s relationship
o Distributors
o Suppliers
o Subcontractors
o Carriers
Quality insurance, business ethics became essential skills to keep a high level of
SCM and global company’s network. This new system is based on trust between partners.
This trust is considered as a specific asset for the pilot company (hub), and its capacity to
organize or manage it became a “knowledge”.
4. Simple logistics to the supply chain: a complex system
fter the second war and during the 60s to the 70s, the logistic idea became a new
managerial function. The companies continued by acquiring several tools and gaining
knowledge.A

28
a) Global logistics
Logistic process was related to distributors or to a transport/storage activity. It
managed physic flows to several data such as customs, finances and technology. The
main goal is to make all the resources related to the needs available by respecting
economic, legal, quality and security
aspects.
“Logistics has been playing a
fundamental role in global development
for almost 5,000 years now. Since the
construction of the pyramids in ancient
Egypt, logistics have made remarkable strides. Time and time again, brilliant logistics
solutions have formed the basis for the transition to a new historical and economic era.
Examples of this fundamental progress include the invention of the sea-cargo
container and the creation of novel service systems during the 20th century. Both are
integral parts of globalization today.” Logistix Partners Oy.
Demonstrated below are the three big steps of global logistics; all the materials I read
show off the same chronology:
 Between 1950 and 1975, the logistic function helped to set up and rationalized
physical flows because of the production economy and the mass consumption.
 1975-2000: the quality’s economy concept is omnipresent thanks to Toyota
Production System. It became a way to rationalize and define on organization by
information flow and technology information (high speed).
 From 2000: Logistics faced the modeling system and the rationalization of the
organization by the knowledge flow.
Logistics is defined as a business planning framework for
the management of material, service, information and
capital flows. It includes the increasingly complex
information, communication and control systems required
in today's business environment- Logistix Partners Oy,
1996

29
“The invention of the sea container by the
American Malcom P. McLean changed production
conditions for nearly all industries around the world and,
as a result, altered people’s consumption habits. Even
today, the sea container continues to ensure that harbors
gain major contracts, new countries and regions
experience commercial booms, markets arise and
products from all parts of the world can be bought and
sold at reasonable prices. In this way, the container has
significantly contributed to globalization.” Logistix Partners Oy.
b) Supply chain: A look at the entire logistics chain from the vendor’s
supplier to the end customer.
Supply chain management is a term that has grown enormously in use and significance
since the late 1980s. Today, supply chain management is viewed as a holistic
consideration of key business processes that extend from the vendor’s supplier to the end
user. Accordingly, supply chain management is an extremely interactive, complex system
requiring simultaneous monitoring of many conflicting objectives.
c) Information system in the SCM
The area which grows faster than others is the information system. Several tools appeared
from the last decade. Below are the more important professional/optimization of the
logistics chain software:
ERP-enterprise resource planning
APS-advancedplanningsystem
WMS-warehouse managementsystem
TMS-transportationmanagement
system
SRM-supplierrelationshipmanagement
SCEM-supplychaineventmanagement

30
ERP allowed a data transactional
management. It holds in rigor the
way of how the activity management
runs and can be connected together
by EDI24 or internet. It contributed to
create a wide supply chain
organization.
ICT25 had been a key role in the
network and communication. It is a
new wave of technological
innovation. The expansion of the
communication standards, new network (internet/EDI) and ICT helped to increase the
flexibility partner’s portfolio. Internet network allowed to exceed a simple B to B26 system
enforce by EDI; but it became B to C27,
more varied.
The emergence of technologies such as
RFID28, according to DHL; “RFID is a new
trend in logistics. RFID believe in new
tasks system; it is almost like barcode: information
about the product, pallet or inventories.
The major advantage is the information doesn’t need to be read by bulky material, it is just
done by radio waves. It is automatic, faster and contactless. Logistic units are more
concerned about this new technology. It should develop a better tracking of the products
and components in the next few years. RFID should anticipate the hazards of the logistics.
24
EDI : electronic data interchange for documentation purposes
25
ICT: Information and communication technologies
26
BtoB : Business to Business
27
BtoC : Business to Consumer
28
RFID: Radio frequency identification
diagram 1:Technology/strategy evolution
Figure 15: RFID system

31
Below is the pattern which represents a systemic approach of ICT in different company’s
technologies.
We observed that “Intranet” is integrated the all entreprise.it can work in a “micro”
level at the same time staying in the “micro” universe and collaborative. All actions will be
driving all together but the data base can be share.
Below demonstrates the schema, where we can identify all the numeric tools
necessary in the SCM.We can see in this diagram, all different levels: strategic, tactic,
operational, transactional. All tools or software had the goal of integration, it means to
move forward all actions such as
buying, producing, storage, delivery
and sales. The time’s concept
appeared on the right and is also
important, because it shows the
reactivity as a whole.
At this time when the
company grows constantly in a mass
personalized environment. Playing
with all the active partners, the
collaboration is a key aspect of this new strategic system. The actual technology helps to
create a “real time” in the network. The company needs nothing more to become adaptive.
Scheme 4: systemic approach of ICT
Scheme 5: time conceptmodel

32
d) Logistic network: adaptive thanks to ICT
Below is one tab which explains the development between traditional supply chain and
an adaptive one:
Characteristic Traditional SC Adaptive SC
Information spread Sequential and low Parallel and dynamic
Planning Days/weeks Hours/days
Planning’s characteristic per lots dynamic
Time of reaction Days/hours Hours/minutes
Analytical app’s Historic On time
Suppliers characteristic Cost/delivery Network capacity
Control Centralized Distribute
Exceptional events Centralized/manual Distribute/automatized
Integration Punctual and autonomous Intra/inter companies
Tab 1: traditional vs adaptive
The SC’s adaptive is a result of the all historic outline in this report.
e) Conclusion of Simple logistics to the supply chain: a complex
system.
In the actual market which is in process of far-reaching change, the companies
faced mass-fusion and geographical expansions. These new processes were due to
globalization. All companies won in capacity and complexity. The adaptation system is not
a possibility anymore, as it became an obligation. The exceptional events revealed all
breaches in the system. At this point, few examples faced the fragility of the global
economy based on “pull flow” and “just-in-time” systems, which means an organization
without flaw. These new standards based on a strong demand’s anticipation, which help
a better and faster reactivity of the market.

