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Transcript of Fiskars Presentation
Building a competitive and sustainable supply
network
Case Fiskars Tiina Nieminen 26.11.2012
Director Logistics, Fiskars Group
Agenda
Page 2 Company confidential
1. Introduction to Fiskars Group
2. Operations
3. Manufacturing
4. Sourcing and supplier base
5. Logistics
6. Processes and tools
7. Summary
Our over 360-year heritage From Finnish ironworks to global consumer product business
From Fiskars Village to Fiskars Campus
Fiskars Village
• Founded in 1649 as an
ironworks
• Centre for Finnish art, design,
and craftsmanship
• 20 Fiskars employees work in
the village
Page 4
Fiskars Campus
• Arabia factory, founded in 1873,
was named after the district
• Houses today over 450 Fiskars employees • Corporate headquarters
• Business area management: Home,
Garden EMEA & Boats
• Marketing and product development
• Arabia ceramics factory
• Shared Services
Page 5
1915 Fiskars is listed
on the Helsinki Stock
Exchange
1883 Fiskars becomes a joint
stock company and expands into
a number of new businesses
1967 A wide range of plastic
consumer products – iconic
orange-handled scissors
1985 Fiskars starts producing
garden tools
Fiskars has acquired several innovative companies to
enlarge its offering in consumer products
Page 6
2007 Iittala Group
1985 Gerber Legendary Blades
2007 Leborgne
Fiskars in 2011
Page 7
AMERICAS in 2011
net sales EUR 233 million
31% of consolidated net sales
565 personnel (FTE)
Manufacturing
Office
Sales office / distributor
Production units in Finland:
Helsinki, Iittala, Nuutajärvi,
Billnäs, Sorsakoski, Ähtäri
Portland
Outdoor/Gerber
Madison/Garden &
SOC
EMEA in 2011
net sales EUR 517million
69% of consolidated net sales
2,609 personnel (FTE)
Sourcing offices,
Bangkok &
Shanghai
Net sales EUR 742.5 million
Some 3,400 employees around the world
Products sold in over 60 countries
Our business areas
Page 8
GARDEN
Ergonomically designed
tools for gardening and
construction
294 MEUR in 2011, +7%
40% of total sales
HOME
Modern Scandinavian
design products for the
kitchen, table, living room
and school, office and craft
306 MEUR in 2011, -1%
41% of total sales
OUTDOOR
Innovative, essential
products for an active
lifestyle and durable leisure
boats
138 MEUR in 2011, +7%
19% of total sales
A portfolio of clearly defined brands
Page 9
Essential equipment
for outdoor activities
Key international brands
Leading global brand for
scissors and garden tools
Internationally renowned
design brand
Leading regional brands
Local and tactical brands
Finland’s most popular
motor boats
Finnish design for the home
for over 135 years
Nordic expert in
cookware & cutlery
DRIVE BOATS
EBERTSANKEY
GINGHER
HÖGANÄS KERAMIK
HØYANG-POLARIS
KAIMANO
KITCHEN DEVILS
LEBORGNE
MONTANA
RAADVAD
RÖRSTRAND
ZINCK-LYSBRO
Essential equipment
for outdoor activities
Pathway to global growth
Page 10
Tomorrow’s
Fiskars
2010 →
Powering the
machine
• Defining future
operating and
business model
• Unified processes
and systems in EMEA
• Focus and group-
wide integration
2012 →
Gearing for growth
• Global ambitions
• Refined category
and brand strategies
• New organization -
Tomorrow’s EMEA:
Design for Function
and Growth
2008–2009
Fixing the base
• New management
• Integrated consumer
goods company
strategy introduced
• First step towards
global growth: 360°
Integration Program
Executing the integrated company strategy
Page 11
FISKARS STRATEGIC
AGENDA
FOCUS Strong business area focus
Specialist premium brand portfolio
Optimized product range for selected
categories
EFFICIENCY Simplified structure
Integrated business processes
Demand-driven supply chain
GROWTH Consumer-focused product development
Innovative R&D
Commercial expansion
ACTIONS IN 2011
FOCUS Increased focus on international brands,
Silva divested and Bodanova discontinued
Continued SKU efficiency
EFFICIENCY Business platform investment program
launched in EMEA
Nordic distribution centre established in
Hämeenlinna
Global sourcing office established in Bangkok
GROWTH New market openings in Central Europe and
Asia for Home
Strengthened position in key markets for
Garden
Successful product launches boosted
Outdoor categories in the Americas
Implications to supply network
Page 12
Focus
Efficiency
Scalability
Shared, simplified structure, SKU’s
Harmonized processes
Growth
Agenda
Page 13 Company confidential
1. Introduction to Fiskars Group
2. Operations
3. Manufacturing
4. Sourcing and supplier base
5. Logistics
6. Processes and tools
7. Summary
Financial impact of Operations Cost of goods sold x% of sales / gross profit
Page 14
Product cost
Other COGS
Distribution
& warehousing,
freight,
Driven by manufacturing and
sourcing strategy
Driven by logistics strategy
Page 15 Company confidential
How can Operations contribute to margin
improvement?
1. Launch new products with targeted minimum margin requirement
• Increase modularization of the products
2. Strengthen the main brands -> Premium price
3. Build competitive supply network
4. Optimize warehouse locations and distribution cost
Margin improvement
Page 16 Company confidential
How can Operations contribute to working capital
improvement?
