Setting up a new supply chain operation for a carve out in the chemicals sector during a global pandemic
This story is for executives who:
- Want a seamless transition as they stand up a carve out
- Need to quickly develop and implement a 100-day plan
- Want to work with a supply chain expert with a flexible onsite/offsite model to deliver accelerated results
The Challenge
This PE client needed specialist capabilities to support the rapid stand up of a carve out from a major chemical company. Based on our previous partnership with the PE firm when we delivered a fast and clean carve out in the pharmaceuticals sector, they turned to Maine Pointe as a proven, experienced partner.
A transition services agreement with the parent company was due to expire in six months. We had to deliver post-acquisition integration, stand up the new supply chain and, at the same time, conduct value creation activities before the agreement ended.
Throughout the engagement, Maine Pointe’s team worked in close partnership with the PE firm, who had made a significant investment; the parent company, who were providing temporary ‘life support’, and the new team at the fledgling organization.
A flexible onsite/offsite service delivery model
To deliver at pace, we conducted our analysis prior to the carve out. This positioned our teams to begin implementing a 100-day plan from day one of the new organization. Maine Pointe’s experienced SMEs recognized that an ‘off the shelf’ plan would not meet the needs of the new company which had a large number of new employees and little practical support from the parent company. In the initial phase of the engagement, our peopled bridged the gap while the onboarding process took place, providing boots on the ground to rapidly develop and implement the processes and operations for the new supply chain. At every stage, the plan was 100% customized to meet the specific organizational needs of the new entity.
Onsite delivery
- Created centers of excellence for workstream leads
- Deployed a rapid sales & operations planning (S&OP) process which was robust enough to support the new organization when COVID-19 hit
- Stood up procurement, logistics and operations processes from scratch
- Hosted ‘mini’ focus & alignment session to start the company on a path to developing its mission, vision & values
Offsite delivery
- Established remote cross-functional teams
- Conducted all value creation activities remotely, including RFPs and negotiations with suppliers
- Implemented roll-out of over 50 contracts with suppliers (remotely)
- Re-shored some of the supply chain to reduce risk
- Delivered training on our six-step procurement process
- Developed and negotiated best practice contracts
- Set up 3PL agreements and dashboards
- Achieved capital inventory reduction
- Enhanced real-time data capabilities for faster, more informed decision making
The Results
Despite the significant additional challenges created when the COVID-19 pandemic hit, Maine Pointe’s flexible onsite/offsite delivery model meant we were well-prepared to continue delivering results for our client:
- Stood up a new supply chain operation in under six months
- Did not lose any on-time shipment metrics and improved performance
- Reduced supply chain costs by 6% despite moving from a large-scale organization with buying power to a smaller company
- Developed and implemented a S&OP process which helped free up 15% of inventory to release $3M in cash. This helped the company navigate through the COVID-19 pandemic
- Delivered a project ROI of 6:1 in under eight months
Lessons learned for other executives
- You can stand up a new supply chain operation, stabilize it and drive value in times of crisis
- It is possible to rapidly implement a S&OP process concurrent with stand up activities
- You can de-risk the supply chain and improve sourcing optionality during a carve out