33
Thanks to the internet, the information browses around the world, all companies
can be more flexible and adapt themselves to the environment (adaptive supply chain
networks).
These networks have the functions of transparency, linking all planning operations,
supplying, fabrication and distribution to all internal/external partners. They need to offer
a snapshot view of the all network and helping to take decisions ultra-faster.
5. SME29
s to a multinationalfirms
The supply chain is a coalition between autonomous organizations which is coordinated
by the integrated logistic process. Another piece of literature can help to distinguish two
types of supply chains: SME and multinational. Seven criterions will be used:
- Principal stakeholders
- Character of the power and mechanism of regulation
- Character of the information trading
- Value sharing
- Character of the logistics process
- Character of the business model
- Capacity to be over seas
We will distinguish two types of supply chain, applying these different criterions:
1. Multinational: Large organization, organized its logistics’ network by outsourcing
few logistic processes and integrated one galaxy of subcontractors which are
navigated around the parent company. In this type, few SMEs can be present in
the network.
2. SME: the network is based on many companies which share similar criterions and
constraints.
29
SME: small and medium enterprise

34
See below this tab outlining the different criterions
Multinational SME
Principal
stakeholders
Parent company/
subsidiaries/subcontractors
SME federation helps
to create the network
Character of the
power and
mechanism of
regulation
Decision power of the
parent company. contracts
implicit contracts
Information trading
EDI, nomenclature,
integrated logistics
processes
Informal exchange
Value sharing
Absorbed by the parent
company and then
distribute
Value negotiate and
share between
partners
Character of the
logistics process
Pull flow, standardized
process, integration and
using of information
techniques
Relational proximity,
supply chain informal
and reactivity thanks
to partners
Character of the
business model
Complex, large distance,
multinational organization
Closed geographical
organization, more
trust and experiences
Capacity to be over
sea
Strong capacity (economic
reasons)
Varied and contextual
Tab 2: Multinational vs SME
In an SME system, two types of organizations can appear:
 SME pivot: polycentric network; one SME can federate few other partners and
integrated them in its supply chain.
 multi-organizational: multi-activities without a SME pivot. The pivot is not the only
factors in a SCM.
However, a supply chain in a SME system can be delicate. A strong economic
intelligence is necessary to help a strong relationship between SME. In a collaborative
project, a sharing of knowledge and a relative transparency are more than essential.
There is a possibility of assets looting and misusing the collaboration.
According to Ernst & Young (2005); “While we have identified a strong relationship
between the size of a company and its WC performance, there are many other factors
that can have an impact.

35
These include the size of the company in relation to its customers and suppliers; the
availability of alternative sources of offer and supply; the choice of commercial,
manufacturing and logistics strategies and the subsequent trade-offs between cash, cost
and service; and the degree of management focus on cash and process efficiency.
These factors mean the relationship between size and WC performance is not
always direct and linear. The benefits of size may also vary according to the level of
sales, with rising or diminishing effects below or beyond certain thresholds.”
III. Study case ABB
A. Field analysis
We have learnt many theories on the supply chain management and its
consequences on the company. We will compare all the theoretical aspects with the
practice. To do this analysis we have done some qualitative surveys. Our next step was
to collect a large amount of information in order to know how companies deal with stock
issues. Some theories are indeed quite recent, such as an implantation of a supply chain
management. There are always gaps between theory and practice. The objective is to
understand how stock can decrease and with which methods.
The reason I selected each of my interviewees was to have a global view linked to
each stakeholder. I wanted to have the opinion of another company to understand their
strategies and their consequences.
All my surveys, internal and external are based on semi structured interviews. I
would like to have different elements from different contexts in order to compare them.
Some enquiries are open-ended questions, so I can conduct a deeper analysis. In addition
to these interviews, I met some different stakeholders to improve my understanding on
the topic.

36
B. The method of selection
1. Internalinterviews
a) Logistic Engineering Manager
Lucile TIXIER is the person who manages the field of engineering dedicated to the
scientific organization for the purchase, transport, storage, distribution, and warehousing
of materials and finished goods. She analyses different strategies in order to reduce cost
and increase efficiency in the warehouse and with our suppliers. She created the logistic
engineering department three years ago. She had the background necessary regarding
stock analysis.
Carole MASTROMARINO is the person in charge of all the logistics in the warehouse.
She is taking care of all deliveries and the storage house.
b) LSO: Local Sustainability Officer
Marie-Georges LESNE is the person responsible for both planning and implementing a
local government's sustainability program. She is promoting education and awareness of
sustainability within the local government. She is managing sustainable activities such
as recycling, energy efficiency, and water conservation. Marie-Georges is in charge of the
calculation carbon balance. I need her opinion regarding carbon balance for ideas I will
prescribe in the future.
c) Value Chain Manager
Davide ERBA is in charge of all the value chain management concerning electric
power in Lyon, Polska, Germany and Bulgaria. He coordinates the 4 main functions
(Purchase/internal logistic/ INGLOG/planning) and deploys the ABB’s strategy
within functions.

