ignite 2015 na procurement breakout session - "creating a supplier collaboration program"
TRANSCRIPT
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§ Dow AgroSciences Introduction § Supplier Collaboration
§ Opportunity
§ Scope / Timeline
§ Results
§ Learnings
§ Discussion
Discussion Outline
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Our Roots in Agriculture Run Deep
Began in the 1950s as the agricultural unit of The Dow Chemical Company Entered joint venture with Eli Lilly to form DowElanco in 1989 Today, a wholly owned subsidiary of The Dow Chemical Company
1955 Begins as the agricultural unit of The Dow Chemical Company
1989 Enters a joint venture with the Elanco Plant Sciences business of Eli Lilly and Company to form DowElanco
1997 The Dow Chemical Company acquires 100 percent ownership of the joint venture and renames it Dow AgroSciences
2015 We are a wholly owned subsidiary of The Dow Chemical Company and one of the world’s leading agricultural companies
©2012 Dow AgroSciences LLC ® ™ The DOW diamond is a trademark of The Dow Chemical Company.
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Key Facts About The Dow Chemical Company 2014 Sales of $58.167 billion
Dow at a Glance
• 2014 Adjusted EBITDA of ~$9.3B
• ~53,000 employees
• Manufacturing in 35 countries
• Sales in ~180 countries
2014 Dow AgroSciences Sales by Geography
North America 40%
EMEAI 19%
Asia Pacific 10%
Latin America 31%
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Dow AgroSciences -Global Operations Span the Globe
Worldwide presence
Facilities in more than 40 countries and products sold in more than 130 countries
More than 9,000 employees worldwide
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Opportunity • Dow AgroSciences continues to grow at a fast pace and collaboration
with our suppliers is key to ensuring our future. We need to be more responsive and agile in responding to unplanned events.
DOW AGROSCIENCES RESTRICTED
Examples: Lack of visibility on incoming raw materials from China
Finding out something did not ship, only when it did not arrive in the US (4 week), limits us on ability to make changes to production schedules or receive supply from another source.
Lack of forecast visibility to our supplier
Strong selling season has stocked us out of bottle caps. Supplier extends lead time from 45 days to 80 days. Dow AgroSciences’ sales are time sensitive. If product is not on the shelf when customer needs it, we will miss the sale.
Lack of communication that container did not load on ship.
Material sits at port for 3 weeks, unable to find space on a vessel. No communication from Forwarder until material was supposed to arrive. Risk of not only being fined by government for lack of product but also for crop loss.
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Case for Change 2014 Situation
Variability in our demand, challenges supplier’s ability to supply
PO count has more than
doubled in three years
2011 2012 2013 2014
PO Count
PO
FAX
Email/phone or no responses
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Supplier Collaboration Project • Automation via ELEMICA portal
§ Order Response - confirmation of date, quantity and price
§ Supplier Advanced Ship Notification (ASN) - integrated into SAP
§ eInvoicing
§ Forecast Collaboration
• Raw Material and Packaging vendors (not currently B2B)
DOW AGROSCIENCES RESTRICTED
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Elemica
Scope / Timeline
Supplier (portal)
Dow SAP (idoc)
Orders
Order Response
Advanced Ship Notice
Order Response
Invoice
Forecast
Advanced Ship Notice
Invoice
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Value
DOW AGROSCIENCES RESTRICTED
*assumes 6 min/order
FEEDBACK • Positive response from Suppliers.
“All orders in one place vs. multiple emails /order.
• Additional suppliers are asking to be
on the portal.
• Dow planners are asking to have more suppliers on the portal. It reduces rework, increases confidence in planning system.
Productivity Improvements • Order Response
• Savings of 6-10 min/order by Planning organization
• eInvoice • Reduction in errors, • Savings of 15 min/order
by Accounts Payable.
Potential savings
Inventory reduction in chain Better prices Less expedited freight
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• Send initial communication (through Procurement) • Provide webex or video training • Complete setup in Portal and SAP • Go Live • Follow up and Support • 2-4 weeks
Vendor On-Board Process
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• Availability of supplier • Start slow to go fast • Don’t underestimate change management internally
§ Get key stakeholders involved early.
• Show value to supplier
Learnings