Olympus’ Integrated Business Planning Journey
In a recent aim10x live event in Singapore, Nico Nuerbchen from Olympus shared valuable insights on the company's journey to modernize its supply chain. With a focus on digital transformation, Olympus has successfully improved its planning and decision-making capabilities, enabling them to adapt to a complex product portfolio and meet the demands of their customers. Here are the top five takeaways from the discussion, highlighting key aspects of Olympus' supply chain transformation.
1. Shifting from a Traditional to a Modern Supply Chain:
Olympus, a well-known Japanese company with a strong presence in the camera industry, underwent a significant transformation by shifting its focus to medical devices. This shift required Olympus to revamp its supply chain, moving away from a transactional, regionally driven approach. By adopting a more integrated and global perspective, Olympus aimed to provide transparency, data-driven decision-making, and enhanced customer experiences. This shift from a traditional supply chain to a modern one formed the foundation of their transformation.
2. Leveraging Digitalization for Improved Visibility and Decision Making:
Digital transformation played a vital role in Olympus' supply chain modernization. The company recognized the importance of real-time data, supply and demand visibility, and scenario planning. By connecting previously disconnected systems and implementing an integrated data system and data lake, Olympus achieved greater automation, reduced manual reporting, and improved process accountability. This digitalization journey allowed for better decision-making based on comprehensive insights into supply chain performance, cost analysis, and root cause identification.
3. Embracing an Agile Approach to Capability Building:
Olympus adopted an agile approach throughout its transformation journey. Recognizing that building all the necessary capabilities upfront was impractical, the company opted for a step-wise approach. They focused on developing core functional capabilities, such as planning, distribution, and trade compliance, while remaining flexible to adapt to changing requirements. This agile mindset facilitated the implementation of digital planning tools, integration with financial planning systems, and the establishment of a check and trace solution. By taking measured steps and leveraging pilot projects, Olympus ensured a smooth transition and effectively showcased the benefits of their digitalized supply chain.
4. Promoting Organizational Excellence and Change Management:
Alongside technical advancements, Olympus recognized the importance of organizational excellence and change management. To promote a healthy and collaborative work environment, the company established a supply chain academy. This academy provided training on supply chain strategy, network planning, distribution, and other relevant areas. By aligning the knowledge and understanding of supply chain concepts across regions and teams, Olympus created a common language and facilitated effective communication. Regular check-ins, town hall meetings, and feedback mechanisms allowed for open dialogue and continuous improvement. These efforts helped build commitment and engagement among employees, fostering a culture of change and adaptability.
5. Expanding the Scope of Digitalization for Enhanced Business Impact:
Olympus understood that digitalization could extend beyond planning and distribution, enabling broader business transformation. By leveraging digital tools and analytics, they explored use cases such as control tower functionality, quality management, and supply chain visibility for compliance purposes. The company emphasized the importance of connecting supply chain operations with customer expectations, improving transparency, and facilitating better communication with customers. The ongoing journey toward digitalization focused on integrating modules, rolling out technology, and scaling up the capabilities to maximize the benefits across the entire supply chain.
I think Stefan already touched on quite a lot a very important thing. Right? When we basically think as supply chain, we need to build further on our core, what makes things happen, especially around planning.
But when we think about the the more extended use cases, when we think about ESG and so on, I think we all need to widen the scope and widen our capabilities and view on making sure that we really can go forward, accelerate business in general, right? And focus on use cases, what will help us to improve not only our our own company, but as well environment and so on.
Yeah. I'm I'm very happy to to give you a bit of insights in supply chain transformation today.
It's a very very quick intro of Olympus and then goes through this journey, there's a bit more focus on digitalization.
And hopefully at the end, other than even the breaks and so on, I'm very happy to have more communication and conversation, answering questions, and get your thoughts as well about this.
When you think about Olympos, very, very quickly, we are most of you know Olympus or most of the people know Olympus from the camera business. Right? That's actually not Olympus anymore. So we sold this two years ago and Dolimbos is now one hundred percent focusing on medical devices. That was anyway the biggest part of the company already in the last in the last years.
We are very proud to be within the top one hundred global innovative companies and especially in the endoscopic business, So minimal invasive surgery, what is the core focus of olympos, the – especially in this endoscopic business, we have a market share of more than seventy percent versus what is good, but it's a big burden as well because you need to steadily think about how you can extend the business left and right, right? And not only focus on this one single point. There's a revenue of roughly eight billion US dollar, what we are generating with roughly thirty thousand people, and the key markets is Japan as the core market as the headquarter, America's EMEA, and then Asia, OCanya, China, what is all under the under the APIC region.