37
2. External interviews
a) DHL: Commercial manager in Rhone-Alpes
Coralie Blanc is our contact in DHL for local transportation. It was important for me
to have her opinion regarding the setting up of the shuttles. My main project of this
year, was to create shuttle line between our Italian suppliers and ABB Chassieu and ABB
Lebork. Mme Blanc helped me on this project, her opinion was to see what is happening
on the other side of the project.
b) Bayer: Planner assistant
Alexis Brancourt is the planner’s assistant in Bayer. He is in charge of the packaging
and raw material procurement. He manages projects such as work methods in the
procurement department in order to improve them. His duties are to reduce stock
and set up logistic process.
C. Interview guide
In this chapter I will develop what my survey goals are and why. I will be more focused
on one questionnaire because the answers from Davide Erba helped me during the
following chapter.
1. Goal of my questionnaires
a) Value Chain manager: supply chain

38
I wanted to interview Mr Erba in order to have a global view on the SCM. He is the
direct link between Chassieu and the group in Zurich. My goal was to analyze some
current problems as well as how a SCM manager solved it. During our two hour talk, he
explained to me the theoretical aspect of the SC and how it compares to what is being
implemented in ABB.
In order to analyze how the supply chain management is working, I interviewed my
Supply Chain Manager. All these questions were focusing on the supply chain, what is
this position and what are the main functions. I had the opportunity to understand how
ABB organizes its supply chain management, in fact it is related to suppliers, capacities,
deliveries, logistics within line chain.
The main risk in a SCM is the stock. Stock is a concept more than a management.
This point will be useful for my advice. Mr Erba explained to me what kind of tools can be
used like SAP, ICBK. I had a deep conversation with him which enabled me to make a
strong analysis about creation of statistics and reporting. He shared his knowledge with
me on how you can manage your department according to these KPIs and how actions
can be managed.
To conclude this part, I had the opportunity to understand how supply chain
management can become a value chain. All this information I gained from what my
interviewees said will be helpful to write my recommendations and critically analyze
previous theories.
b) Logistic Engineering Manager/Logistic Manager: stock
My goal in these surveys was to analyze how ABB and Bayer manage their stocks.
Thanks to this interview, I had an overview of all the stock management in both
companies. It was interesting to understand what the current actions in ABB and
Chassieu.

39
The main risk in a company is how they manage their stock. Every question in
these surveys are related on stock management. The idea was to analyze the risks and
the consequences. These interviews helped me to have an idea about my future advice.
Mme Tixier and Mr Brancourt gave me an easy definition of stock. This definition
is the foundation of my interview. The stock management can be different for each
company. This is why I decided to interview the two big groups to understand and analyze
how these companies approach stock. But for both, the need is to optimize merchandise
and reduce costs.
c) LSO: Local Sustainability Officer: Carbon report
The carbon foot print is an important rate in ABB. The company wants to reduce
their stocks without damage the environment. Thanks to this interview, I wanted to know,
who main stakeholders are, and what the result is if the value is too high.
This interview helped me to consider this point in my future advises because the
green label is more and more important in our economic context. Thanks to this interview,
I had data from carbon saving.
d) DHL: milk run
DHL is our transporter in ABB Chassieu. My idea was to interview the person in
charge of our account. Thanks to this, I had the opportunity to have a deeper vision of the
transport.
This interview helped me to consolidate my advice. I wanted to have information
about milk run shuttle. The principle results in balanced utilization during the course of the
day and enables safety stocks to be reduced.

40
2. Conclusion
In this field study, we have discovered ABB environment. Thanks to all these
interviews, I had a global vision about different topics: Supply chain, stock, milk run and
carbon report. I wanted to have information, in order to have some better ideas on my
future advices. This was beneficial. It was interesting to investigate these issues.
I have noted that it was necessary to ABB, to manage their teams in order to
develop the strategies according to their business model. The company needs to adapt
its strategy to the environment and to the demand. Constant changes are needed in order
to be more efficient.
D. Theory versus practice
1. Supplychain management
a) Supply chain vs value chain
The difference between the two types of managements are is that a supply chain
is the process of all parties involved in fulfilling a customer request, while a value chain is
a set of interrelated activities a company uses to create a competitive advantage.
Theoretical aspect of the supply chain does not include all indicators. In fact, it is
everything related to suppliers, capacities, deliveries, logistics, within a product line chain.
Originally, the SCM is an approach by the value. This procedure needs to be managed by
the creation of resources. Through this theory, it cannot exist one unique model, the SCM
is a pluri-model. It does not have a huge gap between theories and practices.
The bigger one is the Wilson equation, in fact, it is based on a push flow. It is a
traditional method for determining the order or production quantity if you know the total
consumption during a period of time. This method born during the year 70s and became
obsolete since the last decade. This equation was based on a stable market, with a fix
procurement period. Now, the market is uncertain and the demand is versatile. The

41
appropriate method is more of a pull flow system. The customer’s demand pulls the
orders.
Ohio system is driving flows by a Kanban process. This system is still often used in
the industry. He based his theory on an unstable environment, which is followed perfectly
by the demand. Companies need to adapt themselves to the demand. This means, if the
demand mutates, we must mutate with; otherwise, the company will be pushed out of the
market (loss of liquidity and customer). According to Davide Erba, an adaptive business
model is the common rule of all these theories. For example, we must have a correct
segmentation, for better management:
High runner (20% => 80% of the turnover)
o Make to stock (3-5 days)
Medium runner
o Mix management
Low or very low runner (specific pieces)
o Make to order (no stock)
b) Conclusion
The supply chain management need to have a human behavior approach. The
management is not anymore a « top-down » process: the boss orders and collaborators
execute. The supply chain manager has his own specialists who are managers of others.
He has a new role: coach in his team. This new management is more fulfilling for the
collaborators, because they are in charge of more duties and can be proposal source.

