Chemical Supply Chain

Copyright ©INEOS 2006

The Challenge of

Efficient Customer Collection

LOGICHEM

21 April 2010

Prepared by Vincent GAUTHIER


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


�

�

�

�

Rosignano (It)200 Kt/y HDPE

Rosignano (It)200 Kt/y HDPE

Lavera (Fr)230 Kt/y HDPE150 Kt/y PP

Lavera (Fr)230 Kt/y HDPE150 Kt/y PP

Köln (De)220 Kt/y LLDPE360 Kt/y LDPE

Köln (De)220 Kt/y LLDPE360 Kt/y LDPE

Lillo (Be)440 Kt/y HDPE

90 Kt/y PP

Lillo (Be)440 Kt/y HDPE

90 Kt/y PP

Geel (Be)290 Kt/y PP

Geel (Be)290 Kt/y PP

��

Sarralbe (Fr)195 Kt/y HDPE270 Kt/y PP

Sarralbe (Fr)195 Kt/y HDPE270 Kt/y PP

�

Ineos O&P sites

Grangemouth (UK)165 Kt/y HDPE310 Kt/y LLDPE285 Kt/y PP

Grangemouth (UK)165 Kt/y HDPE310 Kt/y LLDPE285 Kt/y PP

Bamble (No)140 Kt/y LDPE170 Kt/y PP

Bamble (No)140 Kt/y LDPE170 Kt/y PP

�


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 docsExporter copy to Vendor

� Export in EEC : – Require Buyer VAT nbr on Sales to recover VAT


FCA “Location”

VENDOR BUYER

Main leg carriage

Costs

Risks

Customs

Clearance

Deliver unloaded


FCA

VENDOR BUYER

Costs

Risks

Customs

Clearance

Main leg carriageLoad


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

INEOS

SAPTRANSWIDE

COLLECT

CUSTOMER

HAULIER

A

HAULIER

B

HAULIER

C


INEOS Fork Process Benefits

� Benefits for Customers– Delivery Reference provided to customer : ASAP and

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

INEOS

SAPTRANSWIDE

COLLECT

CUSTOMER

HAULIER

A

HAULIER

B

HAULIER

C


INEOS Triangle Process Benefits

� Benefits for Customers– Delivery Reference provided to customer : ASAP and

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

� Benefits for Customers– 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 chainsthe 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


Chemical Supply Chain

Education

customer sidecopyright

vatcopyright ineos

warehousingcopyright

ineos plant

customerscopyright ineos

ineos customer service

standard offer ineos

exworkscopyright ineos