Let me show you a short video as pictures are saying more than words and show you a bit of water limpopes. Balby did Japan in nineteen nineteen. Olympus initializing Microsoft and later produced cannabis.
Nineteen fifty. We need a breakthrough in medical technology. What we need to go? The world's first structural gastroenter.
Making it possible for doctors to capture images inside the human sun.
Today, Olivia is a global med tech company Okay.
Thank you. That's the one.
My name is Shelly. I work in human resources operations department.
We are realizing our vision of a purpose driven and people centered help the organization.
While committing ourselves to diversity, equity, and inclusion, to enable employees to reach their full protection.
Everyone should have the health and opportunity to lick their lives to perform.
And that is why we say true to life, dedicating our efforts to providing medical technology solutions that help make people's lives healthier, safer and more fulfilling.
I think that video shows as a little bit of a challenge of Volo Limpus as a very traditional Japanese company.
You've seen quite a lot of different languages here. And this is very, very important for us to really build a new global company not only focusing on the traditional Japanese heritage and so on.
So, coming to the supply chain transformation, in twenty nineteen, Olimbos celebrated as 100th anniversary and it was time for us to think about how we can fundamentally change the company and and enable the company at the end for the next one hundred years.
And in supply chain, especially for us, this means, going away from a very transactional, very regionally driven supply chain.
This this very local data, very local systems, with very low automation support, nearly no possibility to really simulate do simulations and and base your decisions on on those stuff. And very manual point to point distribution activities going to a supply chain where we really can enable our business, where we really can support the business in providing the right information to the right discussion about how we can drive supply chain forward, build a supply chain, what is integrated across all the different regions.
Across all the different parts of the of the supply chain, have data available, have transparency about the performance, the cost. And finally, as well to do all this decision making based on real time data as well on a on a global level.
Such distribution is as well a very, very important part for us as we want to want to make sure that we focus on value add and not on transactional activities, what is necessary to do, but it's not what really drives the business forward. So that's a that's a huge transformation, putting the customer in the middle of everything what we are doing, and then building as well planning in in the center, making sure that we have the connection to all the different parts and supply chain. And as this is a very, very huge program.
We said in the beginning, we start with a parallel program. And this parallel program was that we brought our experts together and asked them to an ideation sessions to just focus on what what can be the most important easy quick rinse, and we we founded a small program, with fifty initiatives, with a focus on quick improvements, cost savings, and so on. But finally gave us a possibility to to have some time to create a bigger program to already gain some trust of the of the other senior leadership team and and what we can what we can do and what we generate. And this this program, we finally generated as well as funding for our bigger supply chain program as we generated roughly US50 million dollars benefits had inventory reductions of hundred fifty million and so on.
So going forward in this in this transformation, the program was finally centered all around creating the right functional capabilities and planning and distribution, trade compliance, I mean, every what you what you know from from score model as well.
There was quite a lot of and it still quite a lot of fundamental work. What we need to do, but every time everything is related to our Northstar. I'm really providing the right benefit to the business, making sure that we can support the growth of olympus, inorganic growth, organic growth, making sure that we have really enhanced customer experience.
We measure everything. We see this net promoter score. Meanwhile, But for this, you need to have as well a better understanding of your supply chain. So we started with building a new Tom, a new structure, new supply chain organization.
And with this organization, we then went forward and you see this on the right side of the slide went forward across all these elements.
To build this new supply chain. So, people capabilities, bring teams together, make sure that they that we leverage teams, that they can do this change together with us, focus on process excellence and harmonization of processes, making sure that in this very regional driven supply chain, we had for planning since more than five hundred different processes, we reduced this to less than one hundred. So, all as a basis to make sure then that we can that we can introduce this as a right technology and go forward.
Data and transparency, very important harmonized data.
Make sure that you have the transparency across your supply chain. As a basis for the technology transformation later on. A very important part was for us as well on is still the the organizational excellence or organizational helps What is related to all the processes, what you need to do in supply chain, but as well in company in general and running your administrative stuff reducing all the transactional work, founding a a a shared shared service center, and then make sure that your experts really work on the value on the topic you you can go forward and what brings you forward. And this combined with a very strong change management communication with monthly weekly, monthly newsletters, town or meetings, round tables, open office hours, everything, what what gives us a possibility to make sure that we reach our colleagues and get as well feedback and and their support.
We are roughly in the middle of this journey.
It's a six years journey at the end and and after doing all this, let's say, cross stuff in the beginning, building organization, ramping up the initiatives. He put a strong focus on starting with small foundations like master data management, make sure that we further on build the leadership team, that we create all this all this process harmonization and alignments, but then used the first pilots as well to show with an IVP pilot, involving our business to show what supply chain is able to do where we need to go, and then put in place some tiger teams, especially for for inventory management, as well here, showing what we what we can do, what is what are the new possibilities in supply chain and so on.
