Reto Fuhrer is a supply chain advisor whose career and expertise span years, continents, and industries. Realising that what Australian supply chain business units most often lacked was a plan, last year he founded a boutique consulting firm to help local companies successfully navigate towards future success.
“The primary area where many Australian companies can improve their supply chain is in planning,” says Reto Fuhrer, CEO of RF Supply Chain Expertise (RFSCE), a boutique consultancy he runs, bringing years of experience from across the globe to bear on tackling today’s supply chain challenges.
Originally from Switzerland, Reto has worked in executive roles in supply chain management, operations, and general management. Among other things, his resume highlights work in the food and beverage, sporting goods, chemicals, and plastic manufacturing industries – as well as work advising the ACT Government. In addition to his background in Switzerland (he moved to Australia nearly five years ago), he has worked across the European Continent, as well as Asia, North America, and now Australia – the last of which he now proudly calls home.
By now well-versed in Australian supply chain challenges, last year he struck out on his own in founding RFSCE. He has the rare virtue of having been both an insider and an outsider. Having worked internally and externally (as an advisor) across industries, continents, companies, and governments – his varied knowledge, experience, and expertise afford him a perspective few others can ever hope to have.
With his eye ever on the big picture, in pursuing his consulting activities Reto starts with a simple drawing he contrived that he calls the ‘RFSCE Hub’, a diagram that encapsulates elegantly all the major facets of supply chain management, and how they interrelate.
If you plan to build a house, it helps to draw a blueprint. Planning is everything.
“When I talk about supply chain management, I conceive of it as a house sitting in a row of additional houses,” Reto says. “You always have neighbours – customers, suppliers – but internally the house is upheld by four main pillars: the planning pillar, the procurement pillar, the operations pillar, and the distribution pillar.”
Sitting atop these pillars, Reto says – giving shape and purpose to the structure – is the roof, whose layers comprise supply chain strategy, personnel management, and change management.
“Finally, the house is standing on several different support functions,” he says. “These support the whole house – or business – in its success and resilience. For our horizontal support beams, we have warehouse management, material management, foreign trade and customs management, digitalisation, HSEQ components, and supply chain controlling.”
This visual technique is a helpful way of understanding the interrelation and relative importance of various supply chain components. Ultimately, all of them fit together to create a sturdy supply chain structure. And – like any good building planner – Reto sees all the pillars, beams, and materials at once; as well as where to go to get them.
“Working from the idea of the Hub, RFSCE has developed an ecosystem of partners – individuals and companies – that can support us in providing the things we need to execute on a holistic strategy that we conceive,” he says. “At RFSCE we devise careful plans to optimise supply chain outcomes, and then tap into our network of contractors and partners to come in and help us make that plan a reality.”
PLANNING POST-COVID
While technology agnostic, Reto is emphatic about the importance of using new technologies to gather historical and contemporary data for understanding companies’ unique supply chains. “If you are planning where to go, it helps to know where you’ve come from,” he says.
“Many Australian businesses, particularly SMEs, don’t use very sophisticated data management techniques and technologies – and yet accurate data is high value, low-hanging fruit that all planners should be picking.”
Take, for example, inventory management – an important yet often improperly managed part of supply chain planning.
“Accurate data and data-analytics are essential to optimising inventory levels,” Reto says. “And of course, positive outcomes in inventory management support positive outcomes in other areas: customer service is improved because you deliver what you promised when you promised it; there’s also a positive effect on cash flow, because expenditures are better timed, and money isn’t wasted.”
Industry talk about moving from a ‘just-in-time’ to a ‘just-in-case’ inventory model in wake of COVID can trick businesses into a misleadingly binary way of thinking, he says.
“I’ve heard many accounts from colleagues of businesses that went full 180 degrees after the onset of the pandemic – from ordering just what they needed, when the going was good and things were flowing easily through the supply chain, to suddenly filling their warehouses with materials in case supply lines were cut off. This has resulted in companies shifting from having inventory problems to having cash-flow problems. There’s a balance that needs to be struck, here.”
But how does one strike that balance? In short, says Reto: good planning, good data, good technologies, and good relationships – both with suppliers and customers.
He notes that recent studies have demonstrated that with optimal sales and operations planning processes in place, and supported by modern technology, radical improvements are possible. Reto cites the following figures illustrating improvement potential:
- Forecast accuracy improved by 20 to 50 per cent;
- Inventory reductions of 20 per cent;
- Production time savings of five to 15 per cent;
- Storage costs decreased by 1o to 30 per cent;
- Five to 10 per cent improvements in delivery time;
- Revenue increases of up to 25 per cent; and
- Operating margins improved by 20-plus per cent.
“For successful long-term decision making in an increasingly complex and fast-paced world, companies must harness the best people and processes in concert with the best modern technology for purpose,” Reto says. “This doesn’t mean the most expensive technology, but it means moving beyond Excel, and out-of-date or inconsistent data sets, as the basis of decision making. Businesses must use a platform where everyone involved can make decisions working off the same, accurate, data.”
Where many businesses misfire in adopting new technologies and techniques, says Reto, is that solutions are purchased or implemented in isolation, without full understanding of their implications, and without full buy-in from all company stakeholders.
“Full success only comes from an integrated solution, and interdisciplinary teamwork is key to achieving that,” he says.
“Technology implementation and ‘optimisation’ is sometimes misconceived as only for large companies, and only affordable to large companies. This isn’t so. At RFSCE we are experienced in working with SMEs and can plan and execute affordable technology implementations that will make a big difference – no matter how large or small your business is.”
With myriad supply chain pressures and cost increases squeezing Australian companies’ finances, the future might seem difficult to navigate.
“That’s why companies need a plan – and that’s where we come in. It’s often hard, internally, to see how everything fits together and devise a plan that will get you where you need to go.
“At RFSCE we can bring that outsider’s perspective, grounded in years of insider experience across industries and continents. We find that when we start talking to and working with clients around planning processes, many seemingly unrelated issues automatically disappear.
“To any business in need of a true plan-driven, outcomes-oriented supply chain consultancy, I say ‘Give us a call’. We offer a free initial 30-minute exploratory conversation – so there’s nothing to lose, and potentially a lot to gain.”
To discover more about RF Supply Chain expertise, visit their website by clicking here.