Download - Chemical Supply Chain
DOW Business Services…
Accelerating Success
Powering up to serve
Dow Businesses and JVs
Niklas Meintrup
Director
Dow Business Services Pacific
Turning Feedstocks into Essential Products
Salt Gas
Oil
Biomass
Coal
Recycle
Electronics
Agriculture
Wire & Cable
Coatings
Automotive
Building & Construction
Our Industry
� 9,000 global employees in Business Services
� 45,000 customer ship-to locations
� Shipping sites in 200 countries
� 2.5 million shipments each year
� To-thirds of volume by land; one-third by
marine
� 20% of shipments involve international
border crossings with Customs clearance
� 80% not hazardous; 1% highly hazardous
� 99.97% incident-free
� Comprehensive Sustainability Strategy for Supply Chain and Purchasing.
Dow’s Global Supply Chain: Fast Facts
26,000 railcars –second largest fleet in the world
300 warehouses & 122 terminals
Dow’s Evolving Business Model
20%10%
30% 40%
Operating Margins
0%
Market-Driven
Performance
0% 50% 60%
10%
20%
30%
40%
Highly Differentiated
Se
llin
g,
Ad
min
, R
&D
Ex
pe
nse
s %
of
Sa
les
Gross Margin % of Sales
10% 20%
Basics
Highly Differentiated
Te
ch
no
log
y D
iffe
ren
tiatio
n
Customer Intimacy
Coatings & InfrastructureCoatings & Infrastructure
Performance ProductsPerformance Products
Basic ChemicalsBasic Chemicals
PerformancePerformance
BasicsBasics
Hydrocarbons & EnergyHydrocarbons & Energy
Basic PlasticsBasic Plastics
Electronic & Specialty MaterialsElectronic & Specialty Materials
Health & Agricultural SciencesHealth & Agricultural Sciences
Performance SystemsPerformance Systems
Market DrivenMarket Driven
Dow’s Business Model – Three Integrated Parts
Coatings & Infrastructure$6.2
Electronic &Specialty Materials$5.7
Basic Plastics$14.2
Basics
Basic Chemicals
$4.3
Hydrocarbons & Energy
$9.0
Advanced Materials
Note: All figures represent 2008 pro forma sales, in billions of dollars
Performance Products
$13.1
Performance Systems$8.2
Performance Products & Systems
Health & Agricultural Sciences$4.6
Health & Agricultural Sciences
Dow’s New Operating Segments
Business Services …
Gearing Up to Power the New Dow
� Drive Agility
� Drive Customer focus
� Improve Profitability
� Enhance Flexibility
� Enable Innovation
20%10%
30% 40%
Operating Margins
0%
Market-Driven
Performance
0% 50% 60%
10%
20%
30%
40%
Highly Differentiated
Sell
ing
, A
dm
in,
R&
D E
xp
en
ses %
of
Sale
s
Gross Margin % of Sales
10% 20%
Basics
Business Services
� Business Services announced late 2008
� Supports Dow’s operating model
� Capitalizes on strong foundation of functional excellence
� Organized around service capabilities delivered by: � Customer Service, Supply Chain, Environment Health & Safety,
Purchasing, Information Technology, Facilities Management, Six Sigma, Process-focused elements of Finance and HR
Business Services Vision
To achieve this vision, we are:
Organizing around our businesses and JVs
• Adopting a new, more flexible, market-competitive approach
• Listening to better understand and meet client and their customers needs
Emphasizing operational excellence
• Increasing service integration and leveraging best practices
• Changing how Dow performs daily operational activities
• Allowing businesses and JVs to focus on strategy and customers
“Dow Business Services offers a leveraged
model that enables Dow businesses andJVs to run faster, safer, leaner and more
profitably than any competitor in the industry.”
“Dow Business Services offers a leveraged
model that enables Dow businesses and
JVs to run faster, safer, leaner and more
profitably than any competitor in the industry.”
� Dow Businesses align to 3 Operating Models
� Dow Corporate Center provides governance and oversight
� Dow Business Services provides service capabilities to all 3 operating models and JVs
JVs & Basics
PerformanceProducts
Market-Driven
Chemicals, Plastics & Feedstocks
Performance Products
Dow AgroSciences
Advanced Materials
Understanding the Pieces of the Puzzle…
Corporate Center
Dow Businesses & JVs
� Flexibility to bring
capability that meets the
growth demands of Dow’s businesses and JVs and their customer
� Continue to increase
productivity, while
maintaining scale and lowering cost to serve
� Maintaining required integration throughout
supply chain
� Bring competitive
advantage to Business Units
Client Interface / Service Management
BusinessProcessServices Center
Project and
Support Center
Business /Finance Office
Business Services
WorkProcess
Business Services Operating Unit Models
AssetOperations
Consulting &Expertise Services
Focus on the customer
Business Services Organization Model
Service Management
BusinessProcess
Services Center
Project and Support Center
Business /Finance Office
Business Services Work
Process
Business Services Operating Unit Models
AssetOperations
Consulting &Expertise Services
Corporate Center
JVs & Non-Affliated
Leveraged Business Units Independent Business Units
Basics Performance Market Driven
� Customer Service
� Supply Chain
� EH&S
� Purchasing
� IT
� Facilities Mgmt
� Six Sigma
� Process-focused elements of Finance and HR
Business Services Organization Model
Service Management
BusinessProcess
Services Center
Project and Support Center
Business /Finance Office
Business Services Work
Process
Business Services Operating Unit Models
AssetOperations
Consulting &Expertise Services
Corporate Center
JVs & Non-Affliated
Leveraged Business Units Independent Business Units
Basics Performance Market Driven
Client Interface and Service Management
• Creates a portfolio of services for Dow businesses and JVs and establishes contracts.
