In the opinion of George Melendez, there should be only one true focus for anyone running a supply chain operation and that is to provide the overall organization with a competitive advantage. The form and manner in which that takes place, however, is both a science and an art. It requires reviewing each system and creating a tailored plan to achieve those goals. As the head of the global supply chain for the luxury personal care company Crabtree & Evelyn, Melendez is focused on just that.
Melendez says, “When making any investment in the supply chain, you have to look at it and ask, ‘Does it provide a major return on investment and residual contribution?’ In short, will it provide a competitive advantage for the organization?”
Melendez, who has worked in various supply chains since 1982, joined the company two years ago, right in the middle of a major reevaluation.
“When I started with the company, they had already engaged with a consulting firm to review internal business processes,” Melendez explains. “The results of the review were presented outlining opportunities for improvement including some in the supply chain. We recognized addressing these areas of opportunity would benefit our competitive advantage.”
In the consumer goods industry it’s all about time to market. How quickly a company can develop and introduce a new product is critical.
“For the most part, this organization introduces an average of three or four multiple SKU projects into the market each month, each of which have historically had an 18-month average project development cycle,” Melendez says. “You can imagine how busy our calendar is. When we reviewed our processes, we knew reducing the project development cycle time was the area we needed to focus on as the first key area to provide Crabtree & Evelyn with an improved competitive advantage.”
The goal was to reduce the company’s 18-month development cycle to one with a 16-month maximum with a separate “rapid deployment” timeline planned for projects that needed to get to market quickly. Internally, Crabtree & Evelyn developed two standardized models. Its rapid deployment model allows it to achieve a condensed 10- to 12-month project development cycle while its enhanced model allows it to develop more complex product ranges within a cycle no longer than 16 months.
“One key to maintaining this goal is our suppliers,” Melendez says. “They play a leading role in the development process. We depend on them to turn around components within this shortened product development cycle. Our suppliers work with us to identify opportunities related to the individual product components or within the design process to reduce overall lead times. Lead time reductions allow us to consistently meet the new condensed product development cycle times.”
Communication is Key
Knowing that, Melendez says better communication and better planning within the company and with suppliers is key. One of the investments the company made on this supply chain journey was in infrastructure to facilitate information sharing across the supply chain structure. “We recently implemented a solution to improve communications internally and with our suppliers,” Melendez says. “It’s a collaborative infrastructure to facilitate communication, the exchange of information and open collaboration called Box.com.”
Melendez explains the tool as being something like Facebook for data. Crabtree & Evelyn can create a list of users (including suppliers) and give them access to pertinent folders within the system. Those suppliers can log in and download or upload any necessary information and even comment on the shared information just like a Facebook status update. When new information is made available, the users receive a notification in real time prompting them to go and check the status of the information pertinent to them.
“They can see the document, respond to the document and upload any new information and send it to the department it needs to go to,” Melendez says. “It could be for the procurement officer, quality control or accounting or any other function. It allows both parties to respond in real time and take action when needed.”
Manufacturing, too, has played its part in reducing time to market. In July 2013, Crabtree & Evelyn rolled out GMP and completed ISO 9001 certification at the Woodstock, Conn., facility. The company is now focused on perfecting its lean manufacturing processes.
Any change in the supply chain that leads to a competitive advantage in Crabtree & Evelyn is a job well done for Melendez and his team. Whether it’s improving communication, standardization of component inventory or mission-critical processes, the supply chain labors behind the scenes to ensure that Crabtree & Evelyn’s reputation as an international luxury brand remains well intact in the process.
“Our company enjoys a history based on heritage that we embrace as an organization. Our heritage sits at the core of every team at Crabtree & Evelyn,” Melendez explains. “We want to reinforce our position as a top luxury personal care brand.
“It’s very challenging to do things like collapse our development cycle without sacrificing the high standards we embody, but the process we use to review all the areas within the supply chain to maintain our brand while remaining competitive makes every day at Crabtree & Evelyn an opportunity to improve.”