Integration service boosts aerospace supply chain.

Fresh from a management buy-out, world-leading specialist materials supplier Apollo took the opportunity at the Paris Airshow in June to launch its radical new supply chain integration service. New CEO, Mike Pilbeam, one of the world's leading supply-chain innovators, describes here how the

company is developing systems to help aerospace manufacturers release capital whilst improving manufacturing flexibility and simplifying administration. Furthermore, to demonstrate the success of the new strategy Apollo announced an innovative new supply-chain management agreement with BAe Systems, worth more than 50 million [pounds sterling].

Pilbeam's vision is to provide large users of high-value materials with a supply chain that is transparent, highly integrated and which adds value at the most efficient point. `This is as much a financial issue as a logistics or manufacturing one,' he emphasises. `Many companies keep very high values of materials stocks, with further capital tied-up in early-stage processing systems that are no longer central to the company's activities. Outsourcing to a specialist has the potential to eliminate these inefficiencies and release the capital for core business development. Apollo's approach can easily inject tens of millions of dollars into a company's cashflow.'

Apollo has already started to introduce a range of techniques to achieve this and, following a management buy-back from the stockmarket, intends to develop quickly as the world leader in this field. Backed by merchant banks UBS and Bank of Scotland, it has so far invested more than 4 million [pounds sterling] in new information management processes and intends to invest a further 2 million [pounds sterling] this year.

`The supply chain is a capital intensive and naturally inefficient process in which every interface is a cost and a potential point of failure,' explains Clive Orford, Apollo's director responsible for corporate development. `We have modelled the complete process, allowing us to develop systems and supplier relationships that will revolutionise the way that aerospace, defence and other high-technology companies manage this important part of their business.'

BUSINESS INNOVATION

For proof of the company's theories, Orford points to the successful implementation of an innovative new contract with BAe Systems, announced at the recent Paris Airshow (June 17-24).

Through a contract with Apollo worth around 50 million [pounds sterling]/yr for 10 years. BAe Systems is able to operate its Air Programmes Business Unit without inventory or early-stage processing systems. As a result of this relationship, it has been able to reduce its inventory by 12 million [pounds sterling] and to re-allocate space, previously used for storage, to value-adding activities such as the new `Eurofighter' programme. `It really is a radical new approach that BAe Systems found extremely exciting,' Orford says.

Apollo is already one of the world's largest suppliers of specialist high-value metals, and supply chain integration services for aerospace, defence and other high-technology applications, with recent developments introducing the ability to supply components at the level of processing that is best suited to each customers' applications. It is also looking at e-business solutions including ways in which the internet can be used to increase supply chain efficiency and transparency.

It has more than 500 employees across eight international locations, and in 2000 achieved annual sales of around 120 million [pounds sterling].

The Apollo Group, Apollo House, Redfern Road, Tyseley, Birmingham, B11 2BH, UK. Tel: +44 (0) 121 335 5100; Fax: +44 (0) 121 335 5054; www.apollometals.co.uk