1. Increase stock turn
2. Increase sales responsibility of
the stock
• Forecast = commitment to sell
3. Reduce complexity (# stock
keeping units)
4. Implement S&OP (demand and
supply planning process)
Working Capital Improvement
16
Business level key performance indicators / operations
Page 17
Ambition
level
Inventory turnover
0
5
10
15
20
25
30
35
40
45 Ambition
level
Gross profit margin
Agenda
Page 18 Company confidential
1. Introduction to Fiskars Group
2. Operations
3. Manufacturing
4. Sourcing and supplier base
5. Logistics
6. Processes and tools
7. Summary
Page 19
EMEA manufacturing footprint today
Garden
Home
Outdoor
S
CuS
DC
M
Sales and
customer service
Customer service
Distribution center
Manufacturing
Size of DCs to be reviewed
Americas manufacturing footprint today
Apopka, FL
Pottery
Portland, OR
OR/Gerber
Page 20
New competitors have agile business models The rules of the game are changing
Orchestrating several
external value chains
Design Sourcing Manufact. Logistics Sales Marke-
ting
Focus on core competencies
Company x
Page 22 Company confidential
Manufacturing vision Own manufacturing maintained when cost efficient and/or strategically justified
Cost R&D
IPR
Brand Service
level
Both own manufacturing and external suppliers have
special roles in the supply network
Role of own manufacturing
• Special technology/materials know-how and close cooperation with R&D
• IPR protection
• Flexibility in production (small batches) and fast reaction capability to meet demand changes and customisation needs – close to sales markets
• Cost competitive
Role of external suppliers
• Cost competitive
• Capacity flexibility
• Access to new materials and technologies
Wednesday, 28
November 2012
H
Korhonen 23
Agenda
Page 24 Company confidential
1. Introduction to Fiskars Group
2. Operations
3. Manufacturing
4. Sourcing and supplier base
5. Logistics
6. Processes and tools
7. Summary
Page 25 Company confidential
Drive quality for competitive advantage
Create and maintain cost leadership
Ensure flexible and reliable supply
Develop new products
Fiskars sourcing cornerstones
Build capable organization
Manage risks
We work in close cooperation with our suppliers
Fiskars Supplier Days 2010
Sustainability throughout Lifecycle
Manufacturing: Efficiency in
• Energy and Material use
• Environmental, health and safety
protection
• Quality systems
NPD: Starting point!
Build in
• Environmental Aspects
• Product safety
• Good Quality
Distribution:
• CO2 emission
• Efficient packing
• Goods turnover speed
Consumption:
• Durable, functional
with lasting design
• Environmental
friendly materials
• Reuse, recyclability
Leadership and Administration
• Knowledge, Involvement, Support
Page 28 Company confidential
Supplier Code of Conduct project Scope
Training and communication
• Fair treatment
• Prevention of
involuntary and
underage labor
• Working hours
• Wage and
benefits
• Freedom of
association
• Injury prevention
• Prevention of
chemical
exposure
• Emergency
prevention,
preparedness
• Occupational
safety
procedures
• Dormitory and
dining
• Hazardous
substance
management
• Wastewater
management
• Air emissions
management
• Solid waste
management
• Environmental
permits and
reporting
• Business
integrity
• Disclosure of
information
• Protection of
intellectual
property
Management systems (audits, corrective actions etc.)
Labour and
Human Rights
Health and
Safety Environment
Business
Ethics
Agenda
Page 29 Company confidential
1. Introduction to Fiskars Group
2. Operations
3. Manufacturing
4. Sourcing and supplier base
5. Logistics
6. Processes and tools
7. Summary
World Class Logistics adds value to our business
Highly competent
people thanks to
larger entities and
shared processes
Capability to
serve
different sales
channels (e.g. wholesale,
web shop)
Cost efficiency;
economies of scale
Improved availability • optimization in the whole chain
• allows small markets to sell
wider assortment
Scalability /
flexibility
Value Added
Services
Global partners –
high performance
Logistics becomes regional service
for all BAs with less DCs
Agenda
Page 31 Company confidential
1. Introduction to Fiskars Group
2. Operations
3. Manufacturing
4. Sourcing and supplier base
5. Logistics
6. Processes and tools
7. Summary
What is an “operating model”?
Page 32 Company confidential
“An operating model is the abstract representation of how an organization operates across process, organization,
technology domains in order to deliver value defined by the organization in scope.“
(Wikipedia http://en.wikipedia.org/wiki/Operating_model)
Fiskars Operating Model defines
how Fiskars will work as an integrated company.
Strategy Business
model(s)
Operating
model(s) Processes
Customers
Products
Value chain
Organization R & R
Competencies
Governance Metrics
Deliverables
IT
Architecture
People Processes IT systems
UP! Program Mission
Execute Fiskars operating model transformation in EMEA
for supply chain and financials
by 2015
Structures
85% business 15% IT
UP! Program is the vehicle to implement Fiskars
Operating Model
Agenda
Page 34 Company confidential
1. Introduction to Fiskars Group
2. Operations
3. Manufacturing
4. Sourcing and supplier base
5. Logistics
6. Processes and tools
7. Summary
Building competitive Supply Network
Page 35
Focus – Efficiency - Growth
Simplified operations structure
Harmonized way of working
Platform for growth - scalable
Lasting everyday design,
since 1649