42
2. Stock
a) Over-stocking vs stock out
“Over stock and stock out can be fatal for a company but it is not a fate”. According
Lucile Tixier, the main problem in industrial companies is to treat stock in a mechanical
method and not in a structural study. How you are managing your stock is how you are
managing your finance. A lot of indicators need to be considered. The idea of stock is so
familiar that we are not thinking which over-stock or stock out can be a risk. The flow result
reach by the SCM is linked to the stock performance. The level of this performance can
be calculated on five parameters:
 Commercial delays
 Uncertainly demand
 Service rate
 Launch cost (packaging unit)
 Obtaining delays
An efficient stock management is an important tool. In the theory, stock is the number
of pieces in a warehouse. In a practice for few years, stock became a concept and it is
inside the KP30I process. There are two processes in the stock management:
 Based on the order
 Based on the market
For the first one, in order to produce, you are waiting for the order. There is no stock
and the delay is longer. There is no notion of stock but it is more a “production-line”
concept. Otherwise, you can base your stock according to the market. Stock is being
created and you anticipate the demand; it is closer to the reality. Stock management will
depend on the company’s strategies and business model. It is important to find a balance
between the two management styles.
30
KPI : key performance indicators

43
Over stocking is expensive, but the company can answer faster to the demand; and
keep its competitive advantage, on the other hand; having a small stock can be a risk. If
the market faced a spike in demand, the company will not be able to answer rapidly and
some extra costs such as transport express or extra hour will be applicable. To conclude,
this punctual extra-cost should be cheaper than an annual over-stock.
b) Conclusion
To conclude this chapter and according my different interviews, a bad stock
management can be destructive. Bayer or ABB are managed their stock according to their
own strategies. The theory and the practice are quite similar. Nothing has changed since
the last decade, stocks are still risky for the company and the impact is direct on the
company’s financial snapshot.
What can be vary stock?
 Reliability of the production machines (broken, break down)
 Reliability of the suppliers (ROTD/AOTD)
 Variation of the raw material (trading on precious raw material)
3. KPI
a) Measure of the efficiency
The key performance indicators contribute to measure the company efficiency. These
indicators help to make long and short term strategies. It can be helpful to understand how
these indicators can have a direct impact on the supply chain management and how it is
linked to a financial aspect.

44
The supply chain management acts on the OCF31 optimization, form the purchase to the
expedition.
OCF :
 Days of payment
 Difference in the stock (ITO)
 Days to be paid by customers
The principal lever in a macro sphere in the NWC32, this financial indicator is part of
the purchase process: shorter supplier delay, small packaging unit, consignment). The
main idea of this concept is buying as late as possible with the correct packaging unit.
This concept will ensue a good ITO33 with a reduction of the obsolescence which impacts
the profit and loss account. The supply chain management has an impact on the EBITA34,
because all the actions, the SCM set up will have a result on the EBITA. Precise actions
are linked to macro and micro management.
b) Conclusion
To conclude, these three main indicators are part of the KPI process. For twenty years
with the creation of the Supply Chain, financial indicators are integrated in different
departments: purchase, logistic, planner. The practice follows the theory because it is a
new process.
31
OCF: operational cash flow
32
NWC : net working capital
33
ITO: Inventory turnover
34
EBITA: Earnings Before InterestTaxes and Amortization

45
IV. Advice
A. Focus on ABB
ABB is focusing on NWC to ensure a healthy cash-flow. Cash flow is to a company
what blood is to us. Without it there is no future. NWC initiative loosens up tied up cash in
the company for healthier operation. Additionally, lower NWC makes ABB more
competitive and appealing to investors. For ABB, the main objective is to decrease NWC
and stock but increase OCF. In this following part, I will develop what actions ABB set up
to reach its ends.
Otherwise ABB is a huge group, my participation in all these managements is tiny.
I implement logistics protocol in order to reduce MOQ35, lead time and stocks.
1. Logistics protocol
Logistics protocol is a contract between the supplier and ABB. The objective is to
formalize several points:
- Permit ABB France to deliver their products on time to its clients thanks to the
reliability from the supplier.
- Permit the supplier to gain on service rate towards ABB (delivery conformity)
- Permit to both sides to control frameworks in an economic way
This contract permits to agree on criterions between ABBand suppliers. The main goal
of this contract is to submit reliable relationship between the two parts.
In the first step, strategic suppliers were targeted (big value or quantity). The listing of
these objectives proves the importance of the organization. It creates a synergy which
permits them to run together and to erase the hazard from the supplier to the final client.
35
MOQ : Minimum order quantity

46
This document is standard but each supplier can negotiate terms of the contract. The
objective is to find a stable situation and a long term relationship.
My contribution to this project was to develop protocol logistic in all my portfolio. I had
to renew contracts in order to reduce MOQ, lead time and adding new references. I have
to negotiate directly with people every-time when I have a renewal, it Is not a list that I
have to refresh. This action demands a really persuasive force because the group asks
us to reduce the packaging unit or the minimum order quantity. This constant objective
has a direct impact on the supplier’s organization: the need to create stock in order to be
flexible and responsive. This mission is a partnership work. If the supplier is reluctant,
ABB engages itself to take back supplier’s stock. ABB allows all discussions to solve
troubles in order to achieve our goals.
The department is a new service, and it was difficult to link the image of the
department, the supplier’s comprehension and the purchase objectives. It was important
for me to create a balance between objective and results.
2. Stock
During my first year, I had the opportunity to set up some actions such as protocol
logistics, consignment, Kanban process in order to reduce stocks. The main risk in the
company is to have a high stock level. In 2014, we had a global stock of more than €50
million, for some components, we have a stock coverage of more than one year. The
company wanted to decrease the stock of €18 million in the next year. The objective in
2014 was to have a stock less than €38 million.
The “ABB next level” plan helped to reduce stock but it was not enough. Since the
beginning of 2016, we have a stock coverage of two months. In fact supposed to be three
weeks covert because we are delivering to our clients in five days. In a theoretical
Revenue
Stock value 23 16,31% 16 11,51%
Obsolescence 6 4,26% 6 4,32%
nb: number in million of euros
2015 2016
141 139 Diagram 2:total revenue and stock level- numbers in million

