tiative was being able to leverage the
capability that Elemica brought to procurement management of raw materials
and packaging. “Being able to use that
functionality and extend it to things outside of that direct spend, that was a key
element that I think some folks questioned before going into this.”
The direct side is more complex for at
least two reasons, Bushnell says. First, you
have a lot more suppliers to deal with.
Second, there are more releases per purchase order.
Heavy manufacturing industries are very
similar in that regard. He feels that Elemica
is highly capable at handling the more
robust business processes that are required,
so it was able to leverage that expertise into
the indirect spend categories.
“That was probably the biggest benefit
of the previous relationship,” says Bushnell.
Implementation on the indirect side
went efficiently, says Farley. He credits
both sides with having highly talented
teams that enabled a smooth transfer that
only encountered one hiccup.
The hurdle occurred when it was
learned that some of the messages used a
different XML version from that used by
Elemica. “We thought it was going to be a
straightforward exercise,” Farley says, “but
what we found was that it caused some
issues in terms of the mapping.”
Elemica solved the problem by translating
the messages. “We navigated that gracefully
and were able to map over [the different ver-sion] and in some cases were able to make
that transparent to our suppliers.”
When Dow managers did the numbers
following the implementation, they were
quite impressed. Errors dropped by 75
percent, Farley says. “We tracked activity
through the Elemica hub, and that
increased as much as 500 percent in less
than a 12-month period. That’s significant
because part of this effort was driven by
Dow’s strategy to lower our overall unit
messaging costs across the enterprise. So,
taking procurement messaging volume,
sales side volume and supply chain volume and achieving an economy of
scale—I can tell you as a result of the con-
solidation of this activity, we have been
able to lower our unit messaging costs,
and that was the objective.”
Dow’s problem was hardly unique,
Bushnell says. “Their biggest challenge was
that they had multiple business processes
they were trying to manage, so the cost of
ownership was high for them. I see this a lot
in the chemical industry, trying to unify the
business processes, and Elemica was able
to do that for them. We brought it together
on the indirect, which we had been doing
with direct materials before.”
The results as Bushnell sees them are
multiple. First, Dow has reduced the cost of
getting contracted items from suppliers.
Second, efficiency has increased in procurement, operations, IT and over into
accounts payable. “This is good synergy
that you get in the process, and you reduce
the amount of manpower that you need to
do this basic business in your value chain.”
Elemica, www.elemica.com
Resource Link
SPOTLIGHT ON BAXTER PLANNING SYSTEMS
“They use the correct balance of technology and personnel to
identify creative solutions and to propose options.”
“The Baxter team is always looking for opportunities to improve
the tool by making adjustments and upgrades as needed.”
“They are focused on our operational plan, and work to
increase its efficiency.”
“Its planning tool supports our supply chain and ensures we
maintain the highest level of material support, customer satisfaction,
and capitalize on all cost-saving opportunities.”
“They have enabled us to plan our service spares inventory
accurately, while maintaining high levels of customer satisfaction,
thus also increasing profitability.”
