Supply chain audit at Milliken Europe

Milliken Europe’s chemical division in Ghent is a spin-off that manufactures and distributes, but whose raw material comes almost entirely from its US mother company in South Carolina, and whose customers are large B2B accounts (Unilever, Henkel, Procter & Gamble). The assignment was to audit that supply chain against Anderson, Britt and Favre’s seven principles of supply chain management, backed by a company visit, and to come back with something actionable.

What the audit found. Customer segmentation in the textbook 80/20 form. A logistics network with two nodes rather than one: Ghent plus an outsourced warehouse in Dubai, connected by a 3PL using HOPS ticketing, with EDI in place since around 2016 and a standard lead time of 10 days that stretches to six to eight weeks when stock runs out. Demand planning driven off a financial forecast converted into a production target, reviewed quarterly, with safety stock set at several levels. Product differentiation across three business lines, ranging from roughly 50 variants for one to 500 for another, and packaging in 18 kg pails, 250 kg drums and 1,000 kg totes. Strategic sourcing sitting with the mother company, with postponement already in use. An IT backbone of SAP running end to end. And performance measurement through activity-based costing.

What we proposed. Three things, in rough order of value:

1. Standardise the packaging formats, and postpone the packaging decision to as late as possible in the process. The three container sizes were not a deliberate design. They were a residue of which team happened to order what.
2. Move from activity-based costing to time-driven ABC, so that cost reflects the capacity actually consumed rather than the transactions incurred.
3. Set replenishment policy on service level and demand uncertainty instead of on fixed review cycles, which is where the six-to-eight-week tail is coming from.

A variability chapter runs alongside all of it, since every one of these recommendations is really a statement about where the demand uncertainty should be absorbed.

The packaging-postponement finding is not a one-off: it is the same lever I later ran on packaging policy at Atlas Copco, which is a fair illustration of how much a single idea transfers once you have seen it in two industries.