International Music Company – Supply Chain Consolidation
The Situation
Our major music label client had recognised a need to transform their physical supply chain in response to current and predicted trends in the physical music market (CDs DVDs etc) but was struggling to make it happen quickly enough. As is often the case in established companies faced with transformational market led change, many people at all levels of the business were protective of the way things were and decisions were often made using the thinking of the past rather than the thinking needed for the future.
Our journey with this client started with helping to make the case for change and establish some momentum. We then went on to play a key role in the delivery, driving the changes in process, systems and people behaviour, working closely with the senior business and IT sponsors to ensure the change continued to align closely to strategic goals.
The project rolled out in phases: the first was to consolidate inventory operations and then the focus moved to key sales transaction flows, stripping out unnecessary cost and duplication from the core value stream. We’ve helped our client get to grips with the thorny issues of centralisation vs localisation and grapple with the emotive discussions surrounding changes to organisation and control. All this while navigating the many differences in culture, expectations and behaviour across the various countries involved.
Our Input
- Development of initial case for investment and continuing the dialogue throughout the process with the executive team and key stakeholders. The focus was on establishing and then maintaining the motivation to keep moving forward
- Developing a common future state process, starting with current state workshops in each affiliate company (one per country) to understand the differences that were fundamental to the market and therefore needed vs the old way of doing things. We then guided the development of the common process model with a clear end in mind
- Overall programme governance, ensuring the key stakeholders and executives remained aware of progress and were ready to support where needed
- Motivating and engaging the local project teams in each country, helping them to own the changes and supporting them with the planning and delivery
- Acting as a trusted guide and mentor to key executives throughout the process, especially through the trickier periods and in times of high change resistance
Outcomes
- Hard savings of multi-million pounds per year in cost avoidance through reduced obsolescence and, improved vendor pricing. While the project ran for four years, the full-cost of the project was recovered within the first year.
- Year-on-year reduction in the total cost of running the supply chain in the face of increasing price pressures due to reducing volumes and increasing product complexity.
- Positioned the client to take strategic decisions that would have previously been either unthinkable or at least very difficult and costly to execute.
- Subsequent supply chain projects were much simpler due to the reduced complexity of having one common process and system rather than six.
