Case Study - Operations Management

Topics: Supply chain management, Vermiform appendix, Supply chain Pages: 20 (7228 words) Published: October 6, 2014

SIG Combibloc
- Supply Chain Innovations It was July 2002 and Theodore Streng, Head of Supply Chain Management (SCM) of SIG Combibloc, the second biggest supplier of aseptic packages for food and beverages just tried to prioritize the aspects he was about to present at the meeting of the executive committee on strategic positioning. The key issue of this meeting was the benchmark report which compared SIG Combibloc to its main competitor Tetra Pak. The results of the study were striking: “Whereas both companies are head to head in all major qualitative aspects, SIG Combibloc lags behind in speed of implementation of new printing designs and customer order lead time”. Senior management was obviously very uncomfortable with these negative benchmarking results and expected him to address this issue and to come up with a solution. Theodore Streng and his team had identified the key problem and would take the lead in the improvement project. This however would involve a radical change in the supply chain management strategy.

Theodore Streng realized that it would be on him and his team to convince the executive committee to make the change happen and to decide about the “when”, “where” and “how”. It was clear to them that it would take several months if not years for the effects to materialize. But they were determined that they could turn his vision of an integrated supply chain that linked suppliers and customers to the same platform into reality.

Company Information
In 1853, SIG Swiss Industrial Group was founded in Neuhausen (Switzerland) by 3 partners as a train car manufacturing plant, employing 150 people. The location was deliberately chosen due to the “Rheinfall” where the waterpower could be used to run the factory. To diversify operations, SIG started the production of small arms in 1860, and became the supplier of the Swiss army as well as the manufacturer of choice for high-precision sporting guns at world championships, and Olympic Games. SIG also transferred the know-how acquired throughout the years to other activities, and set up complementary business lines. Its extensive experience in the treatment of steel for example eventually led to the construction of pneumatic hammers, and Dominik Boskamp, Holger Materlik, Franziska May and Dominik Steinkühler prepared this case under the supervision of Professor Lutz Kaufmann and Alex Michel to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality.

Copyright © 2005 by WHU, Version 2005-03 – 01
No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise – without the permission of the supervising author.

SIG – Supply Chain Innovations

hydraulic pumps, which later entailed further diversification. Along the way SIG also became involved in the manufacturing of products like automobiles, planes and vending machines, which were produced in smaller numbers.

In order to offset the economic downswings of the train manufacturing and small arms businesses in 1906, SIG commenced the production of packaging machines, which initially focused on the packaging of chocolate and soup cubes. In 1944 the first packaging machine in the non-food area was introduced for washing powder. Through the acquisition of PKL (“Pack- und Klebstoffwerke Linnich”), Germany, in 1989, SIG entered the field of liquid packaging for milk, juice, soups, and sauces. Several years earlier, in 1975 PKL had made its international breakthrough by introducing “combibloc aseptic”, a leak-proof folding carton packaging system for aseptic food packaging.

In 2000 SIG went through a redefinition of the group’s strategy, and decided to...
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