47
economy, a company needs to have a stock of 10% of its total revenue. To fight against
these over-stockings, ABB relocated its production sites in Polka or Czech Republic. This
choice was to reduce external and internal costs. Every month, the group consolidates
financial data with customized program: ICBK. The target of this program is to have the
same source around the World. This reporting tools is creating statistics, helping to have
an overview of each hub and pointing target and forecast. It is easier for the group to
discrepancies with the targets.
I had to pilot the transfer of knowledge and logistics process in Polka thanks to
tools such as ICBK and KPI.
ABB creates value though a new supply chain management process. The strategy
is to have a profitable growth (supplier performance), a relentless execution (cost
reduction) and a business-led collaboration (Suppliers involve in R&D/Design). The SCM
center concept has three main pillars:
Commercial/sourcing management
Business partner/ client interaction
Delivery
Roles and responsibilities are definite, in order to increase the efficiency of the
company in maximum. ABB is recognized as industry leader inSupply Chain Management
by suppliers and stakeholders. The company adapted to its business model with a
constant renewal of its KPI. They make long and short terms actions.
B. Recommendation
The facts
Wave effect in the material planning
Long Lead time from suppliers (Average of 47 weeks)
High Minimum order quantity (Minimum lot > 1 month of consumption)

48
Consequences
ITO too high: around 2,5 months
Supplier business model is no more align with new SCM ABB France strategy
1. Milk Run
What is a milk run shuttle?
According to the business
dictionary; milk run is Delivery method
for mixed loads from different
suppliers. Instead of each supplier
sending a vehicle every week to meet
the weekly needs of a customer, one
vehicle visits each supplier on a daily
basis and picks up deliveries for that
customer.
The milk run has a lot of advantages:
 Saving money on the transportation
 Decreasing the environmental impact
 Gain on purchase price
 Cost control
Implementation


Scheme 6: Milk run process

49
I figured out that we have a lot of suppliers in the North of Italia, the idea was to
create a route from the farthest supplier to ABB Chassieu.
The important points were to reduce stock and save money on cost transportation.
The purchase cost on this project could be reduced 11%. In fact, if we appealed a
transporter to manage the tour. Our suppliers cannot bill to us the transportation cost, so
we have a direct reduction. The indirect saving will be on the gross saving (€59K).
To conclude, more than the only purchase cost reduction, this project permits to
win in reception security: less handling, less truck arrivals and smooth in the workload.
The flow will be defined and unique for several suppliers. A new essential gain is the
carbon foot print. The company need to report its carbon foot print. With the shuttle, ABB
Chassieu can reduce its Carbon report of more than 40%. It is most important that this
project does not add expenses to the group (time/money) and not increase ABB’s
responsibilities. For example, during the loading and unloading.
Scheme 7: Italy Milk Run tour

50
2. Kanban
Kanban system ensures a controlled inventory level in the Production Process and
contributes a lot to implementing the Lean Manufacturing System on the Shop Floor.
Kanban system works as a Pull Production System, where a signal gets generated which
gives a trigger to the upstream process to serve the downstream. We should replace
actual MRP management by KANBAN, thanks to this process, a pull flow system will be
observed. Orders are generated by consumption.
Prerequisite:
 Items analysis: cost, volume, consumption
 Supplier negotiation: delivery procurement and storage methods
 ASCC access: the supplier needs to have access to this web portal. Thanks to
ASCC, the supplier will be able to visualize forecast and the monthly consumption.
 Sharing information with the storage manager: number of card, packaging unit
We need to calculate the number of cards according to the daily consumption36.
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑎𝑟𝑑 =
𝐶𝑀𝐽 × 𝑑𝑒𝑙𝑖𝑒𝑣𝑟𝑦 𝑡𝑖𝑚𝑒
𝑃𝑎𝑐𝑘𝑎𝑔𝑖𝑛𝑔 𝑢𝑛𝑖𝑡
+ 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑦 𝑠𝑡𝑜𝑐𝑘
36
Daily consumption:CMJ
Scheme 8: Kanban cycle,SAP vision

51
See bellow an example of direct gain, procurement Kanban flow has a direct impact
on the direct cost in a logistic process inChassieu. The trend is to create Line-side Kanban
(when the stock is under the minimum quantity, an order is directly send to our supplier).
Supplier X
Stock
02/2016
Stock
03/2016
Stock
04/2016
Stock
𝒙̅
P.U.
Valorisation
Stock
Order
placement
cost
Time to
send an
order
Montly
potential
gain
Item X1 5600 10000 6000 7200 0,04€ 288€ 13€/h
10min, 4
fois / mois
300€
Item X2 2000 1000 1200 1400 0,11€ 154€ 13€/h
17min, 2
fois/ mois
170€
Item X3 500 440 700 547 9€ 4923€ 14€/h
25min, 2
fois / Mois
4935€
Tab 3: kanban gain example
Thanks to this tab, it shows how the gain can be on short term.
3. Consignment
It’s making available a stock by the
supplier for the client and at the client’s chosen
location (a production site for example). The
reception is done with SAP using a purchase
order (not valued). The stock is marked as
« consignment » in our SAP system. Billing
occurs only after the components are taken out
of the consignment stock.
The supplier is the only planner of its
stock. ABB can pick up boxes or pallet in order
to its consumption. The supplier replenishs the
stock when the minimum quantity appears.
The requirements according this methods is:
FLOW ACTIONS WHO
Input of goods in the
consignment stock
Supplier delivery
( Open order ).
Supplier/ ABB's reception
Consumption of goods
Output of raw material
( Kanban …) Code 411K and code Z11K
ABB's workshop
Ordinance of the
consignment stock
Use of the information available on the
"ASCC" portal by the supplier
( Stock and outward movement of goods ).
Supplier
Billing
Impression of the bill.
( The supplier must provide the serial
number of the document on is bills …. )
Supplier
ABB's accounting department : Use of
transaction " MRKO "or other to verify the
invoices sent by the supplier.
ABB's accounting
department
Analysis if they do not
match
If they do not match :Validation by
pruchaser/procurement department.
Then retour to ABB's accounting
department.
Work flow : " Basware Invoice "
ABB's accounting
department and procument
department
Payment Payment of the invoice
ABB's accounting
department
Scheme 9: consignmentflow

