Timing is Everything, the View from an Elemica SCON(E)
I am coming up to an anniversary on the 1st of June, 2016. I will have been at Elemica for 10 years. Actually, on the same day, I will have been in the Chemical Industry for 24 years. As a nod to the decade that I have worked as a Supply Chain Operating Network (SCON) Evangelist (...does this make me a SCONE), I thought I would look back over my time and pick out a few examples where we have added that little bit more value. It is not going to be any of the large multi-year, 100’s-of-partners examples. These get presented at the Elemica conferences (and you can examples of those in the Resources section on our website). This is going to be about small “well bless my soul” moments.
One of the things I get asked from time to time is “What is Elemica uniquely good at?” or words to that effect. Rather than poking them in the eye for being annoying, I actually have a standard response, which is “we come from the Chemical Industry and we work with the largest Chemical Companies in the world, so we keep ourselves at the forefront of the needs of the Chemical Industry”. Ever since Elemica started in 2000 they have employed people from the Chemical Industry and in 2006 I was one of those people. We understand how chemical companies think so we can often help shape our projects to align with the process, the people and the chemical industry ethos.
The example that I am going to highlight in this BLOG is an example where my knowledge of the industry helped shape a project. I have used it as an example in conversations with clients ever since and it even helped shape a recent tolling project we did.
In 2011, a client came to Elemica saying they wanted to do a single connection to a logistics service provider (LSP). This LSP was in the rail truck sector and they provided a dilution service to our client. It was one of those requests where our client was on the SCON, the rail service company was on the SCON, so we could do a simple project. It was a standard business process, akin to any terminal or warehouse connection. Product was moved in to the LSP and there was request to move product out to customers. What happened in between was that for some customers a more dilute solution was required, so the warehouse added the correct amount of water.
As I was listening to this, I was thinking about some of the things that I did in my Air Products time. We sold mixtures for various industry sectors (for me it was N2:CO2 mixtures for the Food Industry). What I knew was important was that the SAP system needed to be in sync with all of the products in the process. The product that was being created and the product that was being reduced. This may seem simple, but the knock on affects are huge. If product volumes are not synchronised then the ERP is trying to promise product it doesn’t have, or the master data teams are adding to the lead time to allow for slow information. This means more stock, which is money wasted. Generally, inventory is communicated at the end of the day, the Elemica team knew this was not suitable.
So the client and our team sat down saying what could we do to help the situation. The answer that we got to was “timing” and “extra data”. We worked with all parties and the agreement was that the LSP would send the product created and the product consumed at the same time. This was sent in a slightly modified Ship Notice...that was all...no new message, no extra process steps, no huge implementation outlay...just a slightly modified message.
In 2016 that data flow is still going. The daily cost of the data transfer is probably less than $5.00, the value in a 180,000 lb railcar is huge. The ability to constantly know what product they have in that product line provides value in places I would hate to try and calculate, but we can all agree is probably in the $thousands.
If we didn’t have the Chemical Industry knowledge that we have then this may have ended up as a $5.00 a day cost. It would have saved $50.00 a day in error reduction and data entry work in SAP. However, with a little bit of extra thinking it has turned a 10x value into something which is going to be greater than 200x.
As always, it is not just data, it is smart data. Above and beyond that, it is timely smart data.