A strengthened supply chain to lift the Danish producer of equipment solutions to world class
The new Dinex value chain must support a growth in turnover from 460 million DKK in 2012 to 2 billion DKK in 2020. Photo: Dinex
Dinex is investing massively in their supply chain as one of the means of lifting the company from being a local to a global player. The goal is a more industrialised and "process ripe" company, which in 2020 has doubled its turnover and created a stronger platform in the company's global market.
| 01.11.17 | By Poul Breil-Hansen | firstname.lastname@example.org
They come from Carlsberg, Arla, Danfoss, Lego and Grundfos. COO Carsten Kyster, VP Production Poul-Henrik Jørgensen and VP Supply Chain Ebbe Gubi form the team, which is going to lift the value chain of Dinex from being a flexible, innovative, local and craft marked supply chain to a more industrialised, standardised and global supply chain that can support the process excellence, productivity, quality, scalability and agility needed to grow its turnover from 460 million DKK in 2012 to 2 billion DKK in 2020.
And they are already well on their way. The turnover in 2016 reached 1 billion DKK, and the first half of 2017 has featured a turnover growth of 13-15 percent. Delivery performance in the first half of 2017 went from 89 to 94 percent where the target is 95 percent, and productivity has initially increased by 7-8 percent in 2017. Last year Dinex improved productivity by 13 percent, and this is also the target for this year.
"Our stock has not improved, as we have not yet changed anything in the way it is managed. We expect to handle that in the fourth quarter of 2017 with effect in 2018," says Ebbe Gubi.
Development from scratch
The three experienced operating executives have joined Dinex, which is headquartered in Middelfart, within the past few years, and the ambition is to create a more mature supply chain with regards to both process and organisation.
The value chain team of Dinex: From left to right it is VP Production Poul-Henrik Jørgensen, COO Carsten Kyster and VP Supply Chain Ebbe Gubi; they are the management team that will transform the value chain of Dinex. Photo: Dinex
They tell that they have taken up the challenge of developing the value chain of Dinex precisely because it is a large and very different challenge than being employed in a well-established global company with a large support setup.
"At Grundfos we could always just call a communications department or a human resources department, if we had a wish for some external awareness to our need for engineering or MSc students or graduates within a particular field. Or if we would like to initiate some Kaizen training, whiteboard meetings or cooperation. Here at Dinex, we must do everything ourselves and more or less from scratch, and it's actually extremely exciting," says Ebbe Gubi, who is the latest arrival of the three.
"We have all three tried to work for large, professional and highly industrialised companies, and we have learned an awful lot from that. I myself have a great deal of experience from fast-moving consumer goods industries where there is a strong focus on supply chain, agility and the ability to quickly respond to market signals. We are used to having customers, who do not wish to wait, and to always being on our toes in relation to the market, and to thinking in terms of our next move to ensure that we continue being the top-of-mind of our customers and end customers," says Carsten Kyster, who has a background from, among other things, Carlsberg and Arla.
He adds: "It is a pleasure and an exciting challenge to help transfer experience with advanced tools such as postponement, sales & operations planning, predictive forecasting, manufacturing made-to-order etc. for a company like Dinex - and not least the mindset that forms the basis of the tools’ ability to create value".
Dinex has initiated a transformation of the value chain from a flexible, innovative, local and craft marked supply chain to a more industrialised, standardised and global supply chain. Photo: Dinex
From craft to industry
Dinex is a 35-year-old family-owned company that is very entrepreneurial and technology-oriented. The manufacturer of exhaust solutions for trucks has done well in a local and regional after-sales market but experienced an unforeseen deficit in 2014. This gave rise to quite some clearing-up, closure of a factory in Germany, etc., and after a few difficult years, 2014-2015, the company’s financial situation is now again moving in the right direction.
Therefore, the Board has now made a strategic decision that Dinex should grow significantly and adopt a global role in its market, and the family-owned company has, among other initiatives, employed the three new executives for the Dinex supply chain.
These growth plans require an industrialisation where the company must not only be a competent developer of technologically advanced products but also be adept at developing the entire production and delivery system to ensure consistent high quality, fast lead times, fast changeovers, etc.
In future Dinex must, for example, not only supply to the after-sales market but also act as an OEM of solutions, which are directly included in the large truck manufacturers' assembly-line production. This requires a completely different supply chain with other competencies.
"We must not only be good at manufacturing the right things, we must also do it in the right way," tells Poul-Henrik Jørgensen, who has a background from Danfoss and Lego and, among other things, has worked extensively with quality.
Gemba, S&OP and APQP
The three operating executives tell about their medium and long term plans to introduce methods such as Gemba, Kanban, Performance Management Systems, whiteboard meetings, sales & operations planning, decoupling or postponement, Advanced Product Quality Planning, and other advanced tools.
"But we are well aware that we must crawl before we can walk. It will be a longer journey where we need to train our existing staff’s competencies, recruit new profiles and gradually develop a new mindset and behaviour throughout the operating organisation and in cooperation with sales, R & D, etc.," says Ebbe Gubi.
The three operating executives tell that they are surprised at how hard it is to find operational managers and factory directors with the appropriate lean competencies for the seven Dinex factories around the world.
"We're looking for executives and middle managers, who have a good understanding of the end-to-end value chain, which they are part of. They must also be good at communicating both vertically in their own function and horizontally with partners in other functions. And they need to know of both theory and practice within modern tools and management that goes beyond traditional production. These kinds of profiles are few and far between", they tell.
The three operating executives make no pretence that they would like to see applications from talented supply chain or business students from some of the universities. "We can offer other challenges and greater width in research projects than more established industrial companies, and therefore I believe we can offer good development opportunities and also great influence for students," says Carsten Kyster.
Dinex is a leading manufacturer of innovative exhaust and emission solutions for heavy vehicles, and was founded in 1982 by Grethe and Jørgen Dinesen. In 2000 their son, Torben Dinesen, became Managing Director, and in 2011 he also became majority owner of the company. Dinex is headquartered in Middelfart, has seven production sites abroad, employs more than 1200 people, and is represented in 16 countries.
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