From reactive to orchestrated: LINAK’s journey towards a smarter supply chain

BY URBAN KINDSTRÖM AND DANIEL LARSON
This article was originally published in Supply Chain Effect 5-25 (read the full magazine here).

When the company LINAK decided to digitize its entire supply chain, the goal was clear: the highest possible level of service and control at the lowest possible cost. But the path to it meant a journey through both technical challenges, global flows and new ways of collaborating.

For us at PipeChain, it became a shared journey towards something bigger – where we had the opportunity to show what real supply chain orchestration can actually mean. When we at PipeChain first started working with LINAK, they were faced with a challenge that many global companies recognize: how to hold together a complex supply chain with over 20 subsidiaries, hundreds of suppliers and just as many customers. All with different systems, processes and routines. Creating transparency, efficiency and, above all, collaboration in such an environment requires both courage and a clear vision. And LINAK had that. The goal was to digitize the entire supply chain, from forecast to delivery and from supplier to customer, to achieve maximum control and service at minimum cost. An ambitious mission, but also a clear direction for the future.

From reaction to orchestration

In articles we have previously published about our work with LINAK, we described the journey based on Gartner’s model: Reacting – Anticipating – Collaborating – Orchestrating. It is a way of illustrating how companies go from handling problems as they arise to proactively controlling their entire flow in real time, with all parties synchronized. Today, LINAK has taken big steps in that direction. Thanks to PipeChain acting as a common digital communication point for all trading partners, including freight forwarders, much of the complexity has disappeared. More than 85 percent of purchase order lines are now handled fully automatically via our cloud platform, from order response to invoicing, directly integrated into LINAK’s ERP system. In addition, over 80 percent of all international deliveries are monitored with real-time status such as ETD and ETA. And perhaps most importantly: suppliers and carriers are automatically evaluated based on process-critical KPIs, providing insights that lead to even smarter flows. The result? Significantly higher service levels and faster response at a lower cost than before.

Step by step towards full transparency

The digitalization journey began on a small scale. One factory site and five suppliers were first connected to digitize the entire forecast-to-delivery process. This became the basis for something bigger. In the next step, all subsidiaries and their more than 250 suppliers were connected. Forecasts, inventory data and demand became visible to everyone, which created not only control but also trust between the players.

Then more steps followed:

• VMI (Vendor Managed Inventory) was introduced to a certain extent.
• Transport management was built up together with three large freight forwarders.
• And digitalization also turned to customers, with EDI flows and automated PDF conversions.

Around 20 percent of sales order lines are already fully digitalized, and the share is growing rapidly.

LINAK’s headquarters in Guderup, Denmark. Photo: LINAK.
Illustration top image: iStock/Sandipkumar Patel.

“We see planning and optimization as
the very heart of future competitiveness.”

A journey that requires leadership

We often say that technology is only half the journey. The other half is about people. About vision, courage and perseverance. LINAK is a clear example of this. Driving such extensive digitalization requires both visionary leadership and a strong will to succeed. Success comes not only from more efficient systems, but from a culture where the entire organization and its partners share the same goal. For other companies that are in the starting blocks, the advice is clear: involve the entire chain, both suppliers and customers, right from the start. When everyone sees the benefits of sharing information digitally, something happens. Suddenly, flows can be improved together and the benefits are immediate.

Forward, towards the supply chain of the future

LINAK has taken great strides, but the journey continues. The next step is to fully implement the VMI process for a couple of suppliers and achieve even more seamless orchestration from supplier to end customer. For us at PipeChain, it also raises bigger questions about the future of planning, the role of technology and how collaboration can drive competitiveness in a world where supply chains are becoming increasingly interconnected.

A future perspective

We see planning and optimization as the very heart of future competitiveness. The companies that manage to connect their entire network and make flows visible, smart and self-optimizing will be the ones who win. In five to ten years, supply chains will not only be digitalized but also self-learning and self-optimizing. The boundaries between customer and supplier will blur and collaboration across the chain will become even more integrated. Adaptability, collaboration and resilience will be crucial. Our role is to be the engine in the middle, the one that delivers the knowledge, intelligence and tools that make that possible. We also see how self-learning models and AI-driven analysis will change the way companies plan and optimize their flows. The technology is adapted to the unique needs of each company, which opens up completely new possibilities for efficiency and predictability.

Advisor in close partnership

But technology is only part of it. Our role as a partner is also about being advisory and close. Many of our customers’ challenges are not always visible from the start, but by working together we can identify the solutions and create real change.When everything is connected, flows, people and decisions, we will be the partner that helps companies build a supply chain that is efficient, predictable, robust and thinks for itself.

Urban Kindström is Chief Revenue Officer at PipeChain.
Daniel Larson is Supply Chain Consultant at PipeChain.