52
 Analysis of the products (Cost, Volume, Consumption…).
 Negotiation with the Supplier (to define the delivery method, the stock method…).
 Giving the supplier access to the ASCC portal.
 (Mandatory for the supplier, as it is the only way to know the level of stock and to
gather the necessary billing information).
Taking this example: the supplier delivers one full truck of the item XY, it means 33
pallets of 1000 pieces. We received 33 000 pieces, 2 times/month. We have a monthly
consumption of 66 000 pieces. We consider the transportation cost of €250 per full truck,
so €1000 per month.
ABB or the supplier are winners because the supplier does not have handling or
storage costs because items are stored in ABB site. ABB China has 30% of its total
order in consignment and ABB Chassieu only 3%. In my opinion, we should develop this
process because it impacts the direct cost reductions
V. Conclusion
First of all, concerning external procurement, my mission was to negotiate with
international suppliers in order to create a milk run process. I had to develop the ideas of
consignment and Kanban in consideration of reducing direct costs and stock. The
Purchase department was very helpful to reach that goal.
Alternatively, the internal management was to create and analyze Kanban loops or
recalculate consignment data. This support function needs to be accompanied by the
planning department. I had to have a deep perception of internal flows.
Supplier X
Stock
𝒙̅
consumption P.U.
Valorisation
Stock 𝒙̅
Order
placement
cost
Temps pour
commande
Time to send
an order
Montly
potential
gain
item XY 40000 66000 9€ 360000€ 14€/h
25min, 2 fois /
Mois
1000 361014€
Tab 4: consignmentgain example

53
After having a clear vision and knowledge of my mission. I am able to answer to
the problem of this report: “How to create value for ABB through a supply chain
management process and what could be its impact on company's profitability?”
ABB develops its process management every three years. They are constantly
analyzing where the problems are and how they can solve it. During this report, I
discovered the market dimensions in the industry and precisely in our products: sensors,
contactors and terminal blocks. ABB invests a lot in the R&D, to keep its competitive
advantage. ABB decided to use a value chain management instead of supply chain
management. The main idea of this project was to be closer to its customers and
suppliers. Thanks to this management, the demand is local and the offer is faster. Some
indicators, such as KPI, EBIT or ITO prove that ABB is still the leader in the world electric
industry.
That raises the question of the possibility for the company to engage customers,
employees, suppliers, business partners and communities to create innovative solutions
to some of the world’s challenges such as the corporate social responsibility?

54
VI. Works cited
Web:
http://business.lesechos.fr/
http://www.iseor.com/ (Institut de Socio-Economie des Entreprises et des
Organisations)
http://www.supplychainmagazine.fr/
http://www.lemonde.fr/economie/
http://www.finyear.com/
http://cpp.hec.ca/ (logistique et productivité des entreprises – HEC Montréal –
Martin Beaulieu & Jacques Roy)
http://campus.hesge.ch/ (Haute Ecole de Gestion Economique de Genève)
http://www.anact.fr/ (Agence Nationale pour l’Amélioration des Conditions de
Travail)
http://www.abb.inside.com
http://www.businessdictionary.com/definition/milk-run.html#ixzz49fbenrJo
http://www.investopedia.com/ask/answers/043015/what-difference-between-
value-chain-and-supply-chain.asp
Bibliography:
Logistics and Supply Chain Management – Professeur Martin Christopher –
Fourth Edition
Supply Chain Management portée et limites - Thomas ZEROUAL, Corinne
BLANQUART, Valentina CARBONE
La Logistique globale et le Supply Chain Management – Philippe Pierre Dornier
& Michel Fender – Eyrolles Editions d’organisation
Management industriel et logistique, Conception et pilotage de la supply chain
5ème édition-Gérard Baglin- Economica

55
Kanban. Just-in-time at Toyota – Collectif Editeur Productivity Press
Cours Comptabilité Analytique, Logistique Industrielle, Logistique de distribution,
Economie – DUT Q.L.I.O / License Professionnelle Lean Manufacturing.
Documents formations internes ABB France – Service Supply Chain
The journal of finance Vol XLVIII, no.3 July 1993 – the modern industrial
revolution, Exit, and the failure of internal control systems-Michael C. JENSEN
Interviews:
ABB Chassieu
o Lucile Tixier : Logistic Engineering manager
o Davide Erba : Value Chain manager
o Carole Mastromarino : Logistic manager
o Marie-Georges Lesne : Local Sustainability Officer
o Jean Noel Chavanel : LBU controller
o Matthias Cuomo : production planner
Bayer
o Alexis Brancourt : Planner assistant
DHL
o Coralie Blanc : Commercial responsable

56
A. Table des illustrations
Figure 1: Pioneering technology since 1883 _______________________________________________________________ 1
Figure 2: ABB's customer segments ______________________________________________________________________ 3
Figure 3: ABB's Revenues 2015 __________________________________________________________________________ 7
Figure 4: Sites in France________________________________________________________________________________ 10
Figure 5: worldwide production sites ____________________________________________________________________ 10
Figure 6: Plent site ____________________________________________________________________________________ 12
Figure 7: Chassieu site _________________________________________________________________________________ 13
Scheme 1: cost cascade ________________________________________________________________________________ 15
Scheme 2: cost division ________________________________________________________________________________ 16
Figure 8: Pull Flow System______________________________________________________________________________ 19
Figure 9: Matrix decomposition _________________________________________________________________________ 20
Figure 10: ABB's Kanban _______________________________________________________________________________ 23
Scheme 3: model management _________________________________________________________________________ 24
Figure 11: organizational view of modeling ______________________________________________________________ 24
diagram 1: Technology/strategy evolution _______________________________________________________________ 30
Figure 12: RFID system ________________________________________________________________________________ 30
Scheme 4: systemic approach of ICT _____________________________________________________________________ 31
Scheme 5: time concept model _________________________________________________________________________ 31
Tab 1: traditional vs adaptive___________________________________________________________________________ 32
Tab 2: Multinational vs SME ____________________________________________________________________________ 34
Figure 13: Central Europe Hub ___________________________________________________________________________ 4
Figure 14: ABB organization _____________________________________________________________________________ 5
Figure 15: ABB next level strategy ________________________________________________________________________ 5
Diagram 2: total revenue and stock level_________________________________________________________________ 46
Diagram 3: Inventory development 2014-2016 ___________________________________Error! Bookmark not defined.
Scheme 6: Milk run process ____________________________________________________________________________ 48
Scheme 7: Italy Milk Run tour___________________________________________________________________________ 49
Scheme 8: Kanban cycle, SAP vision _____________________________________________________________________ 50
Tab 3: kanban gain example____________________________________________________________________________ 51
Scheme 9: consignment flow ___________________________________________________________________________ 51
Tab 4: consignment gain example_______________________________________________________________________ 52
diagram 4: ABB France ________________________________________________________________________________ 59

