Mr. Salah Al Kharraz - supply chain a business or a service

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THE KUWAIT SUPPLY CHAIN &

LOGISTICS CONFERENCE & EXHIBITION

14 – 15 DECEMBER 2011

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IS SUPPLY CHAIN A BUSINESS OR A SERVICE!

PRESENTED BY:

SALAH AL-KHARRAZ

INTEGRATED SUPPLY CHAIN LEADER

EQUATE PETROCHEMICAL COMPANY

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IS SUPPLY CHAIN A BUSINESS OR A SERVICE?

A Business definition is:

• A business is an organization engaged in the trade of goods, services, or both to consumers.

A Service definition is:

• A type of economic activity that is intangible, is not stored and does not result in ownership. A service is consumed at the point of sale. Services are one of the two key components of economics, the other being goods.

Definition

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1. Creation Era

• The characteristics of this era of supply chain management include the need for large-scale changes, re-engineering, downsizing driven by cost reduction programs, and widespread attention to the Japanese practice of management.

2. Integration Era

• Is an era integrated under one plan and is Enterprise Resource Planning (ERP) enabled.

Evolution of SC

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3. Vertical Integration

• This era in which vertical integration with the suppliers in upstream direction and customers in downstream direction is achieved.

4. Globalization Era

• The globalization era, can be characterized by the attention given to global systems of supplier relationships and the expansion of supply chains over national boundaries and into other continents.

Evolution of SC… Cont’d

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5. Specialization Era

• Industries began to focus on “core competencies” and adopted a specialization model. Companies abandoned vertical integration, sold off non-core operations, and outsourced those functions to other companies. This changed management requirements by extending the supply chain well beyond company walls and distributing management across specialized supply chain partnerships.

Evolution of SC… Cont’d

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Procurement Manufacturing Physical Distribution

Communication

Electronic Data

Analysis

Order Management

CustomerSupplier

Customer Service

Product Development

ADVANCE

Supply Chain Functions

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Established in 1995, EQUATE is an international joint venture between Petrochemical Industries Company (PIC), The Dow Chemical Company (Dow), Boubyan Petrochemical Company (BPC) and Qurain Petrochemical Industries Company (QPIC).

Commencing production in 1997, EQUATE is the single operator of a fully integrated world-scale manufacturing facility producing over 5 million tons annually of high-quality petrochemical products which are marketed throughout the Middle East, Asia, Africa and Europe.

About EQUATE

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Solid Form:

Polyethylene Polypropylene

Liquid Form:

Mono-ethylene Glycol Di-ethylene Glycol Crude Glycol Styrene Monomer Paraxylene Heavy Aromatics

EQUATE ISC Handling Products

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A Supply Chain has three key parts:

• Supply focuses on the raw materials supplied to manufacturing, including how, when, and from what.

• Manufacturing focuses on converting these raw materials into finished products.

• Distribution focuses on ensuring these products reach the consumers through an organized network of distributors, warehouses, and retailers.

COMMUNICATION

The Key Parts of ISC

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EQUATE ISC to Manage

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YEARLY FACTS & FIGURES (in MT)

LIQUID PRODUCTS SHIPMENT

PRODUCT MEG DEG CG SM PX HAS YTD

QUANTITY 974,754 696,132 23,760 469,682 744,958 41,468 2,950,754

EQUATE 2011 Fact Sheet

SOLID PRODUCTS SHIPMENT

PRODUCT PE PP YTD

QUANTITY 632,400 12,2409 754,809

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Global Fortune 500 List

Rank Company Revenue in $

1 Wal-Mart stores 219,812

2 Exxon Mobile 191,581

3 General Motors 177,260

4 Ford Motors 162,412

According to an analyst: Wal-Mart was able to achieve a leadership position in retail industry DUE to the efficient supply chain management practices.

WAL-MART Supply Chain

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Commodity business cannot be differentiated in the selling price, it by the best class in service… JIT/OTIF with the right KPI’s, and best customer service.

Conclusion

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Integrated Supply Chain is a BUSINESS not a moving commodities service

Conclusion… (cont’d)

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Q & A


Questions & Answers

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THANK YOU!

IS SUPPLYCHAIN A BUSINESS OR A SERVICE?