chemical supply chain
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'The Challenge ofEfficient Customer Collection'Prepared by Vincent GAUTHIERLogiChem 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.TRANSCRIPT
Copyright ©INEOS 2006
The Challenge of
Efficient Customer Collection
LOGICHEM
21 April 2010
Prepared by Vincent GAUTHIER
Copyright ©INEOS 2006
Content
� INEOS Olefins & Polymers
� Incoterms
� Pro & Cons
� Customer demand
� INEOS offer, benefits
� Conclusion
Copyright ©INEOS 2006
Ineos Olefins & Polymers
� Acting in : – C2, C3, C4, C6
– LDPE, LLDPE, HDPE, PP
• Serving 6 different Market sectors, one single face to the customer :
– Construction & Durables : Pipe, Wire & Cable, Car Fuel Tank, …
– Food Packaging : Caps & Closures, Fresh Milk, Coating, …
– Film : Metallocene, LLD/LD PE film, BOPP, PP Heat Seal
– Advanced Packaging Applications : Solid Food Packaging, …
– Medical, Hygiene and Technical Applications : Fibres, Textiles,
Automotive
– Export & Trading
Copyright ©INEOS 2006
�
�
�
�
Rosignano (It)200 Kt/y HDPE
Rosignano (It)200 Kt/y HDPE
Lavera (Fr)230 Kt/y HDPE150 Kt/y PP
Lavera (Fr)230 Kt/y HDPE150 Kt/y PP
Köln (De)220 Kt/y LLDPE360 Kt/y LDPE
Köln (De)220 Kt/y LLDPE360 Kt/y LDPE
Lillo (Be)440 Kt/y HDPE
90 Kt/y PP
Lillo (Be)440 Kt/y HDPE
90 Kt/y PP
Geel (Be)290 Kt/y PP
Geel (Be)290 Kt/y PP
��
Sarralbe (Fr)195 Kt/y HDPE270 Kt/y PP
Sarralbe (Fr)195 Kt/y HDPE270 Kt/y PP
�
Ineos O&P sites
Grangemouth (UK)165 Kt/y HDPE310 Kt/y LLDPE285 Kt/y PP
Grangemouth (UK)165 Kt/y HDPE310 Kt/y LLDPE285 Kt/y PP
Bamble (No)140 Kt/y LDPE170 Kt/y PP
Bamble (No)140 Kt/y LDPE170 Kt/y PP
�
Copyright ©INEOS 2006
Process Excellence
� Culture of Process Excellence
� Core processes documented, mapped with owners
� Reviewed for efficient monitoring and improvements
� Prize is significant
– Focus, visibility, risk, agility, simpler reporting, better
decisions, people… � savings !!
Copyright ©INEOS 2006
Customer Collection
� Often perceived as win deal for Customer
Is the vendor also winning ?
� Carriage is by the Buyer
� Incoterms (International Commercial Terms) specified in
Sales agreement
� Incoterms 2000 : FCA or Ex-works
Copyright ©INEOS 2006
Ex-Works
VENDOR BUYER
Load & Carry
Costs
Risks
Customs
Clearance
Copyright ©INEOS 2006
Incoterms : Ex-Works
� Seller must make goods available in Vendor or agreed place, uncleared for export, unloaded
� Specify “loaded” if performed by seller– Attention to responsibilities & costs !
� Deep Sea Export : Vendor <> Exporter– Vendor should recover VAT
– FF should set Exporter = Vendor in customs docsExporter copy to Vendor
� Export in EEC : – Require Buyer VAT nbr on Sales to recover VAT
Copyright ©INEOS 2006
FCA “Location”
VENDOR BUYER
Main leg carriage
Costs
Risks
Customs
Clearance
Deliver unloaded
Copyright ©INEOS 2006
FCA
VENDOR BUYER
Costs
Risks
Customs
Clearance
Main leg carriageLoad
Copyright ©INEOS 2006
Incoterms : FCA
� Seller must make goods available in agreed place,
cleared for export
� Loading :
If delivered in Vendor place,
– Then Vendor is responsible for loading
– Else Buyer must unload from Vendor’s vehicle
� Export in EEC :
– Require Buyer VAT nbr on Sales to recover VAT
Copyright ©INEOS 2006
Pro & Cons of Customer Collection
PRO (1)
� Customers think can do transportation cheaper than vendor
� Seller sometimes invoice separately at actual cost �Customer realize how expensive � try to minimize it
� Some local hauliers can offer cheaper rates than bigger pan-European players
� Some customers use own fleet, optimizing with deliveries to their own customers, etc.
Copyright ©INEOS 2006
Pro & Cons of Customer Collection
PRO (2)
� Customers easier & better control on delivery : – get status immediately
– Can redirect to other destination
� Some Customers don’t want to disclose final destination / Customer
� Some traders can deliver directly their own customer, avoiding warehousing, un- & re-loading, …
� Vendor’s Salesmen move delivery problems to Customer side
Copyright ©INEOS 2006
Pro & Cons of Customer Collection
CONS (1)
� Safety on site
� Communication on site : language issue
� Loading Date difficult to agree
– Buyer books on behalf of its haulier => unreliable
appointment
– Buyer sometimes buys with no customer yet � bet on direct
delivery vs. warehousing
Copyright ©INEOS 2006
Pro & Cons of Customer Collection
CONS (2)
� Loading Date difficult to hold for Vendor’s haulier
– Unreliable agreement
– Little respect from haulier
– Buyer having planning issue � Storing at vendor’s expenses
� Customer buys “Collect” when carriage easy and
cheap,
else comes back to Vendor : please sort out !
