MOVING THE GEARS FASTER - TOGETHER

Transcription

1 MOVING THE GEARS FASTER - TOGETHER CLOSE-OUT REPORT, REVISION 4 22 August 2014

2 EXECUTIVE SUMMARY Context The Polymers team in Singapore, together with SABIC Academy and the GSC COE, completed SABIC s first Applied Learning program, called Moving the Gears Faster Together in The team developed a process improvement design aimed at increasing the velocity of the end-to-end process, from customer engagement to product delivery from the Singapore hub: one of SABIC s container trans-shipment centers in Asia Pacific. Improvement Statement Increase the velocity of order processing and finished goods material flow, i.e. product delivery cycle time, from the point that material arrives in Singapore Hub until the ownership title is transferred from SABIC to the customer. Applied Learning Model The Applied Learning model provides coaching and training to teams to realize a significant business improvement opportunity. It required participants to apply their new skills immediately to solve business challenges, encouraging superior knowledge retention and accelerating the company s return on the training investment. Team members are now equipped with the competencies accredited by PennState University. Approach Internal stakeholders from across the value chain were coached and trained to determined; the current baseline by mapping the detailed processes, identified constraints within the current processes, identified innovation ideas to improve the current processes, and to develop and agree the future state and roadmap. Benefits Achieved Improved product delivery cycle time by 37% 1), which translates into additional sales revenue, working capital reduction of $74m and an annual supply chain saving of $10m. Net Promoter Score improved by 70% for availability & delivery More than 600 customers in Asia will benefit, with faster turnaround of our overall delivery and service. 1) 37% improvement in product delivery cycle time includes ABC analysis initiatives No. 1

3 INNOVATION ROADMAP TO OVERCOME OPERATIONAL CHALLENGES 42 Improvement ideas were generated by the team members across the total value chain to achieve the future state and to realize the improvement goals for shorter product delivery cycle time, working capital reduction, lower supply chain costs and increased sales revenue Physical receipt into hub to customer order Customer PO to Sales Order creation creation to release (clean order) release to availability date (MAD) Availability Date to Requested Loading date Requested Loading Date to Actual Cargo Loading Date Improvement ideas that span across the whole process Idea examples includes: Customer open LC from Class A Bank Express processing for VIP customer / sales contract customer. Review of LC by one party To get default confirming bank for all countries FD creation within same day for morning submission and next day for afternoon submission by 11am Legend Idea examples includes: Establish score card for total cycle time Inventory stock take - shorten to 1-2 days Shorten pre-allocation time (advance visibility to sales / draft allocation) Short Term < 90 days Short Term > 90 days Long Term LT idea examples includes: Automate picking, linking, booking request and confirmation into one platform Revisit MAS for new payment term approval To increase term contract customers (Convert Spot customer to Contract customer) To increase OA customers Changing LC to Open Account (covered by insurance) No. 2

4 12 MONTH ROLLING AVERAGE 1) REDUCTION IN PRODUCT DELIVERY CYCLE TIME 2) Physical Receipt of Goods into Hub (GR) Customer PO to Sales Order creation creation to release (clean order) SO release to availability date (MAD) Availability Date to Requested Loading date Actual Goods Departed Date (GI) Baseline Benchmark days Actual achievement days Variance (37%) 3) (Values are in Days unless otherwise stated) (+ve favorable, -ve unfavorable) Note: All Orders from Singapore Hub, excluding Direct Orders and Bonded Warehouse Orders 1) 12 month rolling average = Jul June 2012/2013 (Prior Four Quarters) and Jul June 2013/2014 (Last Four Quarters) 2) Product Delivery cycle time = Goods Receipt in Hub (GR) to Goods Issue to Customer (GI) 3) 37% improvement in product delivery cycle time includes ABC analysis initiatives No. 3

5 THESE ACHIEVEMENTS TRANSLATE INTO THE FOLLOWING BENEFITS Goods Receipt to Goods Issue gates the amount of time the product sits in the timeline. By improving Goods Receipt to Goods Issue by 37% the investment in working capital is significantly improved and the inventory carrying cost reduced. Over the same period the number of orders 1) processed has increased by 17%. The team are now able to handle more volumes with the same amount of headcount in equal or less process time, resulting in process efficiencies and reduced order handling cost. 1) Number of Orders = 8079 orders during Jul June 2012/2013 and 9434 orders during Jul June 2013/2014 No. 4

6 IMPACT ON THE DIAMOND Customer Net Promoter Score for availability and delivery improved by 70% Capital Capital release of $74M Cost Cost and efficiency improvement of $10M annually Growth Sales revenue growth of $42M annually No. 5

7 CONCLUSION Internal stakeholders from across the value chain worked together and generated innovative ideas to improve the efficiencies across the value chain. Team members are now equipped with new skills, via the Applied Learning Methodology and certification, to identify and solve business challenges across the value chain. The team implemented majority of the innovative ideas generated within a 12 month period, improving the 12 month rolling average lead time for Good Receipt (GR) to Goods Issue (GI) by 37% and the team are now able to handle 17% more orders. Continued focus and further implementation of the LT innovative ideas will realize more benefits across the value chain and further accelerate the process velocity. Impact on the diamond shows capital release of $74M, Cost and efficiency improvement of $10M annually, Sales revenue growth of $42M annually and a 70% improvement in Net Promoter Score for availability and delivery. No. 6