In the last year, we focused on building the core of the supply chain. So we we selected the software with online solutions. We have think a very good partner and and going forward, Accenture is our integration partner. So, coincidentally, both here today in the in the meeting as well.
We we have done also in blueprint, all the design. We have the prototypes now available and go forward to see this you roll out. We put in place a track and trace solution with p forty four, making sure that we have global transparency about all our supply chain material flows and and can talk better to the customer where our products are and when they can expect deliveries and on. The IBP process, I already touched on this.
And I think for the very important part, we we went forward with our talent management and capability management you will see a slight later on to this.
Twenty three and twenty four, the key focus is on rolling out of the technology.
Making sure that we bring to life all the different modules and then later on scale up as a business first on.
And we touch a bit more on digitalization and that's Stefan what you mentioned as well.
We need to leave this core focus on purely planning and distribution when we think about tools and digitalization.
At the end, everything is is connected, and there are plenty of use cases what we can what we can, yeah, accelerate and and what we can create.
When we see where supply chain is in the middle, where supply chain is a connector and an integrator, but where the use cases are left and right of of the course supply chain. When you think about control tower, yes, it is good to track all your delivery sensor on, but the extended use cases and for medical devices, it's very important that you have a complete tracking under compliance point of U. S. Well, so use this or from a quality management perspective.
There are plenty of use cases, what what will help the the organization as a business to go forward. Yeah. Let's focus a bit on on some examples as time is running quite quickly. One of the first activities, what we have done is we put a data and analytics program in place where we connected all our, yeah, actually in the past disconnected systems, more than sixty ERP systems, all the CRM systems, PLM systems, twenty five data warehouses, BI tools, we connected all of this to one integrated data system, and data lake, and make sure that we start with much more automated reporting, get rid of all these menu email back and forward sharing information in Excel.
What gave us two possibilities on one hand, it was the perfect basis for the for the process owners to take more accountability for their process because they have the full overview. And the other one is that, as everything is connected now based on the overall performance around the issues, events you see, you have a perfect possibility to go into the detail, to ten really where the root causes are.
That's a, that's a huge step forward. We focused on the key KPIs in the beginning with inventories, logistics, back all so on. So what you're normally doing, the next step for us to is to go forward more to structural KPIs, to structural analysis and as well to more cost related. Analysis.
The second big topic for us, I touched on this is the implementation of our digital planning tool. Again, we we have chosen our nine solutions for this.
At at the end, very good possibility for us, building the core in the beginning and then with the extended possibilities, we touched on supplier management when we talked before, right?
Second, very important part of the integration, the financial planning, how we can show not only from a process point of view, right? As well from a tool point of view, hard to bring this much more together.
We are currently rolling out the prototypes. So all the design work is done, prototype is there. If you can compare it like like a new car.
There's the car's design.
The prototypes are available and now it's in production, so you can touch it, you can feel it, it gives us a possibility that we can showcase as well to our senior leadership team that they understand what are the changes from what was before, what will be afterwards when we have the system in place.
The benefits, I think, you you all know what the benefits are of such an integrated planning platform. For us, especially, is really to make sure that wherever we are in the world with our supply chain teams, and we we build these teams currently really globally.
There's a perfect possibility to understand where we have issues in our supply chain, where we have events, what we need to react on, and then go into the detail, do a simulation, and do a decision making at the end, how we can improve and then directly bring this back to the ERP systems as a execution.
It is very closely linked to the control tower. At the end, both together will be our digital twin, if you want to say, at the end.
In the first step on the track and trace, there's a partnership with p forty four, putting in place for our internal products and as well internal product flows from all the manufacturing sites to the distribution centers and then step by step as well to the customers a life system to know where the products are and what conditions the products are and so on.
I mean, I I said already, it's it's it's very heavy requirement from our sales people, for instance, to know exactly when when will arrive.
As you can imagine in a hospital, no one really wants to have stock in the hospitals or, but then if they are procedures planned, the patient is there and reversing what can happen is that the product is not there. Right? So planning this better, integrating this better with the customers. This is already the first step in the in the right direction. There are stills in manual communication, but then in the future, we see integration in the next steps, there will be as well that everyone can have directly look into the tool and see where products are and so on.
Yeah. It's an integrated roadmap with the digital planning and the control tower. It's a a stepwise approach with parallel capability building, and I've seen this on a on a slide as well before. Stefan, I think when you talked about from Tom to Dom.
You cannot build at all the capabilities upfront. That's not possible. So you you need to go forward in a bit more agile way roll out design, build capabilities.
