Maximizing Road Carrier Savings Through Elemica

Transcription

1 Maximizing Road Carrier Savings Through Elemica North American Sourcing & Supply Chain Conference Houston, Texas 14 September 2010 Thomas J. Warner BASF Corporation Manager of e-solutions Systems Integration 1

2 BASF North America Corporate Overview 2010

3 From modest beginnings to The Chemical Company 1865 Badische Anilin & Soda Fabrik begins manufacturing textile dyes and other chemicals in a modest plant in Ludwigshafen, then part of the kingdom of Bavaria Based in Ludwigshafen, Germany, BASF SE is the world s leading chemical company, doing business on six continents and serving a wide and varied range of industries throughout the world. 3

4 BASF The Chemical Company 2010 snapshot The world s leading chemical company Serves all major industries Production facilities on six continents World-class, innovative, high-value products Intelligent, sustainable system solutions 2009 Sales: $70.5 billion Employees: 105,000+ 4

5 BASF Worldwide North America FREEPORT FLORHAM PARK GEISMAR ANTWERP LUDWIGSHAFEN NANJING HONG KONG KUANTAN SINGAPORE Global Headquarters Regional Headquarters Verbund Site SÃO PAULO Asia Pacific P Selected Production Sites 5

6 BASF s Business Segments Products as diverse and varied as chemistry itself Chemicals: Inorganics, petrochemicals, intermediates Agricultural Products & Nutrition: Crop protection, biotechnology Functional Solutions: Catalysts, construction chemicals, coatings Performance Products: Dispersion, pigments, care chemicals, paper chemicals, performance chemicals Plastics: Performance polymers, polyurethanes Oil & Gas: Exploration and production 6

7 BASF s strategic guiding principles A conscientious commitment to our investors, customers, employees and neighbors We earn a premium on our cost of capital We help our customers to be more successful + We form the best team in industry We ensure sustainable development 7

8 Innovation Science to solve society s greatest challenges - Nearly $2 billion invested annually on R&D - Collaborations with nearly 2,000 universities, institutions and companies around the world - Nearly 9,000 employees focused on R&D - Average patents filed per year: 1,200 - Growth clusters: Nanotechnology Energy Management Plant Biotechnology Industrial Biotechnology Raw Material Change 8

9 Pursuing solutions to great global challenges A forward-looking focus on emerging industries Creating chemistry to help power, move, house and feed a growing world population Fuel cell technology Wind and Solar power Biotechnology Energy-efficiency Sustainable construction Water treatment

10 BASF in North America Sales 2009: $12.9 billion Employees: 16,000+ Prod. Sites: 100+ R&D Sites: 20 Key Customer Industries Chemicals Construction Automotive Agriculture Coatings Health and Beauty Packaging 10

11 BASF North America BASF Corp. (USA), BASF Canada, BASF Mexicana FLORHAM PARK FREEPORT GEISMAR 11

12 BASF in the news North America highlights, 2009/2010 May BASF opens its BASF Fuel Cell production facility in Somerset, NJ. June BASF and Monsanto Company advance their collaborative effort to deliver the world s first drought-tolerant corn product to the commercial market. August BASF awarded a $24.6 million Department of Energy grant to support construction of a new lithium-ion battery materials plant in Elyria, OH. April 2010 BASF becomes a founding member of the Sustainability Consortium, focused on bringing greater transparency and sustainability to consumer products and their production networks. 12

13 Inventing the future in 2010 Growing and evolving with the times North America 2020 Strategy continues: Targets emerging markets; talent acquisition and development; crossbusiness collaboration and marketfocused innovation opportunities. CIBA integration completed, further diversifying BASF s portfolio with worldclass specialty chemical solutions. North American Reload completed, aligning and optimizing BASF s business IT platform. 13

14 A solid foundation for long-term profitable growth In times of crisis, it helps to be as efficient as possible. The latest results from BASF suggest the German chemicals giant is doing a good job at protecting its bottom line by keeping a handle on costs.. BASF's efficient production lines have put it at an advantage to other competitors. Forbes A diverse, balanced portfolio Building even stronger positions in key emerging markets Customer-focused, market-driven innovation Proven flexibility, efficiency and cost discipline 14

