BASF PPT

LogisticsoperationsinsouthandeastAsiaBASFChristineWuPhamMyHanhKatrinaKwongEddyLeeJimmyZhangIntroduction•BASFisoneoftheworld’slargestchemicalcompanies，establishedin1865.•6maincategoriesofproductswiththetotalnumberofover8,000.•ProgressinAsiaisacceleratingandaregionalheadquarterhadbeenestablishedinSingaporein1989.•However,thesouth&eastAsiaregionalcompanyisnotdoingwellduetoalackoflogisticsexpertiseandthecreationofstreamlinedlogisticsprocessesfails.OrganizationalStructureBASFAGOperatingdivisionsRegionaldivisionsFunctionaldivisions22majorproductgroupingsfallin6mainsectorsLogisticsInformationsystemFinanceetc.Individualgroupcompanieslocatedworld-wideProblemsataglance•Independentfromtheparentcompanyintermsofflowsofgoodswithintheregionalmarket.•Lackofsystematicinformationflowwithintheregion.•Responsibilitiesarenotclearlydefinedaswellasautonomylogisticsactivities.ProblemIdentification•Lackofqualifiedpersonnelinlogistics•Lackofappropriatelogisticsstrategy•Overlappedorganizationalstructure•WeakinformationsystemwithintheregionLackoflogisticpersonnel•Thecompanyhasalmostnologisticsspecialists•Littleformaltraininginlogistics(on-the-jobtrainingonlyformoststaff)•Eventrainingprogramisavailable,objectiveistomeetneedsofotherdepartmentratherthanlogistics.Inappropriatelogisticsstrategy•Nosufficientconcerntologistics•Nocentralizedstrategyresultinginlogisticssophisticationandmeasurementofcostandinventorylevelvary.•Nodecisionsupporttoolssuchasinventoryplanning,distributionplanningetc.OverlappingOrganizationalStructure•Overlappingmanagementwithintheregionalcompanyandparentcompany•Overlappingoperationbetweenlogisticsandotherdepartment:somefunctionsofthelogisticsisdetachedfromtheoperationofthelogisticsdepartmentWeakInformationSystem•separatedinformationsystemineachgroupcompany•noinformationflowswithintheregionalcompanyandtheparentcompany:resultsinnoshareofknowledgewithintheparentcompany•inflexibleinformationsystem:thedataisonlycollectedintheformoffinancialreportRecommendations1.Changesintermsoflogisticspersonnel•Employlogisticsspecialists•Trainingprogramshouldberectifiedbyhelpingstafftogainrightunderstandingoflogisticsissues.Recommendations2.Implementationofsinglelogisticstrategy•Centralizedlogisticsmanagementatparentcompanylevel•Centralizedlogisticsactivitiesatregionalcompanylevel•DecentralizedstrategyplanningbasedongeneralstrategyofparentandregionalcompanyatgroupcompanylevelRecommendations3.Restructuringorganizationalstructure•Withingroupcompany,functionofeachdepartmentshouldbedefinedwithclearandcomprehensiveidentification.Thelogisticsactivities,includingwarehousing,transportation,inventorymanagement,procurement,shouldbeintegratedinthelogisticsdepartmentonly.Recommendations4.Establishingacoordinatedinformationsystem•Onlyoneinformationsystemshouldbeusedwithinthewholecompany.•Mayupgradeandintegrateexistinginformationsystem•ConsiderationofestablishingaspecializedcenterofinformationsystemCostandBenefitoftheRecom…Cost•Expenditureinrecruitinglogisticsexpertise•EstablishmentofITcenterincreaseproductioncost•Potentiallyinstabilityofoperationduetotherestructuring•ContinuousproductionmaybeaffectedbycentralizedlogisticsstrategyCostandBenefitoftheRecom…Benefitoutweighthecost•Logisticsexpertisewillensuredecisionsaremadeonthebasisofprofessionalknowledgeratherthanexperience.Thus,implementationofcentralizedstrategybecomemorefeasibleandoperationoflogisticswillbemoreeffectiveCostandBenefitoftheRecom…Benefitoutweighthecost•Trainingprogramwillenhancethedevelopmentoflogisticsandtheoperationofgroupcompany•Meanwhile,furtherunderstandingofbenefitsoflogisticswillmakerestructuringmucheasierandaccordingly,reducetheresistancetochangewithinCostandBenefitoftheRecom…Benefitoutweighthecost•Singlelogisticsstrategywithintheregionwillbetterthefunction.Withadequatedecisionsupporttools,totalcostwillbeoptimizedwithhigherlevelofcustomerservicesCostandBenefitoftheRecom…Benefitoutweighthecost•Reducingoverlappingactivitiesandintegratinglogisticsfunctioncanhelpoperatemoreefficiently,resultinginreductionoftotalcostandincreasecompetitivenessCostandBenefitoftheRecom…Benefitoutweighthecost•SmoothinformationsystemmakesthesharingofinformationandknowledgeamonggroupcompanieseasierandincreasecompetitiveadvantageofthecompanyintheregionReferences