Copyright ©INEOS 2006
Pro & Cons of Customer Collection
Conclusion
� One big issue = communication around loading, at :
– Ordering time
– Booking time
– Loading time
� modern communication means can help
Copyright ©INEOS 2006
Customer demands
� Vendor’s reference– Clear identification of loading
– Used to call Vendor site to arrange loading
– Usually a SAP doc number
� Arrange loading at its own discretion– Re-arrange depending of its own customer or haulier
� Quantity actually delivered– To invoice asap their own customers
Copyright ©INEOS 2006
INEOS Offer (1)
� Standard Offer
– INEOS push informative e-Mail to customer
– Triggered automatically at Delivery document creation in SAP
– Bears all delivery information :• Customer reference
• INEOS reference
• Goods description
• Invitation to book a loading slot with phone number
Copyright ©INEOS 2006
INEOS Standard Process
Copyright ©INEOS 2006
INEOS Standard Process Benefits
� Benefits for Customers
– Delivery Reference provided to customer : ASAP and
effortless
– Saves time to call INEOS Customer Service Center
– Can immediately call INEOS plant to arrange collection
� Benefits to INEOS
– Saves time of communicating manually INEOS reference to
customer
– Saves ~7 minutes of AC / collection
Copyright ©INEOS 2006
INEOS Offer (2)
� Fork Process
– INEOS sends electronic copy of Delivery Doc to
Transwide
– Transwide forwards “Call-Off” to Customer
– From Transwide, customer books a loading slot on
behalf of its haulier, directly in INEOS schedule
Copyright ©INEOS 2006
INEOS Fork Process
INEOS
SAPTRANSWIDE
COLLECT
CUSTOMER
HAULIER
A
HAULIER
B
HAULIER
C
Copyright ©INEOS 2006
INEOS Fork Process Benefits
� Benefits for Customers– Delivery Reference provided to customer : ASAP and
effortless
– Saves time to call INEOS Customer Service Center
– Saves time to call INEOS plant to arrange collection
– Booking much faster with 3 clicks in Transwide
– Visibility, can change booking until day before loading
� Benefits to INEOS– Saves the time of communicating manually reference to
customer
– Saves time of plant to book manually a loading slot
– Total time saved = ~32 minutes / collection
Copyright ©INEOS 2006
INEOS Offer (3)
� Triangle Process
– INEOS sends electronic copy of Delivery Doc to
Transwide
– Transwide forwards “Call-Off” to Customer
– From Transwide, customer forwards Call-Off to
Haulier of its choice
– Selected Haulier books loading slot directly in
INEOS schedule
Copyright ©INEOS 2006
INEOS Triangle Process
INEOS
SAPTRANSWIDE
COLLECT
CUSTOMER
HAULIER
A
HAULIER
B
HAULIER
C
Copyright ©INEOS 2006
INEOS Triangle Process Benefits
� Benefits for Customers– Delivery Reference provided to customer : ASAP and
effortless
– Saves time to call INEOS Customer Service Center
– Saves time to call INEOS plant to arrange collection
– Saves time to order transport manually to haulier
– Delegate booking to haulier, keep visibility
� Benefits to INEOS– Saves the time of communicating manually reference to
customer
– Saves time of plant to book manually a loading slot
– Total time saved ~32 minutes / collection
Copyright ©INEOS 2006
INEOS Offer (4)
� Shipment Notification
– INEOS push ACTUAL delivery information by e-Mail to customer
– Triggered automatically at Dispatch
– Bears all actual delivery information, e.g. :• Customer reference
• Container number or Trailer plate number
• Volumes dispatched (invoiced) � allows invoicing final customer in same day
• Goods description & Batch number
Copyright ©INEOS 2006
INEOS Shipment Notification
Copyright ©INEOS 2006
INEOS Shipment Notification Benefits
� Benefits for Customers– Actual Delivery information provided to customer : ASAP and
effortless
– Saves time to call INEOS Customer Service Center
– Can immediately invoice final customer with actual volume dispatched
� Benefits to INEOS– Saves the time of communicating manually actual delivery
information : ~7 minutes / collection
Copyright ©INEOS 2006
Requirements
� Customer
– acquaintances with modern communication technology
– Shared e-Mail box
– Read and sort .pdf files
– Access to Internet and Transwide web site (Fork & Triangle)
– Respectful of policy / agreement on collection dates
� INEOS
– Robust processes and systems
– Train & coach customer’s staff
– Clear policy / agreement on collection dates
Copyright ©INEOS 2006
INEOS experience
� Standard process– Already 12 high volume customers
– Plan 25 more in 6 coming months
– Time saved = ~7 minutes / collection
� Fork Process– Already 4 high volume customers
– Plan 3 more in 6 coming months
– Time saved = ~32 minutes / collection
� Triangle process– Already 4 top volume customers
– Plan 1 more in 6 coming months
– Time saved = ~32 minutes / collection
Copyright ©INEOS 2006
Conclusion
� Efficient Customer Collections = challenge
� Potential improvement area = communication– High / Huge value of better sharing information
– Provide visibility to your business partners !
� Sustained by good process and accurate data, electronic communication can save time (time = €)
� Especially when triggered automatically
� The more embedded Vendor & Customer supply chainsthe more efficient Customer Collection will be
Copyright ©INEOS 2006
Copyright ©INEOS 2006
Lessons learned
� Some customers still resist to
– Getting e-Mails notification
– Use web based application to share information
– Use generic shared mailbox for inbound notifications
� Conversion of customers :
– Takes time …
– Spam filters : Poor knowledge � mails bounced back
� Process
– No automatic cancel notification
Copyright ©INEOS 2006