Supply Chain Operations

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• Supply Chain Operations

2
Agenda

• Company Overview
• Supply Chain Structure
• Inventory Management
• Inbound and Outbound Logistics
• Analysis of challenges encountered
• Recommendations

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Overview

• 101 years old, HQ in the Netherlands
• Annual sales of 6.7 billion
• Strategic Clusters

• 101 years old, HQ in the Netherlands
• Annual sales of 6.7 billion
• Strategic Clusters

Life Science Products
Performance Materials
Industrial Chemicals

• DSM Singapore Engineering Plastics for the
  Electrics Electronics Markets

• DSM Singapore Engineering Plastics for the
  Electrics Electronics Markets

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The Supply Chain
Plastic Molders
Raw Materials

• DSM Singapore

Assembly Plants
Manufacturing Plants
Individual Client Company
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The Supply Chain
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DSM

• Inventory Management

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Replenishment Policy

• Reliability is a priority
• Adapts and adopts EOI
• Review period 1 week
• No hard and fast rule
• Safety stock level not fixed

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Forecasting

• Forward Planning
• 3-month forecasts from sales regions
• Order quantity lower than aggregated forecasts
• No EDI used
• Different ERP systems

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Warehousing and VMI

• No storage problem
• Standard packaging
• Provides VMI
• Molex example
• Keeps inventories for Molex
• Delivers supplies every week
• No EDI
• Trust is essential

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Challenges

• Stockouts
• Irregular demand and supply
• Transport by air
• Negotiate with other customers
• Inaccurate forecasts
• Bullwhip effect
• Inventory policy
• No specific guidelines
• Based solely on managers expertise

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DSM

• Inbound and Outbound logistics

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In/out bound

• Inbound COSCO
• Outbound OOCL and COSCO

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Challenges

• Late or non-deliveries
• Lack of stock
• Difficult access to China
• Overcrowding
• Strikes
• Reliability is a service qualifier
• INCO terms

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DSM

• Analysis

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Summary of Problems

• One main cause.
• LACK OF ACCURATE FORECASTS

• Unreliable demand
• Unreliable supply
• Stockouts
• Damage to reputation
• Increased freight costs
• Red tape
• E.g. China

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Causes of Inaccurate Forecasts

• Final products have short PLC
• Innovative and novelty products
• No historical demand information
• Lack of information integration
• No EDI
• Different ERP systems
• Long lead time
• Long planning horizon

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Recommendations

• Outside DSMs control
• Short PLC
• Red tape
• Obtain more accurate demand data
• Supply chain integration
• Integrate information systems
• Form alliances

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THE END

• Thank you!
• Proudly brought to you
• Benny Lai
• Grace Ting
• Guus Goorts
• Ronald Kwan
• Lin Sijie