Avaya: A supply chain management case study
Trust in the transformation. That’s what high-tech giant Avaya had to do when the company decided to radically change up how it manages its supply chain. Going from a self-proclaimed worst-in-class supply chain to one of the best in the business was no easy feat, but the rewards were well worth the effort. “In the beginning, it was tough,” admits Benji Green, Avaya’s Senior Director, Integrated Supply Chain Planning & Operations, in a recent article published by Supply Chain Digital. “12-hour days, hair on fire supply constraints, excess inventory, completely manual processes, imbalanced supplier terms and conditions, poor cash to cash. You name it, it was bad. It was hard to imagine becoming best-in-class at the time.”
Tracking success: Metrics matter
Now Avaya is leading the way, exceeding industry benchmarks in 11 key metrics. The company has reduced supply chain expense by 50% and decreased cash tied up in net inventory by 94%. At the same time, it’s seen a 224% improvement in inventory turns and pushed on-time shipments to a record best 97% on-time. How did Avaya do it? The answer is time, perseverance and a clear vision to exceed employee and customer expectations while fueling profitable growth. The company also made substantial investments to attract, train and retain top talent, while building a corporate culture that engages those willing to contribute to Avaya’s success. Avaya also measures and reports on more than 100 metrics, each aligned with the company’s four pillars: customer satisfaction, employee satisfaction, cash-to-cash and supply chain expense. Rigorous tracking of these metrics helps Avaya feel confident it’s on track to realize success.
Technology-driven change drives better outcomes
Changing up its supply chain management technology was also a critical piece to Avaya’s success. The company migrated its business processes onto a single platform—Kinaxis® RapidResponse®. It now uses the cloud-based solution for:
- Supplier communication
- Supply planning
- Demand planning
- Inventory planning
- Inbound and outbound logistics planning
- Procurement spend analysis
- POS analytics
“We do everything from daily supply assurance and revenue risk to strategic product transitions on RapidResponse,” says Green. “Central to globalization, RapidResponse allowed for extensive automation of non-value added work, standardization of processes across multiple MRP instances, products portfolios, and regional variations. The tool, properly managed, has globalized Avaya’s planning and operations processes and organization and helped deliver dramatic improvements and sustainable performance.” Find out more about Avaya’s incredible supply chain transformation in Driving Digital Transformation from Supply Chain Digital. Want to dive even deeper into Avaya’s supply chain transformation? Read Aberdeen Group’s in-depth case study.