Rexam is a global consumer packaging company and the largest beverage can maker in the world. For what is at first glance a simple and mature product, the supply chain for international brands such as Red Bull is surprisingly complex, with a high degree of seasonality and an increasing requirement for short-term special activities in, for example, promotions. Richard Downes is vice president supply chain for Rexam Beverage Can Europe & Asia, overall winners of last year’s European Supply Chain Excellence Awards, and he explains that open-mindedness and simplicity have been the keys to this success.
The transfer and adoption of best practice, wherever it is found, is close to Downes’ heart. ‘We’ve never been afraid of copying good models from other businesses,’ he says. ‘For example, in supplier development our approach to partnerships is closely modelled on Toyota. Sales and operational planning we have lifted straight out of the text-books.’ But simplicity is also a driver. ‘Our logistics we keep simple – just one supplier, no raft of hauliers behind a 3PL or 4PL. The cash-to-cash concept is also fantastically powerful – it is the simplest measure a business can adopt but it amazes me that in the supply chain, although people are aware of it, they don’t use it as a tool.
‘The key to us is to look beneath the best practice to understand how the underlying process works and how it could work in our concept. For example, in supplier development we looked at what Toyota does and it blows your mind. But it has a lot of people available to work in and with tier 1 and 2 suppliers and we haven’t, so we’ve had to break down, refine and adapt the model.
‘It’s also a question of choosing what we can implement quickly. I can’t wait two years to embed something in the business. If you over-complicate things, progress takes years and people get frustrated and impatient. Where we’ve been successful is that if I say something will produce results in six months, the team knows that that is realistic.’
Understanding your processes is essential, Downes says, to getting benefit from tools like benchmarking. ‘Benchmarking is good but if you just look at the results across your plants and ask, ‘Why aren’t you achieving what they are?’ you will get 101 reasons why they can’t match the performance. But if you step back and ask the guys on the line, ‘What do you do to achieve that?’ they will tell you what amounts to best practice and you can spread that about. If other plants follow that best practice, they may not perform as well but they will be achieving close to the best that that plant can achieve.’
Keeping things simple is also important to Downes. He recalls that while he was doing his MBA, Rexam wanted to look at supply chain management. ‘I started with ‘What is SCM?’ and got eight answers, from narrow purchasing to taking over the world! We went back and broke it down into simple steps – purchasing, relationships, flow of goods etc, and that is how we’ve developed the supply chain in Rexam. We started with purchasing, then logistics, customer service, planning…. All in simple steps so that the business understands what you are doing.’
There are always people who want to overcomplicate, Downes says, not least in IT. But even in its SAP implementation, Rexam has kept things simple. ‘We have a centralised supply chain model across our 18 European locations. we own the materials centrally and the plants are in a sense contract manufacturers. So with SAP we’ve only put in what we need to run our business, so we can roll out the modules we need quickly.
‘You mustn’t become a servant to IT. People are selling IT as a solution to all your supply chain problems. If you go down that route, you probably don’t understand your business processes sufficiently to make a valid judgment.’
- Richard Downes gained experience in purchasing, sales and general management with John Laing Construction, the DHSS, and a family printing business before joining Rexam’s European beverage can business, where he has been for 14 years.
- After positions in purchasing and logistics he took responsibility for Rexam Europe’s Y2K project and then became customer services director with responsibility for logistics, warehousing, sales administration and production planning across Europe.
- In 2001 Downes was made supply chain director with additional responsibility for all purchasing and inventory control across Europe and Asia. He was promoted to vice president supply chain in 2002.
- He completed an MBA in supply chain management at Cardiff University in 2003.
- In 2005 he led the supply chain team at Rexam Bevearge Can Europe to win the overall trophy for the European Supply Chain Excellence Awards
