The story of how Orthofix International built an integrated supply chain through a web platform. The company has also re-engineered the processes to create a “tense flow” production and logistics system in pull logic. In addition to the service level increase of 22.5%, the lead time was reduced from 12 to one week and the warehouse fell by 50%.
From the IUNGO case study.
The company
Orthofix International is a highly diversified company that operates worldwide in the field of medical devices in order to improve the lives of patients by offering doctors around the world high quality products for reconstructive and regenerative orthopedics and spinal pathologies.
The company, founded in 1980 in Verona, Italy, is now headquartered in Lewisville, Texas and has over 900 employees worldwide. The company’s employees are involved in the development, production and distribution of orthopaedic solutions for the treatment of spine diseases and tissue regeneration. Orthofix products are distributed in over 50 countries worldwide.
The challenge
Pierluigi Scalzotto, Planning Manager and Roberto Ziggiotti, Senior Planner tell the success story of Orthofix. The goal was to be able to operate in a “tense flow” system, eliminating activities without added value and waste and minimizing those with added value for the next customer.
The Group, active for over 35 years, has had continuous growth, crowned by the entry of the stock on the Nasdaq in New York in 1992, and today has its headquarters in the United States, near Dallas, in addition to a European headquarters in Bussolengo (VR) and numerous subsidiaries located in England, France, Germany, Switzerland, Brazil and Puerto Rico. The network of independent distributors is extensive thanks to the fact that they are located in 86 countries.
The need to re-engineer processes emerged following a study on the degree of customer satisfaction that indicated the need to make finished products on demand, therefore in a pull system that did not allow warehouse obsolescence or unplanned deliveries. The reorganization in Orthofix has been addressed not by acting on the single process, but on their entirety, making the Supply Chain the protagonist of change.
CyberPlan, IUNGO integrated with Oracle ERP
The information systems involved were:
- the APS CyberPlan;
- the Oracle ERP;
- the IUNGO web platform
Cybertec’s CyberPlan and IUNGO’s web solutions were easily integrated with Oracle’s pre-existing ERP system. This is automatically updated and can transmit the data to the CyberPlan MRP for production planning.
Orthofix manages on CyberPlan the MPs plan on a monthly basis (Forecast and Safety Stock review); the MRP twice a day creating the priority list for the assembly departments, mechanical workshop and for the expediting to suppliers and the weekly MRP for sending orders to suppliers.
IUNGO mainly manages the activities of: sending and managing orders to Suppliers, weekly sending of the order book and backorders, expediting management and sending forecasts.
High-performance integrated supply chain
CyberPlan, IUNGO and Oracle have allowed Orthofix to fully integrate its Supply Chain, bringing significant benefits:
- increase in the level of service to the end customer from 80% to 98% in just over two years;
- reduction of lead time from the original 3 months to one week;
- reduction of stock levels by 50%.
(Source: Orthofix, a web solution to streamline the supply chain)
CyberPlan: Cybertec’s Advanced Planning System
CyberPlan is a powerful and innovative APS that has been supporting the production planning and scheduling of thousands of companies around the world since 1991. Companies ranging from small-medium-sized companies typical of the Italian territory to large multinationals over the ocean.
The processes that manufacturing companies optimize thanks to CyberPlan are:
- Sales & Operation Planning: aligns sales activities and production capacity, favouring strategic collaboration. Maximizes the level of service thanks to the optimization of the production plan;
- Production planning: anticipate factory problems through advanced simulations that take into account factory, supplier and customer constraints. Increases responsiveness to production contingencies by maximising the goodness of the production plan;
- Detailed Scheduling: Create optimized factory sequences taking into account production constraints. Simultaneously take into account plant, equipment and materials. Increase production efficiency by reducing setup and lead times.
In this way, companies can stay competitive by improving some important performance indicators (KPIs):
- Service level up to 99%: give safe and reliable delivery dates;
- Reduction of warehouses by 53%: level the warehouse, eliminate the missing ones and reduce production lead times;
- Increase productivity by 10%: reduce set-up times and machine downtime due to missing parts.
The companies that obtain the greatest benefits from the use of CyberPlan are all production companies from “make to order/engineering to order” to “make to stock/ assembly to order” in different sectors: Electronics, mechanics, machines, plants, food, pharmaceutical, plant engineering, CpG.
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Who is IUNGO?
IUNGO Italia is a company specialized in offering solutions to improve the Supply Chain and business performance.
The winning formula devised by IUNGO Italia lies in imagining email as the only really effective tool for interfacing with its suppliers. Hence the idea of patenting a use of email that allows all suppliers to respond to purchase orders, requests for offers or any other process without introducing new technologies in the company.
The extensive and proven experience together with the particular characteristics of IUNGO, allow customers to completely eliminate paper communications (faxes, letters, etc.), to significantly reduce the internal management activities of suppliers (communications, reminders, etc.) and above all to improve the reliability and response times of the entire supply chain.
Today IUNGO Italia serves over 300 customers with more than 50,000 integrated Italian and international supply companies and this innovative use of e-mail has made it possible to achieve the goal of concretely facilitating integration between companies and better coordinating the supply chain.
