MIDLAND, Mich., Nov. 9, 2010 /PRNewswire-AsiaNet/ —
While many companies are effective at developing supply chain strategy to boost efficiencies in their processes, many fail in the execution of that strategy, according to Michael R. Levely, global process and operations manager for the XIAMETER(R) brand from Dow Corning.
“Without proper execution, the efficiencies and cost savings that companies are striving for will never be realized,” said Levely. “Formally instituting standard processes – and enforcing these processes as part of your day-to-day operations – is critical to achieving efficiency benefits.”
These costs savings in the supply chain are especially important for multinational companies that have to deal with rising freight costs, excessive inventories and warehouse inefficiencies, Levely said. Customizing orders and addressing special shipping requests add significant costs to the order and delivery process. If companies can find a way to standardize these services, the savings will directly impact the bottom line.
As an example, the XIAMETER(R) web-enabled business model has created significant efficiencies through supply chain innovations since it was launched by Dow Corning in 2002.
“A major contributor to the XIAMETER business model’s cost efficiency has been automation,” Levely said. “Our SAP(R)-based global IT platform has provided the backbone for this efficiency.”
When a customer places an order online, the SAP system identifies the first available shipping dates. When the order is confirmed, the material is scheduled to be produced and shipped “just-in-time,” without human involvement. Customers receive automated order confirmations, shipping notices and electronic invoices. This automation allows for a reduction in manpower and inventory, ultimately adding to the bottom line.
“An additional element resulting in cost efficiencies has been our business rules,” Levely said. “In order to standardize, you have to set and abide by business rules that apply to a broad set of customers. Companies can provide options, but those options must be limited.”
For instance, the XIAMETER brand requires minimum-order quantities. Customers must purchase full pallets or full batches of material, which reduces the number of shipments to customers overall. It also enables fuller truckload shipments and controls inventory. Customers can still buy in large volumes. The brand provides transparent volume and price tiers, giving customers options based on how they want to purchase.
Mandatory lead time requirements for all products allow for just-in-time manufacturing and shipping, and reduce late shipments. While credit terms have been standardized (30 days), customers have different options to choose from (15, 45, 60 days at a premium).
SAP’s global IT platform tracks shipments and business rule compliance, ensuring that orders are standardized and not able to be customized.
Elements such as minimum order requirements, lead times and pricing must be tailored to the potential and maturity of the market. However, expectations must be set with employees and customers that the business rules will be enforced. This strengthens a company’s ability to maintain efficiencies in its supply chain.
Based on its success and ongoing research of customer needs, Dow Corning last year expanded the XIAMETER business model to include more than 2,500 products. The launch included a new order entry platform with enhanced self-service functionality, and introduced volume quantity, pricing and credit term options, as well as the choice to buy directly from http://www.xiameter.com or through local distributors.
To hear more from Levely, watch the video
(http://www.youtube.com/watch?v=j0YVfsIMwT8) on the XIAMETER(R) channel (http://www.youtube.com/user/XIAMETER) on YouTube or follow the XIAMETER brand on Twitter (http://twitter.com/xiameter) for all the latest news.
The XIAMETER(R) brand of Dow Corning Corporation offers market-based prices for standard silicone products. Introduced in 2002, the brand offers 2,500 products including silicone fluids, sealants, silanes, emulsions and rubber. The XIAMETER brand is a no-frills model offering cost effective products through streamlined services and a web-enabled order platform. Learn more at http://www.xiameter.com.
About Dow Corning
Dow Corning (www.dowcorning.com) provides performance-enhancing solutions to serve the diverse needs of more than 25,000 customers worldwide. A global leader in silicones, silicon-based technology and innovation, Dow Corning offers more than 7,000 products and services via the company’s Dow Corning(R) and XIAMETER(R) brands. Dow Corning is a joint venture equally owned by The Dow Chemical Company and Corning, Incorporated. More than half of Dow Corning’s annual sales are outside the United States.
CONTACT: Cathy Yang,