57
Figure 17: Chassieu's products __________________________________________________________________________ 60
Figure 16: Low power range____________________________________________________________________________ 60

58
VII. Appendices
A. ABB organigram
Ulrich Spiesshofer
Directeur Général
Eric Elzvik
Directeur Financier
Diane de Saint Victor
Conseil Général
Jean Christophe Deslarzes
Directeur RH
Claudio Facchin
Division système
d’énergie
Bernhard Jucker
Division produit
énergie
Tarak Mehta
Division produit
basse tension
Pekka Tiitiner
Division discrete
automotion etmotion
Peter Terwiesch
Directeur Général

61
C. Interviews
1. QUESTIONNAIREDETERRAININTERNE (ABB)
A adresser à Lucile Tixier (responsable Ingénierie Logistique) et Carole
Mastromarino (responsable logistique)
Comment définiriez-vous la gestion de stock ?
C’est la quantité nécessaire minimale pour répondre à la demande sans être en
rupture.
Quelle est la méthode de gestion de stock en place actuellement (FIFO, LIFO, …) ?
Pourquoi ? Les résultats sont-ils satisfaisants ?
FIFO :
Cette méthode permet d’utiliser le produit le plus ancien entré en stock. Cela
évite que le produit reste trop longtemps en stock, qu’il s’abîme et par
conséquent, qu’il ne soit plus utilisable. Ce qui représenterait une perte financière
pour l’entreprise. Cela permet de garantir la traçabilité par date et d’être réactif
en cas de problème qualité pour blocage des lots
Est-elle la même pour tous les produits entreposés ? Si non, quelles sont les
différences ? Quels sont les critères pour les différencier ?
OUI
Y-a-t-il des dispositifs particuliers mis en place liés à la nature des
marchandises (raques, engins de manutention,…) ?
En fonction de la nature de la marchandise nous avons 2 types de zone pour la
marchandise standard (palettes, étagères, rotatif) des zones de stockage
sécurisées (armoire avec bac de rétention, armoire pour les produits
inflammables)
Comment sont déterminées la mise en place du stock de sécurité et la quantité sur les
produits ?

62
Les stocks sécurités sont calculés en fonction de la performance de livraison des
fournisseurs, et en fonction du mode de gestion de l’article (si géré sur prévision
ou sans prévision)
Quelles sont les avantages ou les axes d’améliorations selon vous en ce qui concerne la
diminution des stocks?
Les axes d’améliorations sont :
La réduction des minimums de commandes,
La réduction des délais de livraison
L’augmentation des fréquences de livraison
L’amélioration de la performance de livraison des fournisseurs
La mise en place de la consignation
La mise en place d’une gestion en flux tiré : Kanban
A adresser à Davide Erba (responsable Supply Chain)
How can you describe your job
Coordinate the 4 main functions (Purchase/internal logistic/ INGLOG/planning)
and to deploy the ABB’s strategy within functions.
 KPI “performance indicators”
 Saving on the purchasing
 Net inventory stock level
 ITO “roulement du stock”
 ROTD supplier
 Average LT supplier “short is better”
 Consignment stock on a total purchase value

63
2016: creation of a big HUB in central Europe: FR, PL, BG, CZ and DE/ following
slip between supply management and chain management. NOW, his focus is:
what is inside the chain.
What is the supply chain management in ABB?
It is everything related to suppliers, capacities, deliveries, logistics, within a
product line chain.
 Saving on the purchasing
 Net inventory stock level
 ITO “roulement du stock”
 ROTD supplier
 Average LT supplier “short is better”
 Consignment stock on a total purchase value
 Transportation cost
 Delivery cost
 Warehousing cost
What is the main “risk” in ABB on stock management?
Stock management cost (1€ stock takes 16% every year)
Stock is a concept and matters, it is more inside KPI “next level strategy”
Can be directly linked to EBIT
Phase in/out; market; stock out or obsolescence
What kind of tools are using in the SCM?
SAP, process: ICBK macro excel program develop by ABB tool of reporting, not
any manipulation. Target is to have the same source of data around the world. It
is a roll up of ICBK

64
Creation of statistics, overview of the global HUB. Pointing target and forecast.
Tool to analyze
What are the actions improve?
Actions is talking with the specialist; keep in mind KPI (key performance
indicators) target/goal
 Days of payment (IT: 120 days)
 Days to be paid by customers (FR: 45days)
How your manage your stocks is link to financial aspect;
Rules depend on business model.
Stock is no more an indicator now is the consequences of all the financial tools
ABB is moving to a value chain manager
A adresser à Jean Noel Chavanel (responsable contrôle de gestion)
Explication des KPI
SCM va agir sur l’optimisation du OCF, faire en sorte achat jusa expe, on
optimise les flux et on raccoursisse la chaine, notament sur les composent.
Principal levier (macro) : optimisation du NWC, optimisation du process achat
(delai FRS, consignation => acheter le plus tard possible et le bon lot.) et donc
optimisation des stock (ITO) => optimisation des stock, diminution nobsolescence
(impact compte de résultat)
La SCM à un impact sur les EBITA.
Tout les inidacatuerus sont suivis localement et au niveau de la direction. Ils
servent à mener des actions pour améliorer. KPI n’est pas en local.
KPIau niveau de supply chain sur quoi on agit

