ANSTO is saving time, improving production processes and saving millions of dollars following a partnership with specialist business improvement consultancy, Oliver Wight.
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An unlikely partnership
At first glance ANSTO, an Australian Government agency and operator of Australia’s only nuclear reactor, and Oliver Wight, a consultancy firm specialising in developing sustainable competitive advantage, would seem unlikely corporate bedfellows.
Most of the 700 odd organisations that Oliver Wight have worked with are in the corporate rather than the government sphere (although it also includes the Australian Red Cross amongst its clients). As the main prime producer of nuclear medicine and sole operator of a nuclear reactor in Australia, some would incorrectly assume ANSTO does not have competitive environment.
You’d think they’d be unlikely partners, but you’d be wrong.
The challenge
The first clue as to how this came about is ANSTO’s structural composition. As a CAC (Commonwealth Authorities and Companies) agency, Australia’s nuclear agency is the relatively rare position of having a responsibility to foster diverse and growing commercial arms.
The second comes when you consider the business of ANSTO: nuclear medicine production, sales, distribution and export; lead contracting services providing mineral analysis on behalf of Australia’s mining industry; environmental monitoring consultancy services to both the public and private sectors; silicon irradiation for the technology sector and cutting edge medical research.
These are somewhat uncommon challenges in a government sense, but easily recognisable to industry. The third comes when you consider the scale of each business units operations. ANSTO reportedly produces in the order of 10,000 doses of nuclear medicine a week, and distributes them to around 250 hospitals and medical centres in Australia and in the Pacific Region.
This challenge will continue to grow over next 18 months or so with the opening of a new export-scale medicine plant with the potential to provide millions of doses of the medicine – again a specialist challenge, but hardly incomparable to those faced by many in the logistics industry.
And so having recognised the challenges for what they are, Oliver Wight and ANSTO have formed a partnership that is, for want of a better phrase, paying dividends.
The result
In May 2010 ANSTO had zero export sales; today it makes over $5 million per year from export sales alone. Three years ago, ANSTO could only reliably supply the domestic market, today ANSTO has a DIFOT (Delivered In-Full, On-Time) rate of over 95% and has generated direct and indirect savings of between three and five million dollars from its logistics processes.
Why? “Because we now have the capability to make and distribute product based on forecast demand over a 24 months horizon, whereas previously we were just selling what we could make, which was just enough to cover the Australian market,” says Shaun Jenkinson, Group Executive for ANSTO’s Nuclear Business. “And we’re on track to achieve savings in excess of what we set out to.
The results come from ANSTO’s implementation of an Oliver Wight integrated business planning and supply chain program. Lives can literally depend on ANSTO’s products and with some isotopes having a half-life measured in hours, operational efficiency is vital.
“Because of our demonstrable capability of production and recent track record on supply, we’ve achieved government funding to build an upscale facility for 2016. This will triple our capacity, so our export potential in the next few years is significantly higher than our current position said Jenkinson.
The Oliver Wight Proven Path is an implementation methodology developed on the knowledge and experience gained from over 40 years working with some of the world’s most successful companies on their journey to Class A accreditation - Oliver Wight’s globally recognised standard of excellence. It is this methodology, which Jenkinson identifies as the deciding factor in partnering with them.
“We wanted to own the improvement process in the organisation, not have someone just come in, tell us how to repair something and then leave. With the Oliver Wight approach the organisation learns to do it themselves; you get guidance and help developing the new processes, but Oliver Wight transfer their knowledge to you so you can teach and train each other internally until you become self-sufficient - that’s how you achieve Class A.”
About the Integrated Business Planning (IBP) process
A key component of the Operational Excellence Project is the introduction and development of an Integrated Business Planning process. Integrated Business Planning (IBP), sometimes referred to as Advanced Sales & Operations Planning, is a process led by senior management that evaluates and revises time phased projections for demand, supply, product and portfolio changes, strategic projects, and the resulting financial plans.
This is done on a monthly basis, typically over a 24 month rolling planning horizon.
This is done on a monthly basis, typically over a 24 month rolling planning horizon.
It is a decision making process that realigns the tactical plans for all business functions to support the organisation’s business goals and targets (budgets and strategic goals).
A primary objective of IBP is to reach consensus on a single operating plan, to which executives of the management team hold themselves accountable and allocates the critical resources of people, equipment, inventory, materials, time and money to most effectively satisfy customers in a profitable way.
Published: 21/08/2013
A primary objective of IBP is to reach consensus on a single operating plan, to which executives of the management team hold themselves accountable and allocates the critical resources of people, equipment, inventory, materials, time and money to most effectively satisfy customers in a profitable way.