You need to be flexible between the different modules, what you put in place and so on, and I think with this integrated road map. We we are so far doing doing quite well, and I'm very confident that we will reach even after four years, five years at the end, transformation for this digitalization, a very, very good result.
Important is that you use this prototype site and we put a lot of energy currently in making this KemBA vox connecting our senior leadership team. They're investing they are investing quite a lot of money. Right? Together with us in this technology.
Capability building is is key for us. And not only for us, I think in general in in supply chain.
This this journey is is more or less everyday a new learning. It's everyday people need to understand new things, they need to build new capabilities in in supporting this this transformation.
And besides individual trainings, in in process management, in project management, and anyway business architecture in data and analytics.
What is very important to build the core team and the excellence layer, we have put supply chain academy in place, and rather you know this. You have knut on the screen as well. Our common friend we built this together with Mckenzie and when we started this transformation.
And this Academy finally gives us a possibility to share common knowledge across all the regions, across all the people.
Make sure that everyone speaks the same language as well when we are talking about supply chain. What is very, very important because if you speak with someone in Europe and US and Japan, there's different understanding about the different topics and so by So, what we what we have done, we put together quite a lot of stuff regarding our vision, our our transformation journey, but then, as well, foundational and advanced modules all around supply chain strategy, network, planning, distribution, all the different areas. Right? And as well how you can connect with see areas left and right from from supply chain.
More less nearly all of our People are trained now and we are using this now as well as a as a onboarding program for everyone who is joining new. Again, this getting the common language is a very important part for us.
Communication need feedback.
So in driving forward, how we communicate with the people how we how we involve them.
One of the key activities is that we are doing a quarterly pulse check.
It's a it's a more structured way and and getting better understanding how we are developing, how the commitment of how our colleagues is, how much they feel informed, about the transformation, how our supporting this.
And and we are using this as well in in very open feedback. Than playing this together in the town hall meetings, for instance, and make sure that at the end, it helps us to gain much more commitment. Right? And And the feedback, what we are getting helps us then again to improve our our way of communication. Very easy things.
In the in the round tables, we have never shared questions upfront. Right? And if you go to countries where people are not so talkative, it's very difficult to get a good communication. Right?
So just one feedback was very easy, asked before. Get the questions before, and then you have a perfect basis to focus really on the critical topics, on the relevant topics for for the colleagues but as well then have them directly involved. Right? And there's a much, much better discussion ongoing.
Quickly some lessons learned when it is about leadership support, make sure that you engage the key stakeholders the key partners, EOS and so on makes some part of this transformation.
This can be we we we started a supply chain hero program, and every time one of our EOs is is doing this avoiding, all this praising the the hero.
But, it's a good possibility on one hand to motivate people got on the other hand as as well that that they get every time one piece more of understanding what is going forward and what's happening in the supply chain transformation.
So, one one of the possibilities, make some sponsors and so on. I think you you know all of this.
Don't rate that the team is doing resource decisions, assigned resources, it just takes too long when you try to do this just based on the on the team activities.
For the program management, it's a huge change. It's a huge program, a long time make sure that that that you empower the people, that they really can do decisions, nothing is more worse, and everyone is just waiting, that a small team is is is moving everything forward and is doing the decision. Make sure that you have the right people together in a global team that you speak the language of the different countries.
It's we've seen especially in the beginning how much knowledge gets lost in between this translation between Japanese, English, Chinese, all the different all the different languages. Right? Communication, training, absolutely absolutely important.
Early prototypes, we talked about this already and then try to do a more agile approach and and quite a lot of company. Everyone talks about agile. Right? But in quite a lot of companies, agile is not really something what is embedded in the DNA and in the culture. So moving away from three year, four year fully fledged project plans and so on to go to a we do a sprint, we learn, we do the next sprint and so on. It's very, very important to go forward and to really keep keep track. Otherwise, you will be steadily just just chart your your PMO team with with replanning and so on.
It's quite a lot about processes, explain processes, make sure that the process owners are doing this. So it's not the project team, not the not the people who are running the transformation to process owners. Finally, who need to be involved and and train their teams, and then make sure that the team step by step skills up. That's especially in in where we are coming from. This is very transactional, a work and very transactional teams.
Making sure that people really understand, put this aside. There's no no no fear or they don't need to have a fear from from AI or whatever. Right? Put this aside and then step up, focus more on analytics, focus more on process on business architecture, And so on, it's a very, very important part.
So far, our journey, very quickly touched on this. I hope that I hope it somehow triggers some some sort process, some questions, and I don't know if we have time now or later, every time I'm happy to go more in detail with you about the transformation and discuss a bit.
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