Mitigating supply chain risk at Surat Basin Homes

casestudy-sbhThe substantial industrial and residential growth generated by a variety of resource projects including coal seam gas, solar, power and coal projects throughout the Surat Basin has necessitated the urgent need for Surat Basin Homes to improve supply chain risk management and capability.

Supply Chain Manager™ is powered by LSC Solutions Pty Ltd. This case study illustrates our proven past performance.

Surat Basin Homes is a residential building construction company based in Chinchilla, serving Australia-wide investors, corporations and home owners seeking residential properties and accommodation in Chinchilla, Miles and surrounding areas. The company is privately owned by five local community members with 81 years combined experience in the property sector who have strong ties and established credibility with clients, the regional workforce and suppliers. Surat Basin Homes has a demonstrated track record in delivering residential developments in the region and has the ability to innovatively custom build housing solutions within critical timeframes.

The substantial industrial and residential growth generated by a variety of resource projects including coal seam gas, solar, power and coal projects throughout the Surat Basin has necessitated the urgent need for Surat Basin Homes to improve supply chain risk management and capability. The company recognises the constraints and demands such growth opportunities place on its services and of the capacity of its suppliers and therefore sought the assistance of LSC Solutions Pty Ltd to:

  1. Improve supply chain risk management and capability to enable the company to cope with substantial business growth and achieve a sustainable competitive advantage by improving its supply chain reliability, responsiveness and cost management efficiency
  2. Address supply chain sustainability issues, capacity issues and capability issues by reviewing supply chain processes and functions and ensuring the company has the discipline and resources to deliver services on time and within budget over the long term
  3. Embed disciplines of supply chain excellence through staff training, coaching and performance management.

The following phases of the Supply Chain Excellence Program were completed:

  • Build Support for Supply Chain Improvement
  • Discover the Opportunity
  • Analyse Basis of Competition
  • Analyse & Design Material Flow
  • Analyse & Design Work & Information Flow
  • Review Business Operations & Systems
  • Plan Implementation: Supply Chain Strategy.

Supply Chain Excellence methodologies are based on LSC Solutions Pty Ltd’s adaptation of the SCOR® Model (APICS Supply Chain Council) and Supply Chain Excellence methodologies by Peter Bolstorff and Robert G. Rosenbaum, and LSC Solutions Pty Ltd.

As a result, the gross opportunity identified for Surat Basin Homes is $2.6M (absolute value) which is made up of additional revenue gains and cost savings that will be attained by implementing the following Supply Chain Strategy:

  • Identify and implement the most appropriate efficient Information & Communications Technology solution
  • Implement Collaborative Demand Planning
  • Implement Sales & Operations Planning
  • Improve Order Management
  • Establish a Strategic Sourcing & Procurement Function
  • Establish Strategic Supply Agreements for Materials, Labour and Supply & Install
  • Improve Purchasing Process
  • Improve Construction Process
  • Implement a Performance Measurement System including maintaining a Supply Chain Performance Scorecard
  • Manage end-to-end supply chain management long term
  • Implement a Project Management Workforce Culture.

Collectively, the strategies aim to address current process inefficiencies, planning issues, communication / notification issues, commence management by exception, and to build the supply chain capacity and capability of the company and its supply chains.

Furthermore, a potential spend savings of $5M in material, labour and supply/install costs were also identified – pending an increase in demand resulting from Industry – where strategic supply contracts would be negotiated to achieve these savings.

“The Supply Chain Excellence Program has been a valuable learning exercise for us. The strategies developed will significantly improve the efficiency of our operations and supply chain processes” – Jay Wilms, General Manager, Surat Basin Homes

Surat Basin Homes is located at 20 Inverai Road, Warrego Highway, Chinchilla QLD 4413, phone 1800 041 411, email: sales@suratbasinhomes.com.au, website: www.suratbasinhomes.com.au

For more information about this project, download the presentation: 5 Steps to achieving Supply Chain Excellence, that Sharyn Grant, Supply Chain Value Creator presented at the Queensland Supply Chain & Logistics Conference on 23-24 August 2012 at the Sofitel Hotel Brisbane. The 2012 Conference Theme was titled “5 Steps to Supply Chain Success”.

5 Steps to achieving Supply Chain Excellence

  1. Build support for supply chain improvement, profile your strategic position, segment market channels and prioritise supply chains.
  2. Research and identify the #1 strategic performance attribute (supply chain reliability, responsiveness, agility, cost or asset management) that your key target markets expect world’s best practice.
  3. Measure and critically analysepriority supply chain networks, operations, processes, material flow, technology and responsibilities, to identify risks, constraints, competitive performance gaps and improvement opportunities.
  4. Design and configurescalable, sustainable, efficient and safe supply chains and operations that will enable the achievement of world’s best practice in your #1 strategic performance attribute.
  5. Plan, execute and monitor your Supply Chain Strategy to transform supply chains and operations, and deliver best practice in customer service, cost control, and management of risk, relationships and knowledge.

By: Sharyn Grant - See all Posts by this Author