65
Gestion de la sous traitance (acumulation des stocks)
Partie RDC va aider a optimiser ces indicateurs.
La partie « pas de stock » objectif system de prod tres performant. (a la
commande clien) et non surstock mais du coups pas optimisation NWC.
Limitation du backlog (commande rentre elle doit sortir le plus rapidement
possible) sans jouer sur le stock de sécu sauf pour high runner
OCF:
 Days of payment
 Days to be paid by customers
ITO
NWC
Action precises: lien entre macro et micro: milk run/consignation
A adresser à Marie-Georges Lesne (responsable du développement durable)
Comment est calculé un bilan carbone ?
Pour réaliser le bilan des gaz à effet de serre, nous utilisons le logiciel Bilan
Carbone de l’association APCC (c’est le logiciel et la méthode créé par l’ADEME
et cédé à l’association APCC). Nous n’utilisons qu’une partie de ce logiciel
(limitation du type de données utilisées).
Devez-vous faire un rapport annuel et à qui (ABB, Institution externe)?
ABB Chassieu réalise un bilan des gaz à effet de serre tous les 3 ans comme
demandé par la réglementation (loi du 12/07/2010 – art L229-25 du code de
l’environnement). Ce bilan des gaz à effet de serre est fait pour l’entité ABB
France (entreprise de + de 500 salariés) : il est fait au niveau de chaque site et
est consolidé au niveau ABB France. Il est rendu public. Nous ne réalisons pas
de bilan carbone.

66
Quel est la réduction carbonique grâce à une navette Italie / Y’a-t-il un impact financier ?
(moins taxe etc)
En ce qui concerne la navette Italie, je te donne les éléments avant vendredi.
Aujourd’hui, la réalisation d’un bilan des gaz à effet de serre n’a pas d’impact
financier direct. L’impact qu’i y aura se fera au travers du plan d’action défini suite
à ce bilan. Pour Chassieu, ce sera plutôt le plan d’actions liés au diagnostic
énergétique imposé par la réglementation.
Hypothèses
Avant
Tous les trajets se font en 33t à raison de 1 trajet par semaine pour chaque fournisseur 1
seule livraison par semaine depuis DHL vers XPO et Chassieu en 19t
Retour à vide => pas d’info
Navette
Camion transporteur part d’Italie 1 x /sem => plateforme DHL de Vénissieux
Faire le bilan carbone
Km parcourus par tournée : 724 km (Manerba => Bonate => Vanzaggo => Tronzano =>
Cortiglione => None => Vénissieux)
Vénissieux => Genas : 15 km
Genas => Chassieu = 5 km
Type de camion : 1 * 33 t (26 t de charge utile = CU max)+ 1 porteur 19t (9t de CU max)
pour distrib locale
Gasoil
Pas de trajet du camion à vide (s’il en fait on ne le sait pas)
Tonnage transporté par trajet : 9,6 T
% de chargement du camion : 9,6/26=37% entre None et Vénissieux

67
% de chargement du camion au départ : 7,7%
9,6 T de DHL à XPO/CHI => =(9,6)/9=100%
Démarrage le 1 juin 2016
Vu que dans le cas de la navette comme dans le cas de l’ancien système, nous n’avons
aucune info sur le retour (à vide ? si non quelle quantité transportée et sur quelle distance),
nous considérerons le trajet aller seulement.
Origine km tonnes véhicule Taux remplissage (%
CU)
Manerba 562,3 2 33 =2/26 3,8
Bonate 473 1,5 33 =1,5/26 5,8
Robbiate 427 0,1 19 =0,1/26 0,4
Tronzano 351,5 2 19 =2/26 3,8
Cortiglione 372,2 0,8 19 =0,8/26 3,1
None 313,5 3,2 19 =3,2/26 12,31
Données calculées selon Bilan Carbone V7.4
Ancien
systèm
e
Navett
e
% de réduction
brut
hebdomadaire
% réduction en 2016 par rapport à 2015
Kg Eq
C par
semain
e aller
simple
962
(824 si
un seul
trajet
COME
PI =>
XPO)
274 =(962-
274)/962=71,5
2%
=((22*962)+(30*274))/(52*962)=(21164+8220)/500
24=58,74 => 100-58,74=41,26%

68
Par rapport à 2014, la mise en place de cette navette nous fera diminuer notre
empreinte carbone de 41,26% pour 2016 et de 71,52% pour 2017par rapport à l’ancien
système
2. QUESTIONNAIREDETERRAINEXTERNE
BAYER
A adresser à Alexis Brancourt (Planner assistant)
Quels sont les types de produits que vous stockés ?
 Produits dangereux que ce soit matières premières ou les produits finis.
 Produits phytosanitaires
Comment définiriez-vous la gestion du stock ?
La gestion de stock est le fait de gérer les marchandises dans les dépôts. Il est
nécessaire d’optimiser les produits sur les raques ou au sol (en cas de stockage
en travée). Cela consiste à l’optimisation des marchandises selon les
emplacements afin de stocker un maximum d’articles dans les meilleures
conditions en optimisant les coûts de stockage.
Quelles sont les actions que vous mettez en place pour diminuer les stocks ?
 Diminution des articles en slow moving (stock dormant) en suivant un processus
permettant d’optimiser les articles qui sont depuis plus de 220 jours en stock en
se basant sur les dates d’expiration des articles
 Adapter les niveaux de stock selon les demandes en production ou des clients
 Adapter les niveaux de stock de sécurité selon les périodes de l’année. Ceci est
important compte tenu de l’activité saisonnière de Bayer.
 Mettre à jour les nomenclatures au niveau des master data afin de mettre à jour
les valeurs car les quantités utilisées peuvent être différentes physiquement et
informatiquement
 Diminuer les tailles de lots de commande
 Se renseigner de la possibilité de stocker directement chez le fournisseur

LYON_BOCQUET_Justine_MP_2016

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