Section 10.4. ESA in the chemical industry: e-VMI at Solvay


10.4. ESA in the chemical industry: e-VMI at Solvay

The chemical giant Solvay has already begun using ESA principles and essential technologies to transform its essential business processes, especially those pertaining to its supply chain. Up to 60 percent of total costs in the chemical industry derive from materials and logistics, which is why manufacturers place such value on the effective handling of material shipments.

Scenarios for inventory management at business partner sites or VMI aren't new, but they still pose a challenge to suppliers such as Solvay, which try to reconcile long-term supply forecasting with real-time usage data arriving from the actual storage tanks. A truly effective VMI solution would mesh these complementary streams of data together and automate the resupply process. An accompanying portal could make the entire process transparent to Solvay, its customers, and the third-party handlers actually tasked with driving the delivery trucks to its customers' plants.

Solvay used SAP NetWeaver as the integration platform, and the SAP NetWeaver Exchange Infrastructure (SAP NetWeaver XI) framework, to do just that, creating a process it has dubbed "e-VMI." This process combines forecasting and real-time data, displays both in an external portal, and automates delivery by eliminating paperwork and assigning loads to specific drivers, who identify themselves and confirm receipt of shipments using biometric data. This is another opportunity for business process improvement, as automation along role-based lines yields faster and more reliable dispatch handling. Standard processes are simplified and employees can concentrate on exceptions.

In VMI, a chemical customer essentially outsources the management and replenishment of its raw materials to the manufacturer, which then faces a pair of supply chain challenges: when the customer begins to run low and needs replenishment, how long does the manufacturer need to resupply its customer with a product that's in stock? And if it's not in stock, how long will it need to manufacture more, and how much warning will it need to ensure the customer doesn't run out? The former depends on careful measurement of the customer's daily usage; the latter is a matter of accurately forecasting long-term consumption patterns (which may fluctuate seasonally, for example). Combining the two into a single, smoothly meshed process is not an option in traditional VMI solutions, which tend to focus on long-term forecasting.

In Solvay's e-VMI process, illustrated in Figure 10-4, forecasting data is retrieved from Elemica, an electronic marketplace used by the industry, and is passed via SAP NetWeaver XI messaging to its SAP Advanced Planner and Optimizer (APO) system. Simultaneously, telemetry data recorded by sensors in its customers' tanks is encoded into SAP NetWeaver XI messages and is passed to the APO, where the sources are reconciled to yield a strategy for daily replenishment and for longer-term manufacture.

Figure 10-4. e-VMI


There, the two are reconciled to aid the manufacturer in knowing when to replenish its customers with supplies in stock and when it's time to produce a new batch. The APO is then integrated with an external portal used by the customers to confirm the data, and to check the status of replenishment shipments. The drivers hailing those shipments also use the portal to check the status of their next assignments, information that is passed to the manufacturer's warehouse to prepare those shipments before the drivers arrive. Upon their arrival, each one receives a retina scan to confirm their identity, and to confirm that replenishment is now en routedata that is once again encoded as SAP NetWeaver XI messages and is passed back to both the portal and the manufacturer's APO system.




Enterprise SOA. Designing IT for Business Innovation
Enterprise SOA: Designing IT for Business Innovation
ISBN: 0596102380
EAN: 2147483647
Year: 2004
Pages: 265

flylib.com © 2008-2017.
If you may any questions please contact us: flylib@qtcs.net