Chemical Technology March 2015

SUPPLY CHAIN

MANAGEMENT

Spreadsheets are widely recognised as inadequate for managing complex supply chains. They are typically customised to fit the constraints of each plant and are prone to errors and labour-intensive data gathering.

The interactive Planning Board in Aspen Plant Scheduler provides an easy way to visualise and make changes to the schedule as well as view inventory levels for multiple products simultaneously.

In every supply chain there are activities that must be initi- ated in anticipation of future demand. The specific activities vary with the business, but generally include finished goods production, semi-finished goods production or rawmaterials purchasing. To maximise performance, these activities must be planned with the best available information. Improve- ments in forecasting and demand planning can reduce the Through Aspen Supply Chain Planner, this specialty chemicals producer easily determines alternative supply paths across the network and dynamically selects optimal product source locations, based on physical constraints and emissions limitations. By optimising their supply chain to determine the lowest cost for each customer and by improving work processes, data management and reporting visibility, this specialty chemicals producer estimates that it will attain €20 million in annual benefits. S&OP Case Study – ¤15B specialty chemicals producer in Europe A €15 billion specialty chemicals producer based in Europe wanted to ensure execution of reliable and cost efficient delivery of their products in Central Europe. The company also needed to remove bottlenecks in the production and distribution processes and to simultaneously optimise: • Storage and transport capacities • Logistics (mode of transportation, route, vehicle utilisation, etc.) • Sourcing from shipping points Additionally, the company needed to meet regulatory compliance requirements to track CO 2 positions across ten European countries against annual emissions limits. This supply chain transformation was not an easy task considering the complexity of their supply chain network, which includes more than 30 sites, hundreds of resources, thousands of ship-to locations and a multitude of raw material suppliers. The company did not have a global reporting system, asset visibility or standard supply chain business processes across the organisation. In fact, each country operated completely independent of one another, tracking operations on desktop spreadsheets. To unify operations, the company turned to Aspen Supply Chain Planner, a software application that supports the S&OP process in the aspenONE Supply Chain Management suite to achieve the following: Optimise across 10 business units Facilitate decision-making based on economics Increase the transparency of their business processes Perform both short-term (weekly/monthly) and strategic long-term (1-5 years) planning.

Scheduling Case Study – NOVA Chemicals NOVA Chemicals, a plastics and chemicals producer with manufacturing sites strategically located throughout Canada and the United States, wanted to standardise their supply chain operations – processes and underlying technology – for their polyethylene business. Due to fragmented business processes, lack of automation and scheduling models that were customised for each plant site, NOVA Chemicals was forced to manage their supply chain in a largely manual fashion, making it difficult to react to any type of business change. The company lacked the ability to evaluate the impact or to determine the best course of action for events, such as price changes, shutdowns, raw material constraints or weather-related factors. Furthermore, the lack of uniformity between models broke down synergies between groups and made change management very difficult. By committing to a new, standard set of business processes for all parts of the polyethylene business, NOVA was able to migrate to six standard aspenONE Supply Chain Management applications with a single design throughout. The new business processes and technology were automated and integrated, enabling NOVA Chemicals to react quickly to changing business conditions, reduce overall IT ownership and model maintenance and improve data sharing and collaboration to increase their scheduling horizon by 100%. “Due to forward visibility, the scheduling horizon doubled, increasing from 90 days to 180 days. This gave the schedulers better raw material visibility and a better product wheel.” Zoran Stojecevski, Systems Analyst and Developer, NOVA Chemicals © 2014 Institution of Chemical Engineers (IChemE) and Aspen Technology. All rights reserved. 11-4433-0314

need to carry excess safety stock or have spare capacity sit idle. In a fully integrated supply chain, production opera- tions should be closely linked with demand management, so a company’s operational plan can adapt as quickly as demand changes. Generating an accurate demand forecast is a critical first step in the S&OP process, as it is the demand signal that

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Chemical Technology • March 2015