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Famosa S.A. Full Speed Supply Chain. Jorge León Bello__Master GEPS. The company. Company name: Famosa S.A. Location: Spain, Onil (Alicante) Product offered: Toy industry sector (games, dolls, soft toys, puzzles, toys for babies, etc.) Activity: Toy manufacturer and distribution company

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Famosa s a

Famosa S.A.

Full Speed Supply Chain

Jorge León Bello__Master GEPS


The company

The company

  • Company name: Famosa S.A.

  • Location: Spain, Onil (Alicante)

  • Product offered: Toy industry sector (games, dolls, soft toys, puzzles, toys for babies, etc.)

  • Activity: Toy manufacturer and distribution company

  • Two main production locations: China and Spain

  • Employees: 700

Jorge León Bello__Master GEPS


Logistics factors at famosa

Logistics factors at Famosa

  • Toys are strongly season products: sales are concentrated between 3 or 4 months.

  • Toys life cycles are very short: arrive at the sales point at the beginning of October and have become obsolete by the end of December.

  • Manufacturing process needs to be “stock to order” which implies high risks in stocking inventory.

  • Since China is its largest supplier and lead times are long, Famosa is dependent on the intensive use of forecasting.

Jorge León Bello__Master GEPS


Problem description

Problem Description

IMBALANCED SUPPLY CHAIN:

  • In 2003 the company could not deliver orders effectively due to stock outs, ignorance of the existence of orders, lack of warehouse management and control tools, etc.

Jorge León Bello__Master GEPS


Problem description1

Problem Description

  • Not structured production plan.

  • Operational and logistics costs were too high.

  • High level of capacity with huge semi-finished inventories.

  • Products suffered high rates of obsolescence.

  • Outsourcing in China used only as a source of components; products were still finished in Spain.

  • Production in Spain gave flexibility but incurred high cost inefficiency.

  • Distribution carried out from a single point only.

  • Dispatch of products packed loose, without using pallets.

Jorge León Bello__Master GEPS


The solution

The solution

REDESIGN OF THE SUPPLY CHAIN:

  • Changes in Organization and Information Technologies

  • Reactive planning processes

  • Collaborative planning with China

  • Total redesign of distribution network

Jorge León Bello__Master GEPS


Changes in organization and information technologies

Changes in Organization and Information Technologies

  • Creation of and independent organization to manage a global and integrated supply chain to became more agile and capable in decision making.

  • Integration of the procurement process into operation management moving from a simple price negotiation to negotiation of business rules.

  • Integration of the operations in China into the company’s operations management, to improve quality and the reliability of production planning.

Jorge León Bello__Master GEPS


Reactive planning processes

Reactive Planning Processes

  • The main objective was to reduce the variability of forecasting accuracy due to market uncertainty.

  • This involved the creation of a planning department and transformation of speculative capacity (which involved purchase orders to enlarge capacity which ignored customer demand) into reactive capacity (which is more reliable).

  • Adaptation of the supply chain to the production cycles of the suppliers in China.

Jorge León Bello__Master GEPS


Reactive planning processes1

Reactive Planning Processes

  • Lowering the lead time of products classified as very important, to permit product to be launched with significant changes implemented as late as possible.

  • Giving priority to launch products which have a lower impact if forecasting proves to be wrong.

  • Rewarding customers who confirm their purchasing intentions in advance.

Jorge León Bello__Master GEPS


Collaborative planning with china

Collaborative Planning with China

  • Famosa decided to produce 80% of its end product in China.

  • The company’s relationships with suppliers are close: Famosa carries out production planning, and negotiates a Master Production Schedule with its given supplier, which launch its on Material Requirements Planning.

  • Famosa has at its disposal the capacity necessary during peak seasons and is able to postpone loading through a more efficient planning and negotiations process.

Jorge León Bello__Master GEPS


Distribution network redesign

Distribution Network Redesign

IMPLEMENTATION OF CENTRAL AND REGIONAL DC´s:

  • Goods are dispatched direct from the DC in China to the market and to the central DC in Spain.

  • Some goods are also dispatched from Onil (Alicante) to important customers, and small orders from Madrid.

  • Famosa operates warehouses in all the principal European markets.

Jorge León Bello__Master GEPS


Distribution network redesign1

Distribution Network Redesign

CREATION OF A CONSOLIDATION CENTER IN CHINA:

  • The objective was to take advantage of logistics and fiscal benefits, including the potential of consolidating products from different suppliers.

  • The supply chain consolidation center is an export bonded warehouse.

Jorge León Bello__Master GEPS


Distribution network redesign2

Distribution Network Redesign

ADAPTATION OF LOGISTICS PROCESSES:

  • Adaptation of logistics processes to consumer goods sector standards: coding and labeling, Electronic Data Interchange EDI messages, barcodes and RFID in SAP and the use of pallets.

Jorge León Bello__Master GEPS


Famosa s a

Thanks for you attention!

Jorge León Bello__Master GEPS


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