Ignite 2015 NA Procurement Breakout Session - "Creating a Supplier Collaboration Program"
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This document discusses a supplier collaboration project between Dow AgroSciences and its suppliers. The project aims to improve communication and collaboration through an Elemica portal that allows for order responses, advanced shipping notices, forecast sharing, and eInvoicing. The project scope and timeline involve onboarding suppliers to the portal over 2-4 weeks. Initial feedback from suppliers and Dow has been positive, with productivity improvements and potential cost savings. Key learnings included involving stakeholders, showing value to suppliers, and managing change.
Ignite 2015 NA Procurement Breakout Session - "Creating a Supplier Collaboration Program"
- 1. Supplier Collaboration Ann Adams October 20, 2015
- 2. | 2 § Dow AgroSciences Introduction § Supplier Collaboration § Opportunity § Scope / Timeline § Results § Learnings § Discussion Discussion Outline
- 3. | 3 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.
- 4. | 4 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%
- 5. | 5 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
- 6. | 6 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.
- 7. | 7 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
- 8. | 8 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
- 9. | 9 Elemica Scope / Timeline Supplier (portal) Dow SAP (idoc) Orders Order Response Advanced Ship Notice Order Response Invoice Forecast Advanced Ship Notice Invoice
- 10. | 10 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
- 11. | 11 • 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
- 12. | 12 • Availability of supplier • Start slow to go fast • Don’t underestimate change management internally § Get key stakeholders involved early. • Show value to supplier Learnings
- 13. | 13 Thank You DOW RESTRICTED