Chemical Supply Chain

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


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


Ineos O&P sites
Bamble (No)
Bamble (No)
140 Kt/y LDPE
140 Kt/y LDPE
Grangemouth (UK)
Grangemouth (UK) 170 Kt/y PP
170 Kt/y PP
165 Kt/y HDPE
165 Kt/y HDPE
310 Kt/y LLDPE
310 Kt/y LLDPE
285 Kt/y PP
285 Kt/y PP
Köln (De)
Köln (De)
Lillo (Be)
Lillo (Be) 220 Kt/y LLDPE
220 Kt/y LLDPE
440 Kt/y HDPE
440 Kt/y HDPE 360 Kt/y LDPE
360 Kt/y LDPE
90 Kt/y PP
90 Kt/y PP
Sarralbe (Fr)
Sarralbe (Fr)
Geel (Be)
Geel (Be) 195 Kt/y HDPE
195 Kt/y HDPE
290 Kt/y PP
290 Kt/y PP 270 Kt/y PP
270 Kt/y PP

Lavera (Fr)
Lavera (Fr)
230 Kt/y HDPE
230 Kt/y HDPE Rosignano (It)
Rosignano (It)
150 Kt/y PP
150 Kt/y PP 200 Kt/y HDPE
200 Kt/y HDPE


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 !!


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


Ex-Works

VENDOR BUYER
Load & Carry

Costs

Risks

Customs
Clearance


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 docs
Exporter copy to Vendor
Export in EEC :
– Require Buyer VAT nbr on Sales to recover VAT


FCA “Location”

VENDOR BUYER
Deliver unloaded Main leg carriage

Costs
Customs
Clearance Risks


FCA

VENDOR BUYER

Load Main leg carriage

Costs

Risks

Customs
Clearance


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


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.



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



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



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 !



Conclusion
One big issue = communication around loading, at :
– Ordering time
– Booking time
– Loading time

modern communication means can help


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


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


INEOS Standard Process


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


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


INEOS Fork Process

HAULIER
A

INEOS TRANSWIDE COLLECT HAULIER
SAP CUSTOMER B

HAULIER
C


INEOS Fork Process Benefits
effortless
– 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


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


INEOS Triangle Process

COLLECT
CUSTOMER

INEOS TRANSWIDE
SAP

HAULIER
HAULIER C
HAULIER B
A


INEOS Triangle Process Benefits
effortless
– 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


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


INEOS Shipment Notification


INEOS Shipment Notification Benefits

– Actual Delivery information provided to customer : ASAP and
effortless
– Can immediately invoice final customer with actual volume
dispatched
Benefits to INEOS
– Saves the time of communicating manually actual delivery
information : ~7 minutes / collection


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


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
Triangle process
– Already 4 top volume customers


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 chains
the more efficient Customer Collection will be


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


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