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Two corporate giants said cloud technology is providing them with improved supply chain collaboration and visibility, which is saving them money, speeding deliveries, boosting customer satisfaction and supporting more collaborative work environments.
Senior managers from Dow Chemical and Syngenta explained their deployments of GT Nexus, a cloud-based supply chain collaboration platform, at Inforum, the user conference that ERP vendor Infor held this year in New York. Infor acquired GT Nexus in 2015.
Jeffrey Tazelaar, global supply chain visibility leader at Dow Chemical, described the two-year-old project, noting the company was looking to streamline logistics processes and get better, near-real-time visibility into goods in transit.
Real-time visibility was a highly debated term inside Dow, which is based in Midland, Mich. and had sales of $49 billion in 2015, putting it at 56 on the Fortune 500 list of the U.S.'s largest public companies.
Tazelaar agrees with a saying from a favorite consultant of his: Not all data needs to fly first class. "I've pulled out tracking systems because watching a blip go across the screen doesn't get us what we need to know," he said.
'Excel is not going to cut it'
SAP ERP serves as Dow's transactional system, and the company is investing heavily in a transportation management system that will do the same for logistics.
"These are global projects with rapid deployment schedules," Tazelaar said. The new software provides metrics and dashboards designed to get data from the supply chain network into users' hands in the context that is appropriate for the decisions to be made.
"[Microsoft] Excel is not going to cut it," he said. "I know we will have won when we don't put Excel again on our computers within the company. We've got a long ways to go still."
Tazelaar said Dow's "very, very complicated" supply chain was less like a chain than a web. For example, one process for packed marine cargo took 170 steps from the time the order was taken to when the goods got to the customer.
Jeffrey Tazelaarglobal supply chain visibility leader, Dow Chemical
By adopting GT Nexus, Dow is trying to build a supply chain visibility platform that will deliver one version of the truth.
"How we manage and work with 3PLs [third-party logistics providers] and 4PLs will change. It won't be turnkey services, as we will need that data within our own systems. But the partnership will now focus on value," Tazelaar said, also mentioning a focus on places where supply chain collaboration will allow each partner to contribute its strengths to the whole.
Rail car performance improves
Existing areas have also benefitted, including a rail logistics system Tazelaar called ripe for supply chain optimization. The system was largely used to improve safety and answer the classic "where's my stuff?" questions of logistics, but was not about delivering goods more efficiently.
Now, the GT Nexus platform furnishes Dow with data on 20,000 rail cars. "We saw a 4% improvement in on-time delivery," Tazelaar said.
Meanwhile, the time it takes to send a train from a Dow facility to a sister plant or customer location and back improved by more than three days, which could have significant impact on Dow's fleet. "We'd love the volume to continue to increase and the number of rail cars to go down," Tazelaar said.
Furthermore, rail car maintenance shops now have a better idea of where cars are, making it easier to plan the work, bring cars in at the right time and achieve quicker turnarounds, he said.
In addition, the ability of GT Nexus to overlay weather patterns on logistics data proved its value when Tropical Storm Bill struck Texas, Oklahoma and the Midwest last summer.
"We were able to figure out and determine that 5,900 cars were in the impact zone, and we could reach out and proactively manage it," Tazelaar said.
Resilience is another benefit of improved supply chain collaboration and visibility, according to Tazelaar. A fire onboard a Maersk Line container ship off the coast of China this year provided a good example.
"It took our supply chain team less than 10 minutes to determine what containers were on that vessel," he said. The process used to take significantly longer, though he wouldn't specify how much.
Dow also hopes the reduced time spent on logistics will enable sales teams to increase revenue. "It is our No. 1 benefit" of supply chain visibility, Tazelaar said.
Supply chain collaboration links Syngenta with outsourcing partners
Marion Matthewman, head of global logistics at Syngenta, a Swiss agrochemical and biotech company with sales of $13 billion, said growth prompted the company to embark on a supply chain visibility project with several partners, including GT Nexus. The 16-year-old company employs 28,000 people in 90 countries and supports a network of more than 450 million farms.
"The logistics costs in Syngenta were growing at the same rate as the company, Matthewman said. "This was a clear indication that we were not optimizing our cost base for moving our products around the world. We had a lack of visibility."
Syngenta also had a significant footprint in more than 400 third-party warehouses, but lacked the data to decide if that number was good or bad, she said.
In response, Syngenta used GT Nexus as a hub for interacting with a small group of outsourcing partners.
"We didn't want to become experts in logistics," Matthewman said. "So this was a conscious decision by the company to actually outsource logistics."
The other supply chain collaboration partners Syngenta works with are management and IT consultancy Accenture, as well as the 4PLs Damco, DHL and XPO Logistics.
Though Matthewman claimed the project has saved $100 million, she said "the journey together wasn't really about optimizing our cost base." Instead, it was directed more towards allowing Syngenta to better understand its crop protection and seed businesses and to measure those businesses more effectively.
Matthewman also stressed the importance of a governance model setup to ensure the 4PLs deliver what the company needs.
However, giving outsourcing partners the authority to choose and contract with suppliers caused some concern within the company. "The eyebrows are going up and [people are saying] 'really? You're doing that?'" Matthewman said.
GT Nexus is the integrator in the group, "the principle part of our model that actually sits [in the middle] and supplies the information and the data," she said. It serves as the single point of truth for an infrastructure that contains multiple ERP systems.
GT Nexus also allows Syngenta to see, for the first time in some cases, where its goods are and to track metrics such as on-time delivery rates.
This improved supply chain visibility is helping Syngenta employees to make better decisions.
"This has actually been seen as a fantastic success and a game changer [among] our leadership," Matthewman said. "For us, the digitization is an enabler. How the people work together in this transformation in delivering this is the thing that's made it work."
The system also reinforces Syngenta's culture of openness.
"Feedback is a gift," Matthewman said, and employees are using their new supply chain visibility to provide a lot more of it.
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