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Prysmian Group – 2015 Sustainability Report
Supply Chain
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Optimisation of transportation
The Logistics function manages all the Group's intercompany flows, both at annual budget and monthly
operational level, with the aim of satisfying demand in all markets that do not have a local production source
due to capability or production capacity reasons. The Logistics function also manages short and medium-
term production allocations and planning through the Sales & Operations Planning (S&OP) process, which
links the demand cycle (sales) with the supply cycle (manufacturing and procurement).
The Group's planning activities differ, depending on how the product is classified. "Engineer to Order"
products are used mostly in Energy Projects for submarine, high voltage and umbilical cables, being
businesses in which the Prysmian Group supports customers from the design of the “system” to the final
laying of the cables. "Assemble to Order" products allow the Group to respond rapidly to demand for items
that use standard components, and which are only differentiated at the final stages of production or in terms
of packaging, while maintaining minimum inventories of finished products. “Make to Order” products are only
manufactured and shipped after receiving an order from the customer, thus reducing the level of slow-
moving inventories considerably while increasing the rotation of raw materials, components and finished
products. The "Make to Stock" approach is generally used for the most standardised products, which require
an inventory management policy capable of responding rapidly to demand. This last model is mostly applied
in the “Energy Products” and “Telecom” areas.
Specific attention was dedicated to all aspects of inventory management during 2015, specifically:
raw materials, with a growing commitment to the planning and logic of materials procurement,
including metals in particular (copper, aluminium and lead), where more reliable forecasting of local
requirements has significantly reduced the levels of buffer stocks;
semi-finished products, with the implementation of various lean and six-sigma projects at the
factories considered most critical;
finished products, with an emphasis on the accuracy of sales forecasts and a constant focus on the
reduction of slow-moving items.
At the same time, the Logistics function has focused further on customer centricity by strengthening its
service (on-time delivery) parameters and by faster order entry.
Actions and projects of this kind confirm the Group's commitment to the ever more efficient use of resources,
greater information sharing and reducing the time taken to respond to market needs.
The increased attention paid to market dynamics, the optimal management of inventories and the
procurement and distribution processes combines with strong awareness about the movement of materials,
highlighting the Group's commitment to reducing the environmental impact and improving the sustainability
of its production and distribution processes.
In the context of the Prysmian Academy, during 2015 the Logistics function began the process of training the
logistics-manufacturing personnel who work for the Group's affiliates around the world. Implemented over a
period of several days and using internal lecturers, the objective of this course is to facilitate networking,
enhance the professional standing of the individuals concerned and share ways to improve the Group's
logistics and make them more efficient.