The importance of independent toll & contract manufacturing

Transcription

1 The importance of independent toll & contract manufacturing

2 Topics Introduction VLS-Group Definition: Tolling & Contract manufacturing Blending & chemical reaction Blending and Tolling Market Segments The need for independent toll manufacturing Important considerations for choosing a Toller Understanding & managing your supply chain strategy is key Challenges and Trends

3 Introduction VLS-Group European Leader in Chemical Logistics Independent toll & contract manufacturing Blending & chemical reaction Packaging small units (1l to 5l) Drumming & filling (20/60/200/1000 liter drums & IBC) Bagging Dry Bulk Tank storage Chemical warehousing Supply chain management Transport & logistics VLS-Groupis a leading European provider of innovative, integrated logistics and value-adding services for the chemical industry. VLS-Groupoffers a state-of-the-art European network of >220,000 m 2 warehouses, >100,000 m 3 tank terminal capacity, 22 high performance filling lines, 9 chemical reactors as well as blending and tolling. VLS-Groupcreates value throughout the entire supply chain of its customers by offering a wide range of sophisticated international logistics and transport services and solutions.

4 Tollmanufacturing vscontract manufacturing Definition = an arrangement where an independent Toller with specialised equipment processes raw materials, provided by Customer, into intermediate or finished products at an all-in tolling fee. No product ownership = the same arrangement as tolling but in this case the toller takes care of the sourcing of the raw materials. Temporary product ownership till moment of shipment

5 Blending and Chemical reaction Definition

6 Market Segments Petrochemical products : lubes additives - greases -coolants Specialty chemical products (Agro) Fine chemicals -(Nanotechnology) Medical products (Pharma grades) Food (Foodgrade products)

7 The need for independent Toll manufacturing (1) Availability Most big producers do not produce for others Location of the producer is not always ideal for the finished products Cost No fixed payroll cost, and not same payroll classification Low capital expense, infrastructure costs shared with others Cash flow management

8 The need for independent Toll manufacturing (2) Flexibility An independent tollercan produce a single batch,a trial run or continuous production Less complexity for the producer (take complexity out of the system) Gain precious time for meeting market needs This flexibility is especially important for : products for which it is difficult of forecast demand seasonal products trial batches in the pre-stage of launching a new product to the market products that have a high complexity & costs.

9 10 Important considerations for choosing a Toller 1. Track record of working under NDA/SA and IP protection 2. General impression, confidence, reputation 3. Equipment (type, maintenance, housekeeping) and capacity 4. Pilot blending capabilities, Lab facilities 5. Integrated supply chain concept : raw materials storage, production, packaging, finished goods storage, transportation, waste management 6. Track Record SSHEQ / REACH 7. No ownership of products and no own production / PL 8. Experience / References in your product range 9. Financial stability, capability to further invest 10. Location Location Location

10 Challenges: changing technologies f.ex Base Oils switchfromgri toii/iii Customer introductionor modification of product New formulation Processing Supply chain Testing Label change Tankstorage Disposals InternalImpact Ssheq approval Adaptation of product formulation in system Trial batch, waitingon approval, delay in process continuation New supplier/ new flow / leadtimes/production planning Inform lab/ surveyor on site Preparenew label forapproval, adaptlabel system AdditionaltankstorageneededforBase Oil new group and/or finished product What to do with previous raw materials finished products

11 Understanding your supply chain strategy is key to identify opportunities for improvement and... Business Strategy Feedback Drives Supply Chain Strategy Feedback Manage processes towards strategic network goals through: Inventory Optimization Packaging Design & Optimization Supply Chain Risk Assessment Drives Supply Chain Network Segment client business into Supply Chains and determine SC performance by: Strategic Supply Chain Workshopbased on The M4SC framework and SCOR methodology, to ensure strategic alignment Feedback Drives Optimize network based on strategic preformance requirements through: Network Design & Optimization Transportation Design & Optimization Supply Chain Process Drives Continious align resources to meet process goals Feedback Supply Chain Resources 11

12 Can you identify a red flag in your supply chains?

13 Challenges and Trends (1) Industry Challenges High investments up front High number of preliminary requests High complexity Increasing demand for late customization solutions Higher administration efforts to manage the same throughput of products Changing technologies (e.g. Bio diesel) Changing regulations (Reach / SSHEQ) Long lead times for permit changes Hard to secure long term commitments from customers

14 Challenges and Trends (2) Trends Outsourcing is growing and expected to grow even further Integrated concepts : full logistics and supply chain package

15 Contact us For inquiries about our independent toll and/or contract manufacturing services please get in touch with : Martine.union@vls-group.com