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Chemical ... Evolving operations and reporting standards are raising expectations for responsible business practices, bringing greater attentiveness to environmental, health and safety

Sep 25, 2020

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  • Chemical

    Breaking through the barriers to

    dramatically enhanced revenue, EBITDA

    results, and risk management across a

    dynamic chemical and process

    industry value chain.

    MainePointe.com

    Boston Vancouver Schaffhausen Shanghai

    http://www.mainepointe.com

  • A New Pathway to a More Dynamic, Fully Optimized Strategic Supply Chain

    2

    Maine Pointe drives profitable business transformation through

    n Operations Excellence

    n Strategic Procurement

    n Logistics

    …and uniquely integrated approaches to Sustainability and Organizational Improvement.

    A New Pathway

  • 3

    “The Maine Pointe team

    applied a ‘roll up your

    sleeves and get to work’

    approach to our engagement

    that identified areas for

    improvement as well as

    detailed processes to

    implement and monitor

    the success in sales and

    operations planning,

    maintenance and operations

    excellence. Their team

    blended seamlessly with

    our personnel. We feel that

    our investment in Maine

    Pointe was well worth it; the

    project rendered the tools

    and processes necessary for

    us to sustain improvements.”

    Luther C. Kissam, IV

    President

    Albemarle Corporation

    For some time now, chemical companies have been diversifying their mix of products and customers to improve margins and stimulate more consistent revenue growth. Concerns over economic factors – such as unstable foreign exchange rates and fluctuating oil prices – have focused industry leaders on selling assets and acquiring new businesses as a means to gaining market share and enhancing EBITDA.

    While this strategy has been successful, it has often injected more

    complexity into operations or instigated havoc upon the supply chain.

    There are factors that are now converging to alter the competitive context

    – such as greater demand for ever more scarce raw materials, rising energy

    costs, and demographic shifts. Smart CEOs are already responding with a

    greater emphasis on differentiated products and service models in addition

    to implementing alternative production methods (such as lean principles

    and automation). They are also transitioning to greater segmentation of

    their customers’ supply chain requirements.

    Regionally-focused chemical companies are looking to scale globally

    at the same time that the large market leaders are going more vertical

    in an effort to create new niche opportunities. Cyclical sectors, such as

    commodity chemicals, are restructuring as those companies become more

    specialized to ward off encroachment from private equity firms looking for

    deal opportunities.

    Companies expanding overseas are navigating tax and regulatory

    obligations along with license to operate and stakeholder issues. As they

    divest from their installed base and relocate operations to more financially

    advantageous footprints – issues of centralization, rationalization, cost

    management and intellectual property engender tensions with tax

    authorities in a complex web of global asset restructuring. Ongoing

    development issues in emerging markets such as Eastern Europe, India,

    and China are requiring companies to apply new approaches to a range

    of operational concerns.

  • Chemical CEOs continue to be concerned about market and financial

    volatility amidst global trends toward more regulation, proactive

    government oversight, and public sector investments in commerce.

    Nevertheless, they are hedging their odds and penetrating new markets –

    especially regions where their presence may be limited or non-existent – such

    as China and Brazil. Rather than building research facilities, their focus is

    on scaling manufacturing operations, leveraging a range of local resources

    – including human capital (via training and development) – and engaging

    new customers.

    Attracting and developing the next generation of skilled workers at all

    levels remains a potential impediment for capacity building in the near

    term. As company leaders address this gap, more senior personnel are

    being pulled from their native posts and assigned to new, or developing,

    market initiatives to help ensure a successful build out.

    Evolving operations and reporting standards are raising expectations

    for responsible business practices, bringing greater attentiveness to

    environmental, health and safety concerns as well as transparent

    financial practices. Company leaders are increasingly viewing safe work

    environments, sound financial standards, reducing pollution levels, and

    improving energy and resource utilization as pathways to more

    durable competitiveness.

    Don’t Be Fooled into Going it Alone

    Chemical and process industry companies are compelled to develop

    operational efficiencies and quality management standards unlike what

    they have achieved before. They must reinvent many aspects of their

    business model in order to support a renewed priority around optimizing

    the supply chain as a driver of operations excellence, competitive

    agility, and risk resiliency.

  • 5

    Achieving supply chain optimization will require greater utilization of

    e-procurement technologies, lean manufacturing, outsourcing non-

    core activities, reducing cash-to-cash cycles and minimizing material

    inventories. By focusing on the full range of operational improvements –

    including enhanced sales and operations planning, distribution and

    delivery – companies can significantly lower costs while converting their

    supply chain into a differentiated driver of perpetual growth.

    Many chemical leaders have not focused on building a depth of supply

    chain expertise or transferring best practices from other industries. Their

    teams have necessarily concentrated on solving day-to-day issues and

    executing on current initiatives to keep up with immediate priorities.

    It’s common to underestimate the importance of practical, on-the-ground

    supply chain experience to deliver results quickly. Companies tend to

    go it alone but if they do hire a consultant they retain one with singular

    chemical industry experience. Trouble is, those options are what everyone

    else does and the result is more of the same.

    Collaborating with a trusted advisor who can integrate extensive chemical

    and process industry experience with cross-modal logistics expertise,

    frontline operations implementation, and multi-industry insights on global

    procurement practices can be a game-changing tactic. Engaging such a

    resource can put the best ‘feet on the ground’ to achieve bottom-line

    results more quickly than an internal team can on its own.

    As a result, company leaders and facility managers become better able to

    calculate and build capacity for meeting true real-time demand. They’ll

    no longer be held hostage to reactionary or impulsive responses to

    expectations that are not validated.

  • 6

    The Difference We Make

    Maine Pointe works with all types of chemical and process industry companies

    – from basic, commodity and agricultural to specialty and consumer entities.

    We dramatically compress the cycle to greater profitability and cash flow with

    less upfront investment in time and resources.

    Our specialists offer deep frontline experience across the entire chemical

    and process industry value chain to effectively align facilities, capabilities,

    processes and strategic initiatives for long-term advantage. By leveraging

    the right combination of functional competencies, we deliver innovative

    cost-saving business transformation solutions that are accountable and

    measurable. We reorientate supply chain operations from the traditional

    Total Cost of Ownership model to Maine Pointe’s next-generation Total Value

    Optimization (TVO) framework.

    Redefining the Results You Should Expect

    Maine Pointe consistently delivers an average engagement ROI of 6:1

    to 10:1, supported by a guaranteed 2:1 ROI based on annualized savings.

    Our industry engagement successes include:

    Saving 7-10% in the direct spend for key raw materials of many

    specialty chemical manufacturers – including companies that serve

    the garment, pharmaceutical, consumer product, film, food thickener

    and LCD screen markets.

  • 7

    Achieving a 4:1 ROI in Procurement for a cosmetic formulator.

    Saving 6-18% for a number of different industry leaders by optimizing

    their network, upgrading supplier contracts, and shifting truck load to rail.

    Reducing Logistics costs 17% for a producer of refractory products.

    Assisting in removing 8,000 trucks from the Logistics spend

    of a synthetic polymer company while significantly advancing

    achievement of their corporate Sustainability goals.

    Improving Overall Equipment Effectiveness (OEE) for an agricultural

    chemical company from a 52% rate to 63% and

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