DSM presentation

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DSM presentation

  1. 1. Supply Chain Operations
  2. 2. Agenda <ul><li>Company Overview </li></ul><ul><li>Supply Chain Structure </li></ul><ul><li>Inventory Management </li></ul><ul><li>Inbound and Outbound Logistics </li></ul><ul><li>Analysis of challenges encountered </li></ul><ul><li>Recommendations </li></ul>
  3. 3. Overview <ul><li>101 years old, HQ in the Netherlands </li></ul><ul><li>Annual sales of € 6.7 billion </li></ul><ul><li>Strategic Clusters: </li></ul>Life Science Products Performance Materials Industrial Chemicals <ul><li>DSM Singapore: Engineering Plastics for the Electrics & Electronics Markets </li></ul><ul><li>101 years old, HQ in the Netherlands </li></ul><ul><li>Annual sales of € 6.7 billion </li></ul><ul><li>Strategic Clusters: </li></ul><ul><li>DSM Singapore: Engineering Plastics for the Electrics & Electronics Markets </li></ul>
  4. 4. The Supply Chain <ul><li>DSM Singapore </li></ul>Raw Materials Manufacturing Plants Plastic Molders Assembly Plants Individual Client Company
  5. 5. The Supply Chain DSM Singapore China 80% Europe 5% Japan 5% U.S . 5% India 5% China Taiwan Korea S.E.Asia India Plants Sales Regions
  6. 6. DSM Inventory Management
  7. 7. Replenishment Policy <ul><li>Reliability is a priority </li></ul><ul><li>Adapts and adopts EOI </li></ul><ul><li>Review period – 1 week </li></ul><ul><li>No hard and fast rule </li></ul><ul><li>Safety stock level not fixed </li></ul>
  8. 8. Forecasting <ul><li>Forward Planning </li></ul><ul><ul><li>3-month forecasts from sales regions </li></ul></ul><ul><li>Order quantity lower than aggregated forecasts </li></ul><ul><li>No EDI used </li></ul><ul><li>Different ERP systems </li></ul>China Taiwan Korea S.E.A India Sales Region DSM China Europe Japan U.S India Plants Forecast Information Flows
  9. 9. Warehousing and VMI <ul><li>No storage problem </li></ul><ul><ul><li>Standard packaging </li></ul></ul><ul><li>Provides VMI </li></ul><ul><ul><li>Molex example </li></ul></ul><ul><ul><ul><li>Keeps inventories for Molex </li></ul></ul></ul><ul><ul><ul><li>Delivers supplies every week </li></ul></ul></ul><ul><ul><ul><li>No EDI </li></ul></ul></ul><ul><ul><ul><li>Trust is essential </li></ul></ul></ul>
  10. 10. Challenges <ul><li>Stockouts </li></ul><ul><ul><li>Irregular demand and supply </li></ul></ul><ul><ul><li>Transport by air </li></ul></ul><ul><ul><li>Negotiate with other customers </li></ul></ul><ul><li>Inaccurate forecasts </li></ul><ul><li>Bullwhip effect </li></ul><ul><li>Inventory policy </li></ul><ul><ul><li>No specific guidelines </li></ul></ul><ul><ul><li>Based solely on manager’s expertise </li></ul></ul>
  11. 11. DSM Inbound and Outbound logistics
  12. 12. In/out bound <ul><li>Inbound – COSCO </li></ul><ul><li>Outbound – OOCL and COSCO </li></ul>
  13. 13. Challenges <ul><li>Late or non-deliveries </li></ul><ul><ul><li>Lack of stock </li></ul></ul><ul><ul><li>Difficult access to China </li></ul></ul><ul><ul><li>Overcrowding </li></ul></ul><ul><ul><li>Strikes </li></ul></ul><ul><li>Reliability is a service qualifier </li></ul><ul><li>INCO terms </li></ul>
  14. 14. DSM Analysis
  15. 15. Summary of Problems <ul><li>Unreliable demand </li></ul><ul><li>Unreliable supply </li></ul><ul><li>Stockouts </li></ul><ul><ul><li>Damage to reputation </li></ul></ul><ul><ul><li>Increased freight costs </li></ul></ul><ul><li>‘ Red tape’ </li></ul><ul><ul><li>E.g. China </li></ul></ul><ul><li>One main cause…. </li></ul><ul><li>LACK OF ACCURATE FORECASTS </li></ul>
  16. 16. Causes of Inaccurate Forecasts <ul><li>Final products have short PLC </li></ul><ul><ul><li>Innovative and novelty products </li></ul></ul><ul><ul><li>No historical demand information </li></ul></ul><ul><li>Lack of information integration </li></ul><ul><ul><li>No EDI </li></ul></ul><ul><ul><li>Different ERP systems </li></ul></ul><ul><li>Long lead time </li></ul><ul><ul><li>Long planning horizon </li></ul></ul>
  17. 17. Recommendations <ul><li>Outside DSM’s control: </li></ul><ul><ul><li>Short PLC </li></ul></ul><ul><ul><li>Red tape </li></ul></ul><ul><li>Obtain more accurate demand data </li></ul><ul><ul><li>Supply chain integration </li></ul></ul><ul><ul><li>Integrate information systems </li></ul></ul><ul><ul><li>Form alliances </li></ul></ul>
  18. 18. THE END Thank you! Proudly brought to you: Benny Lai Grace Ting Guus Goorts Ronald Kwan Lin Sijie

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