• Manages overall Dow business / JV engagement.
• Portfolio management of all services provided or channeled through Business Services.
• Manage service lifecycle
• Introduce new services and retire obsolete/low value services
• Improve existing services where they fall short
• Ensure services are capable and competitive
• Measured by service satisfaction, metrics and benchmarks
• Ensure that services are delivered in alignment with agreements
• Contracts and/or Service Level Agreements (depending on the client)
• Manage “cost-to-serve” of the services
Business Services Organization Model
Service Management
BusinessProcess
Services Center
Project and Support Center
Business /Finance Office
Business Services Work
Process
Business Services Operating Unit Models
AssetOperations
Consulting &Expertise Services
Corporate Center
JVs & Non-Affliated
Leveraged Business Units Independent Business Units
Basics Performance Market Driven
BusinessProcess
Services Center
Project and Support Center
Business /Finance Office
Business Services Work
Process
Business Services Operating Unit Models
AssetOperations
Consulting &Expertise Services
� Specializes in mature, well understood work, providing consistentwork process execution and lower costs to businesses and JVs.
� Services are provided to businesses, functions, and JVs
� Has processes in place to accomplish significant work that requires judgment and know-how, is expanding scope beyond the transactional.
� Partners with third-party suppliers to provide cost-effective, flexible resourcing with capabilities required to meet demand, at significantcost savings to the Company.
� Employs a global network of strategic locations (Midland and Mumbai) and satellite locations (Sao Paulo, Shanghai and Terneuzen) toprovide uninterrupted, high-quality service.
BusinessProcess
Services Center
Business Services Organization Model
Service Management
BusinessProcess
Services Center
Project and Support Center
Business /Finance Office
Business Services Work
Process
Business Services Operating Unit Models
AssetOperations
Consulting &Expertise Services
Corporate Center
JVs & Non-Affliated
Leveraged Business Units Independent Business Units
Basics Performance Market Driven
Project and Support Center
Business Services Work
Process
AssetOperations
Consulting &Expertise ServicesProject and
Support Center
Business /Finance Office
Business Services Work
Process
Etc – click for full list
AssetOperations
� These units are the operational arms of the functions
� Services require a physical link to assets.
−Examples include carrier logistics management, site security and emergency response, IT field services, building maintenance and property management.
� Accountable for delivering low cost and high quality service that meets Operational Level Agreements (OLAs)
Supply Chain Operations
IS Operations
EH&S Operations
Communication Services
Lab and Facilities Management
Emergency and Security Services
Business Services Organization Model
Service Management
BusinessProcess
Services Center
Project and Support Center
Business /Finance Office
Business Services Work
Process
Business Services Operating Unit Models
AssetOperations
Consulting &Expertise Services
Corporate Center
JVs & Non-Affliated
Leveraged Business Units Independent Business Units
Basics Performance Market Driven
Project and Support Center
Business /Finance Office
Business Services Work
Process
Consulting &Expertise ServicesProject and
Support Center
� Delivers against the prioritized needsof Dow businesses, JV customers, and the corporation in executing projects that create or improve work processes – typically with IT enablement.
� Provides cross functional capabilities at lower than market competitive pricing.
� Meets variable business demand.• Centers in Michigan
(Midland/Saginaw/Southfield), Philadelphia, Shanghai
Business Services Organization Model
Service Management
BusinessProcess
Services Center
Project and Support Center
Business /Finance Office
Business Services Work
Process
Business Services Operating Unit Models
AssetOperations
Consulting &Expertise Services
Corporate Center
JVs & Non-Affliated
Leveraged Business Units Independent Business Units
Basics Performance Market Driven
BusinessProcess
Services Center
Project and Support Center
Business Services Operating Unit Models
AssetOperations
Consulting &Expertise ServicesProject and
Support Center Consulting &Expertise Services
� Functional expertise that the customer or client will pay for
� Provides knowledge, expertise, advanced technology and solutions consultation to Dow’s corporate center, businesses, major integrated manufacturing sites and JVs.
� Advocates externally for sound public policy consistent with Dow’s business objectives.
Safety Expertise Center
Environmental Technology Center
Health Services and Epidemiology
Toxicology and Environmental Research
and Consulting
Product Stewardship
Supply Chain Consulting and Expertise Services
Purchasing Strategic Sourcing
Advertising
ES&SExpertise
IT Consulting
Remediation
Auditing & Compliance
Sustainability
IT Security
Services for the Corporation
Six Sigma Consultingand Expertise
JVs are a fourth business model we serve from Business Services
Value Proposition
� Mitigates risks (with proven processes and technologies)
� Accelerates operational stability and ability to sell products
� Drives competitive advantage through value delivery
� Accelerates workforce
and world-class operating performance
Provides for quicker start up ofnew businesses, which:
Deliver services for at least 20-30% lower cost than what a business unit can achieve by acquiring independent services or executing these services on its own.
� The new DOW requires a customer focused
service model with profitability emphasis
� Strong foundation of functional excellence
and cost control
� Business Service and its 4 operating units
are providing a market competitive, flexible
model for delivery of services and
capabilities for Dow Businesses and JVs
� New DOW businesses and JVs benefit from
proven Business Service capabilities
through quicker start up with lower risk
and cost
Summary