15 A recognized global leader FORTUNE World s Most Admired Company Chemical Industry, 2010 Listed 2010 CARBON DISCLOSURE PROJECT 1st Place, materials sector, 2009 Included for fourth year in a row,

16 TMS Project Transportation Management System Project Overview Benefits and Savings System View Elemica Role 16

17 Project Overview Cross functional Team of Supply Chain Operations, Procurement, Site Logistics Current (2005) transportation processes / systems provided Lack of cost transparency, inability to pass costs to customers Inefficient processes for tendering / confirming shipments with carriers No integration between transportation operations and procurement Study of multiple options, produced the implemented solution: Development of a single command center to manage transportation operations Standard process for load tendering / carrier confirmation Routing guide compliance through consolidated organization Use of SAP / APO system to manage transportation Shipment tendering, Load Rack and Dock Door detailed scheduling

18 Innovation Organizational Innovation - Command Center of the Future Consolidated transportation services Transportation planning / optimization Shipment tendering / management Problem resolution / Exception Management SAP Innovation Maximizing use of SAP and Elemica Using Elemica to leverage carrier connectivity, avoiding multiple EDI connections Introduction of SAP s Freight Cost document to provide overall cost transparency View shipment details including all types of assessorial charges Compare estimate and actual payment all within one document Integrating on-site scales directly into SAP for consistent, accurate, real-time shipping weights Flexible Shipping/Receiving queue for scheduling appointment times specific loading locations

19 Savings well ahead of schedule Savings Projection was $xx Million savings over six years Actual savings of 67% of the projected total through first 2.5 years Primary savings areas include Prepaid and Add for Predictable accessorials LTL Routing guide compliance Prior to TMS, BASF Corporation tendered 70% of loads to preferred carriers Non preferred carriers typically have a freight premium of 30% BASF Corp. now tenders 95%+ of loads to preferred carriers, resulting in lower freight costs

20 Monetary Benefits Major savings areas Additional savings areas include Commercial effectiveness (providing cost insight to RBUs) System savings (eliminated Site Flow, TotalRate systems) Operational efficiencies (auto tender, rail car routing) Example of 1000 shipments, pre TMS 30% - non preferred carrier, post TMS 95% - preferred carrier

21 Transferability TMS has been transferred across BASF in North America TMS functionality migrating to COBALT with Reload. TMS has proven to resolve the three main elements that were missing in our previous transportation management processes and systems Reduced costs of transportation planning through process standardization Freight cost transparency through system harmonization Reduced costs of managing transportation operations through automation

22 Transportation Management System SCM (APO - TPVS) Elemica Accept or Reject Carrier s system Sales Orders, Stock Transfers, Delivery Notes Shipments, Delivery Notes Website SAP R3 Shipping / Receiving Queue

23 Elemica Role We contacted Elemica early to be sure they were involved from the beginning. Developed list of road carriers for Elemica to assess and implement Two pronged approach Connectivity oriented carriers (typically EDI) Approach them with connectivity solution Non-connectivity carriers Approach them with web based solution Translink was used

24 Elemica Role BASF send letter to carriers explaining project and Elemica s role Elemica then managed all the connectivity tasks based on prioritized list Carrier capability was widely variable Elemica was responsible for managing each onboarding Testing was first done by Elemica with the partner before we had to get involved. Pricing was based on a fixed price for connected carrier and a fixed price for web based carrier

25 Elemica Role Project spanned many months. As we added sites, new carriers were added. Elemica managed each new list of carriers based on the prior month s list. Each incremental onboarding went smoothly This system is now part of a global system. The same methodology outlined here will be applied to other regions.

26 Elemica Role - Benefits for BASF Costs were predictable and manageable. There was no way we could have done this as efficiently as Elemica did for the cost. Elemica managed the connectivity tasks so we can focus on the internal tasks Testing was nearly complete before we were involved Elemica was a true partner in the process. They were seen as part of the project rather than an auxiliary service provider As we rolled this out to newly acquired sites, new carriers, etc Elemica just added to the list and completed the connectivity in a business as usual fashion.

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