Virgin Media Transforms Supply Chain to Support Profitability and Growth
 
 

Virgin Media Transforms Supply Chain to Support Profitability and Growth

  • Oracle Customer:  Virgin Media
    Location:  London, United Kingdom
    Industry:  Communications

    Employees:  12,400
    Annual Revenue:  Over $5 Billion

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Virgin Media was launched in 2007, following the merger between the United Kingdom’s two largest cable companies, NTL and Telewest, and the subsequent takeover of the world’s first virtual mobile operator, Virgin Mobile. It began life as UK’s first quad-play communications provider, offering fiber-optic broadband, digital TV, fixed-line, and mobile telephony services.

Having inherited a complex and fragmented supply chain of the multiple companies from which it was formed, Virgin Media initiated an ambitious program to overhaul its entire supply chain infrastructure. This entailed consolidating its warehouse and distribution operations and introducing a new, integrated management and planning system for inventory, warehouse, and network spares.

Two core elements of this supply chain transformation were the integration of Oracle Inventory Management with a new warehouse management system to achieve full and up to date inventory visibility across the distribution network, and the introduction of Oracle Service Parts Planning to enable the company to put faulty network equipment back into the supply chain once repaired.

The supply chain transformation program delivered a multimillion dollar cost savings within 18 months, outweighing the initial investment in the new logistics network and its associated management systems.

 
 

 
 

Challenges

A word from Virgin Media

  • “Our deployment of Oracle E-Business Suite’s Oracle Inventory Management and Oracle Service Parts Planning provided a single source of truth and visibility into the supply chain. We have a large catalogue of more than 25,000 SKUs, and the solutions seamlessly meet the demands of increased complexity, while providing the agility needed to recognize and manage unique requirements for fast-moving and slow-moving stock.” – Maurice Daw, Executive Director, Access, Virgin Media

  • Reduce the operational cost of managing a complex supply chain, and help to achieve profitability by replacing a siloed, legacy network with a single, streamlined distribution infrastructure capable of responding to all service offerings, including cable TV, fixed and mobile telephony, and broadband internet
  • Gain increased visibility and control of inventory to reduce stock shrinkage and ensure the most efficient movement of inventory through the network
  • Decrease inventory costs by enabling the company to repair and reuse faulty network equipment—including routers, switches, and cable—rather than ordering a new replacement for every returned unit
  • Replace inefficient manual processes for TV, internet, and phone service demand planning and asset tracking with an industry-leading automated system

Solutions

Oracle Product and Services

  • Replaced seven fragmented, product-specific supply chains, 11 separate warehouses, and 80 distributed “squirrel stores”—lockable boxes located at third-party premises, such as gas stations—with a single logistics network in which a central warehouse serves 52 field stores for all product lines: cable TV, fixed and mobile telephony, and broadband internet
  • Realized cost efficiencies by integrating Oracle Inventory Management with a new, outsourced warehouse management system—supported by Kuehne & Nagel—enabling daily reconciliations of inventory levels, and full visibility and control of inventory across vehicles, the central warehouse, field stores, and customer premises
  • Gained complete insight into nationwide demand for network spares, such as routers, switches, cable, and head-end equipment, using Oracle E-Business Suite Release 12.1 Oracle Service Parts Planning to monitor demand and manage the distribution of spares more efficiently
  • Reduced inventory costs by using Oracle E-Business Suite Release 12.1 Oracle Service Parts Planning to seamlessly manage more than 25,000 stock keeping units (SKUs) of network equipment, streamlining return and repair of faulty inventory, and enabling the company to redistribute it into the supply chain, rather than ordering and supplying new parts each time
  • Achieved multimillion dollar savings through gained efficiency that, within 18 months, exceeded the initial investment in the new logistics network and its associated management systems

Why Oracle

Virgin Media had an existing deployment of Oracle E-Business Suite, but wanted to extend its value by using more of the solution’s functionality. The company integrated the Oracle Inventory Management module with its new, outsourced warehouse management system to achieve precise, up-to-date visibility and inventory control, and it added the Oracle Service Parts Planning module to enable better management and reuse of network equipment, having seen the value the solution had delivered to global electronics manufacturer Philips.

Partner

The project was a collaborative effort between Virgin Media, Oracle for the E-Business Suite element, Oracle partner Accenture for systems integration between Oracle Inventory Management and the third-party warehouse management system, and Kuehne & Nagel for warehouse and distribution outsourcing.

“This was a thoroughly collaborative approach with all four parties throughout the project working to ensure maximum efficiency and effectiveness for our company,” said Maurice Daw, executive director, access, Virgin Media. “When we were looking at areas, like process design or how the systems would interface with each other, we worked on the issues together, rather than following a traditional customer/supplier relationship where the company demanded to have things done a certain way. And that approach worked very well.”