As part of Project Växa, Dentsply Sirona migrates its supply chain functions into an independent organization. The Spotlight team interviewed Dan Key, Senior Vice President and Chief Supply Chain Officer, to give employees insight into this new organization.

What are the responsibilities of the supply chain function and what does that mean for our company?

Dan Key: Our centralized supply chain is responsible for ultimately supplying all of our products to our customers. Specifically, this includes the procurement of direct and indirect materials for the Company, supply and demand planning for our inventory, product manufacturing, storage and finally shipment to our customers. The supply chain function is also responsible for the maintenance of many of our facilities and our overall Environmental, Health and Safety programs that protect our employees from injury in the workplace. 

Could you share some milestones that your team has reached since the beginning of the new year?

DK: As an organization, we are fortunate to have an incredibly talented and great Operations Leadership team in place. Supported by Mike Leggett, Vice President Supply Chain Planning, and Joanne Couture, Vice President of Global Procurement, the team is working hard and has already reached quite a number of milestones this year. These include the completion of the new centralized organization for supply chain, the establishment of Sales and Operations Planning process, and the completion of necessary site closure processes. 

In order to be able to efficiently see inventory at all locations, we developed our first ever inventory cube (a highly complex program utilizing 3D spreadsheets) and now have the ability to measure ourselves against relevant metrics used by external customers. We created complimentary vision based on SQDIC+P, which stands for Safety, Quality, Delivery, Inventory, Cost and People. It’s important that our people are central to this vision as they are the strength of the organization.

We have also made progress in solving challenges at the Venlo (Netherlands) location, which we are continuing to improve every day. Things are going very closely to plan and we’ve kept costs below budget for the first half of the year.

Could you please explain the changes as well as the new structure?

DK: The new supply chain is divided into two major areas: the management of the manufacturing and the functional support to the manufacturing teams. Manufacturing sites are managed based on five specific manufacturing technologies: Wellspect-related technologies, Equipment Assembly, Formulated Products, Machining and 3D Printing, and Extrusion & Molding. We arranged manufacturing into technologies in order to facilitate sharing best practices, use common equipment and processes, and look or network synergies that give us an advantage over other manufacturers. The benefits in this structure include lower costs, better service due to location, and significant business continuity due to our global breadth of manufacturing. The functional teams are designed to support the manufacturing divisions and our customers. We have functional groups for Supply Chain (planning, warehousing, logistics, and distribution), Procurement (indirect and direct), Project Management, Environmental, Health & Safety (EH&S), Human Resources (HR), Legal and Finance.

What are some of the opportunities for the supply chain?

DK: There are numerous opportunities for upgrades within our supply chain that will improve how we serve our customers. One task is to transform our inventory management into a “pull” system based on the needs of customers rather than on any individual manufacturing facility.

Our manufacturing technology groups are finding ways to be better and more efficient at making our products, and this is already happening. To give an example, the Alginate teams from Badia Polesine (Italy) and Milford (Delaware, USA) got together for the first time to discuss Alginate manufacturing and they found $500-700K of savings in just three days by speaking openly about what works best. Our distribution network is another area full of potential. We currently have 2 Regional Distribution Centers but we most likely need 3-5 to better maintain inventory and improve service to our customers. Direct material spending accounts for over 50% of our total manufacturing costs, so finding centralized opportunities that reduce this spending will help improve our costs as well as boost efforts towards finding alternative suppliers.

What are the benefits of the new supply chain structure for customers?

DK: The benefits of the new organization are to all of our customers. For our internal customers, we will improve our EH&S and our employee development programs to benefit everyone on the team. For our external customers, our inventory availability, service levels, and the quality of our products will all improve. Our success will also benefit shareholders by improving costs and inventory management, which will result in greater profit and liquidity. 

Earlier this year a survey was conducted with specific internal business partners. Could you tell us a little bit more about that?

DK: The survey was done to try to determine the best way to organize our supply chain team and analyze what is important to our internal customers. We found out that our organization needed to match the PG team so we could be more involved with the NPI (New Product Introduction) process. 

What does Dentsply Sirona mean to you?

DK: Dentsply Sirona’s competitive advantage is successfully supplying high-quality branded products and services known by our customers due to our experience, passion and knowledge in dentistry.

Dan, thanks so much for your time.

Listen to the DS Tunes Episode with Dan Key here.