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A BUSINESS - ENGINEERING JOINT RESEARCH CENTER AT LEHIGH UNIVERSITY Creating Agile Supply Chains in the Chemical Industry Stephen P. Crane Director Supply Chain Air Products Bethlehem, PA May 14, 2008 Adapt Supply Chain Networks from Selling What I Make, to Making What I Sell
Who is  Air Products?
Air Products in Brief ,[object Object],[object Object],[object Object],[object Object],[object Object]
Performance Polymers Worldwide Leader in Co-Polymer Dispersion Technology, Serving Adhesives, Nonwovens, Coatings, and PSA markets
Performance Polymers Dimensions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Why focus on supply chain agility?
[object Object],Source:  David Caruso, AMR Research, “Demand-Driven Supply Networks: SCM Done Right” (November, 2003)
Oil Price Volatility 1998  2008
Natural Gas Price Volatility 1998  2008
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Potential Impact on the Unpredictable Source:  DePree College of Management Georgia Institute of Technology  “ In the real world, you a have to be ready for the unexpected”
What is supply chain agility?
[object Object],[object Object],[object Object],What is Agility?
Characteristics of Agile Organizations ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source:  Cranfield University School of Management
Agility is all about managing in the face of variability ,[object Object],[object Object]
Four Levels of Process Maturity Level of Maturity Agility ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source:  Supply Chain Leader / April 2007
How Can Companies Organize to Enable Agile Supply Chains?
Agile Organizations ,[object Object],[object Object],[object Object]
Synchronized Planning ,[object Object],[object Object],[object Object]
Fast Escalation ,[object Object],[object Object],[object Object],[object Object]
Performance Measurement of Plans ,[object Object],[object Object],[object Object]
Agility Requires Keeping Commitments to Overall Plans
Keeping Commitments to Plan ,[object Object],[object Object],[object Object],[object Object],[object Object]
Constraint-Optimized Planning ,[object Object],[object Object],[object Object],[object Object]
Proactive Monitoring / Analysis of Threats ,[object Object],[object Object],[object Object],[object Object],[object Object]
How Has Performance Polymers  Increased Supply Chain Agility?
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Approaches to Increasing Supply Chain Agility
Global Work Processes Metrics Follow the Money!
Sales & Operations Planning ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Plan Supply Chain P1 Plan Supply Chain P1.1 Aggregate Demand P1.2 Aggregate Supply P1.3 Balance Demand & Supply P1.4 Issue Supply Chain Plans Sales & Operations Planning Raw Material Planning Inventory Planning Master Production Scheduling Distribution Planning Financial Planning
Supply Chain Planning Advanced Planning Systems (APO) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Supply Chain Planning Advanced Planning Systems (APO) (This approach integrated planning with execution)
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Supply Chain Network Simplification “ 20 % of products generated 80% of the profits, but only 49% of the revenue”
Product Rationalization History
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Distributor Channel Expansion (NA) Use Distributors for Package Customers
Standardized KPIs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Forecast Accuracy World Class Performance 2003  2007 50% Improvement
Production Plan Adherence (Supply Planning Accuracy) 38% Improvement 2004  2007
Financial Forecast Accuracy 21% Improvement 2004  2007
Where We Are Today The Benefits ,[object Object],[object Object],[object Object],[object Object],[object Object]
Force Majeure Case So how agile was our supply chain? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],“ We were so impressed how you maintained uninterrupted supply of product during the force majeures”
[object Object],[object Object],[object Object],[object Object],[object Object],Where We Are Today The Benefits “ All these benefits have been easier to achieve due to increased supply chain agility”
Conclusion ,[object Object],[object Object]
Thank you! Stephen Crane Director Supply Chain Air Products and Chemicals [email_address]

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Creating Agile Supply Chains In Chemical Industry

Notas del editor

  1. Creating Agile Supply Chains in the Chemical Industry" In today's business environment, it is important that a business be agile as well as efficient.  Supply chains can help achieve this through the ability to respond quickly to customer demand and by reducing operating costs.  Heightened customer expectations and shorter channel response times will be difficult to achieve for some companies, but for those that can deliver the right product in a timely fashion, increased market share and profitability will be the reward.  The Performance Polymers business at Air Products has successfully transformed its' supply chain to become more agile and responsive to effectively deal with the increased volatility in the chemical industry.  You will learn what key strategies and approaches this business utilized to create a more agile supply chain. As companies transition themselves to become more demand-driven, the ability to handle volatile demand becomes even more of a critical issue Demand volatility is a reality in many industries Not only are retailers serving end customers facing volatile demand, but this volatility is being passed on to manufactures and distributors at different stages of the industry value chains Many factors contribute to demand volatility, including increased customer choices, product customization, rapid technological improvements, global competition and upstream supply fluctuations From high tech to retail to chemical industries, this is a challenge being faced by companies across all verticals Traditional supply chain processes were designed to be push-driven The transition to becoming pull-driven has started and is slowly occurring in many industries Managing volatile demand efficiently in a demand driven environment is a significant challenge and requires companies to employ robust supply chain strategies I will touch on several approaches and strategies I have utilized to increase supply chain agility