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Increasing Commercial Viability of Your Chemical Supply Chain Making SC Contributions VisibleBy Andreas ClaussenLogiChem 2011 will be the event's tenth anniversary and an opportunity for the most senior chemical supply chain & global logistics directors from the European chemicals community to come together once again share experiences, make new contacts and benchmark the latest chemical supply chain initiatives. Not only will LogiChem 2011 be a chance for the chemical industry to reminisce about the last ten years but an opportunity to shape the next decade. To celebrate a decade of LogiChem, there will be an exciting three day programme filled with networking opportunities in our new location, Antwerp.
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Increasing Commercial Viability of
Your Chemical Supply Chain
Making SC Contributions Visible
Logichem 2010
Andreas Claussen Director Global SC & Information Management, BASF Intermediates
06.04.2010 logichem 2010, Düsseldorf 2
Key Characteristics of BASF Intermediates
Operating Division Intermediates
1.9 bn Sales to 3rd Parties in 2009
> 600 product species2.5 million t/a
3.000 customers serving a broad variety of industries like
AminesAcids & Specialty
IntermediatesButanediol
& DerivativesPolyalcohols& Specialties
Chemicals
Agro
Textile
Pharma
Plastics
Gas Treatment
Construction
Textile
06.04.2010 logichem 2010, Düsseldorf 3
Key Topics
� Fitting Your Supply Chain into Commercial Objectives
� Aligning Your SC Strategy with Business Needs
� Fostering Commercial Orientation in Your Team
� KPIs to Drive Commercial Performance
=> Making SC-Contributions to Business Success Visible
Increasing the Commercial Viability of Your
Chemical Supply Chain
Operating Division Intermediates
06.04.2010 logichem 2010, Düsseldorf 4
Source Make Deliver
Plan
Return Return
Make Deliver MakeSource
Your BusinessYour Suppliers Your Customers
=> Generating Economic Value
Operating Division Intermediates
Commercial Viability in all Main Processes
SC-Model according to SCOR
06.04.2010 logichem 2010, Düsseldorf 5
Delivery Reliability
Delivery Capability
Non Conformances
IT-Tools & Costs
Infrastructure
Demand F’cast, Volatility
Inventory, Structure
Order Pattern, Lead Time
Packaging, Labeling
Freight Costs
Production Campaigns
Production Site, Plant
Container Fleet
€
-
FixedCosts
+Capital Costs
x
EBIT
-
CM1
Average Cost of Cap.
OperatingAssets
- Variable Costs
Sales
FixedAssets
Inventory
Operating Division Intermediates
Fitting SCM into Commercial Objectives
Simplified Value Tree
How to actively shape the Supply Chain Set-up?
SC
In
flu
en
ce
06.04.2010 logichem 2010, Düsseldorf 6
� Differentiation
� Innovation
� Collaboration
� Constraints
Operating Division Intermediates
Aligning SC Strategy with Business Needs
=> SC-Design according to Business Model
06.04.2010 logichem 2010, Düsseldorf 7
Final Design
Starting Point Payload Payload Payload - X
Payload + X Payload + X
Supply Chain Optimization
Operating Division Intermediates
Example for active Supply Chain Design
Improvements
� Freight Costs
� Infrastructure
� Order Process
Results
� Logistics Costs => €/t * 0.5
� Same assets => Volume * 2
� Additional Biz => CM1 * 3
06.04.2010 logichem 2010, Düsseldorf 8
Operating Division Intermediates
Fostering Commercial Orientation in Your SC-Team
CommercialSpirit
Communi-cation
Contribution
Recognition
What helps us?
� Many Opportunities
� Tangible Examples
� Commercial Thinking
What hinders us?
� No P&L for SCM
� „It‘s my job anyway“
� Evaluation Difficult
=> It’s more than savings!
06.04.2010 logichem 2010, Düsseldorf 9
Operating Division Intermediates
Commercial Viability of Your Chemical Supply Chain
Summary
Making Your SC-Contribution Visible
� Understand your Business Model Needs & Limits
� Translate your SC-KPIs into Monetary Value
� Evaluate Supply Chain Contribution to Biz Success
� Assess your team‘s Specific Share (not shy, not bold)
� Agree share with Other Contributing Functions
� Collect examples in a Log-file for Communication
� Use €-Contribution Target to focus team’s effort
Do Good… and Talk About It !! €€
KPIs
%
%- #
#+
+#%
%- #+
#
%
%
06.04.2010 logichem 2010, Düsseldorf 10
Key Topics
� Fitting Your Supply Chain into Commercial Objectives
� Aligning Your SC Strategy with Business Needs
� Fostering Commercial Orientation in Your Team
� KPIs to Drive Commercial Performance
=> Making SC-Contributions to Business Success Visible
Increasing the Commercial Viability of Your
Chemical Supply Chain
Operating Division Intermediates
11
