Post on 30-Dec-2015
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JILL MIKROS[ASUG INSTALLATION MEMBER MEMBER SINCE: 2000
MARCDERE LOUIS[ASUG INSTALLATION MEMBER MEMBER SINCE: 2009
RAJEEV KAPUR[ASUG INSTALLATION MEMBER MEMBER SINCE: 2008
This presentation is copyrighted: 2010 E.I. DuPont de Nemours & Company, All rights reserved
Manage Uncertainty in Chemicals via Inventory Optimization
Ray AdamsSAP, IBU Chemicals
David GiacominiAnand Sundar
DuPont Company
Chris PottsEastman Chemical
Real Experience. Real Advantage.
[ Spot Oil Prices – Department of Energy
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Real Experience. Real Advantage.
[ Relationship to Inventories and Price Indices
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Invy/Sales Ratio
IPEX Price Index
Source: US Bureau of Census Inventory to Shipments Ratio, ICIS Pricing
Real Experience. Real Advantage.
[ Powerful Trends Are Re-Shaping Chemicals Business Worldwide
Globalization
New opportunities and competitors
Consolidation / M&A IP Management
Innovation & Portfolio Management
Innovation networks and Hybrid Development
Portfolio optimization Alternative Feedstocks
Compliance
Environmental compliance
Global trade compliance
Risk Management
Price volatility Cost pressures Proximity to raw
material sources
Energy & Raw Materials Management
Operational Excellence & Business Network Innovation Operational Excellence & Business Network Innovation
Tightening up of Working Capital
Cash is King, Increased Focus on Cash-to-Cash cycle
Prepare for the Unexpected: Strive for Transparency
Sustainability becomes a Board Room Topic
Challenging Prices and Reducing Margins
Cost Reduction
Focused Investment
?
Real Experience. Real Advantage.
[
Canada3%
Latin America12%
Developed Asia9%
Emerging Asia11%
Developed EMEA20%
U.S.38%
Emerging EMEA
7%
Company Profile$26.1B
2009 Company Sales• DuPont is the world’s most dynamic
science company • Creating sustainable solutions essential to
a better, safer, healthier life for people everywhere
• Founded in 1802• Operating in more than 70 countries• Total 2009 Sales $26.1B
Real Experience. Real Advantage.
[ DuPont’s SmartOps® Journey
Laying the groundwork
•SmartOps® Forum
•Initial business discussions
•Agreement to move ahead with POVs
Proofs ofValue
•SmartOps® led proofs of value for 2 businesses
•Identified business value for MIPO
•Made decision to license SmartOps®
ManualImplementations
•4 businesses
•Developed data management processes
•Demonstrated SmartOps® value
Automation &Integration
•Automate the data extract, transform, and load processes
•Address requirements for scenario management
•Standardized support model
Real Experience. Real Advantage.
[ DuPont Business Requirement
Business Unit F – SAP R/3
Business Unit S – SAP R/2
“How do we provide a scalable architecture that can integrate supply chain data from several heterogeneous IT systems
Business Unit A – SAP APO 4.1
Business Unit E – Legacy application
Business Unit N MIMI
Business Unit C – SAP APO 3.0Business Unit P - Legacy
Real Experience. Real Advantage.
[
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SAP R3
MIMI
SmartOps® MIPO
LTT
SAP-APO
INFORMATICA Staging Area
Data Gateway
Time Phased SS Levels
BW
1a
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5 4
3
2
Excel / other
1b
Validate and Update SS in APO
Manu
Non – SAP Systems
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Error Handling and Resolution
Architecture for SmartOps® Integration
Data Store
Real Experience. Real Advantage.
[
All SmartOps® BUs begin using integrated functionality
First BU begins using fully integrated functionality
The Journey Continues
Who we are A global manufacturer of chemicals,
plastics and fibers headquartered in Kingsport, Tennessee
A company dedicated to economic success, environmental stewardship and social responsibility
A leading producer of coatings, adhesives, specialty plastics and cellulose acetate fibers
A manufacturer of PET polymers for packaging
The first company to commercialize a gasification facility in the U.S., in 1983, which is operating at industry-leading performance
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What We’ll Cover …
Achieving the Right Balance – Why Eastman chose SAP Enterprise Inventory Optimization by SmartOps® (SAP EIO)
Project Tools and Processes: A Six Sigma Journey Reporting – Measures and Dashboards Results and Future Wrap-up
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Achieve the Balance
Determine optimal inventory
strategy
Execute the optimal strategy
Check results and act to reoptimize
the strategy
Some key stakeholders:• Customers• S&OP• Supply chain• Procurement• Logistics• Manufacturing• Business Manufacturing cost
Profitability
$$
Inventory Cost
Customer service level
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Started with a Pilot/Proof of Concept
Work began: July 2008• Pilot area: 90 items, 15 plants/warehouses
Manual models of pilot area: Oct 2008• Decided upon major parameters and settings
Automated pilot area: Feb 2009 Concluded pilot project: May 2009 Company wide rollout: June 2009 SharePoint reporting: Oct 2009 SharePoint dashboard: Dec 2009
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Parallel Project Efforts
Business Process Design using Six Sigma
S&OP Business process design
team Supply chain management Supply planning Manufacturing Procurement Software implementation
team
Software Tool Implementation & Configuration
Technical team Business process design
team Supply chain management
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Business Process Design Using Six Sigma
Define• Stakeholder matrix
• Interview guide and plan
• The Affinity Diagram (KJ Analysis) – key process needs to meet
Conceptualize• Process concept generation to meet key needs
Design of the business process Optimize – Testing and improving the process Control – Establishing the control plan for the process
Inventory Measures
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1. Inventory level status – Current Inventory against limits 2. Percent in control – % of KGs in control – weighted 3. Percent touched safety stock – Percent of items that touched
safety stock in last 90 days
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Project Benefits
Initial results are consistent with our expectations Demonstrating relationship of forecast accuracy, customer service,
master data, and inventory investment Identifying the right number, and identifying levers to improve the
summation of the variables Accelerating the rollout to other groups within our company using
black belts
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7 Key Points
Master data is critical and expect to spend significant amounts of time to correct
Accurate forecasts are foundational to optimizing inventories Technical changes have been easier to overcome than business
process redesign Measures and dashboards helpful to speed adoption SAP EIO by SmartOps while a good tool, is NOT a silver bullet SAP connectivity is not a simple out-of-the-box connection Expect continual iterations and loops; MANY small steps and
changes are needed to complete the journey
Real Experience. Real Advantage.
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[
] Thank you for participating.
David GiacominiDavid.Giacomini@usa.dupont.com
Anand Sundaraksundar@linearlogics.com
Chris Pottswpotts@eastman.com