improvements/benefits delivery performance inventory reduction

Improvements/Benefits

Delivery Performance

Inventory Reduction

Fulfillment Cycle Time

Forecast Accuracy

Overall Productivity

Lower Supply-Chain Costs

Fill Rates

Improved Capacity Realization

16% – 28% Improvement








Typical Quantified Benefits

•AMR Supply Chain Operations Reference Model: http://www.supply-chain.org

•Patiglio Rabin Todd & McGrath: http://www.prtm.com

A.E. Staley AGIP A. K. Steel ALCOA

Aginomoto Gen. Foods Amoco Anheuser-Busch Packaging Asahi Chemical

Asahi Glass Asahi Medical Ashland Petroleum BASF

Ben & Jerry’s BOC Gases BP Oil Bridgestone/Firestone

Bryan Foods (Sara Lee) Bush Boake Allen Cable Systems International Calgon Carbon

Champion International Chichibu Onoda Cement CLH Pipeline ComCom

Cosmo Oil Cypress Semiconductor Denki Kagaku Chem. De Ster

Daelim Industrial Corp. DuPont Engelhard Excel Beef (Cargill)

Exxon Chemicals Exxon Company Int’l. Exxon Research FEMSA

Fort James Corp. Fuji Heavy Industries Fuji Film GARMCO

Genref Goodyear Chemicals Grand Polymer Co. Gulf States Steel

Hoechst A. G. Hoechst Celanese Corp. Hoechst Hostalen Hokai Can

Honam Oil Hormel MEMC Japan (Confidential - Semi Mfg.)

(Confidential - Disk Drives) Idemitsu Iggesund International Home Foods

Irving Oil ISP IVECO (Fiat) Japan Elastomer

Josiah Wedgwood & Co. J. R. Simplot Knoll Pharmaceuticals Konica

Kraft General Foods Kyushu Oil LSI Logic LTV Steel

Macronix Marathon Oil Mead Fine Paper Meiji Foods

MEMC Methanex Miller Brewing Co. Mitsubishi Oil

Mitsubishi Silicon America Mitsui Chemicals Molson Brewing Monsanto

Motorola National Starch/Chem. Nihon Nippon Synthetic Chem.

Supply Chain Clients

P & G (Japan) Quaker Oats

Repsol

Quimica Rhone

PoulencRockwell Semiconductor Rohm & Haas SARAS

Schering-Plough Seiko Epson Corp. Sematech

Shaw IndustriesShell Chemical Shell Lubricants

Shell Oil

Shering-PloughShowa Shell Solutia

StatOil

Stoldt Parcel TankerSumitomo Chemicals Sun Refining & Mktg.

Symbios Logic

Taiyo OilTaisil Texaco

Thappline

Tohoku OilTonen Tonen Chemical

Toyo

Comms. Equip. TreviraUbe Cement Union Camp Unocal U. S. RoboticsValero Refining Wellcome Foundation Weyerhaeuser Witco

Yoshitomi Pharm Yukong

NOVA Chemicals Ocensa Petro-Canada

Pétromont Petronas

Pharmacia & Upjohn

Philip Morris

Phillips Chemical Phillips Petroleum

Plasmon Heinz

Praxair

Clients, continued

Allied Allied SignalSignal

“Aspen says you can expect a 50% variability reduction and a 2-5% capacity increase . . .

Our experience: > 50% variability reduction and a 3 - 10% capacity increase - with minimal capital investment”

Jeff Yellets, Alliance Manager, AlliedSignal

CORPORATE NETWORK OPTIMIZATION

17 operating divisions with multiple, heterogeneous systems

• 25,000 SKUs• 134 Shipping points• 15,000 ship-to

locations• 956 million pounds

shipped direct to customers

• 696 million pounds shipped to customers through DCs

Supply chain optimization model

for packaged finished goods in

North America

PROBLEMPROBLEM SOLUTIONSOLUTION BENEFITSBENEFITS

• Reduced transportation facility costs by 10%

• Next-day volume delivery increased from 77% to 96%

• Reduced number of DCs from 86 to 15

• Generated $10 million/year savings in operating costs

http://www.basf-ag.basf.de/en/

3-D TRIM OPTIMIZATION

Schedule fiberglass insulation

• Thickness as well as width and length required optimization on a continuous process

• No loss due to standard sizing of the finished goods

• Need to optimize production of orders and inventory

MIMI standard templates, using

LP/MIP and Expert Systems


• MIMI standard trim template handles problem naturally

• LP/MIP optimizes patterns regardless of # of dimensions

• Expert System finds patterns that can provide a better solution

• Since process is continuous, mathematically global optimal is possible

TRUCK LOADING & SCHEDULING

• Determine truck loading schedule in two-hour window for entire week

• Warehouse space for one day of inventory

• 5,000 trucks/week

Developed application using

MIMI’s LP module and

Expert System Shell


• Increased palletizer to truck from 20% to 40%

• Reduced warehouse inventory – volume and number of grades

• Reduced warehouse overtime

PRIMAL MANUFACTURING

Scheduling of fermentation

process

• Convert experience into Configured Application Product (CAP)

• Use CAP as basis for this application


• Initial schedules in 6 days

• Project focus on data issues – about two months

• Domain experise delivered in CAP

SUPPLY CHAIN BPR WITH MIMI

10 business units

• Billions of pounds/year

• Continuous, semi-continuous, block and batch operations

• Tank car, tank truck, trailers, ships and barges

• High margin specialties and low margin commodities

• One Supply Chain solution – MIMI

• Each business unit redesigned their processes


• Improved customer service

• Target 2% reduction in supply chain costs: exceeded

• Target 20% reduction in operating inventory: exceeded

http://www.exxonmobil.com/index.html

COLLABORATIVE SUPPLY CHAIN

PROCESSES

Supply Chain Management Across

Two Enterprises. Integrate Systems and Processes to Improve Customer Service and

Manufacturing Responsiveness

• Collaborative Business Processes and Integrated Business Systems. Order Management and ATP Processes (Dow)

• Linked to Scheduling Process (Solutia)


• Improved Customer Service Responsiveness by Enabling Collaborative ATP Process

• Reduced Manufacturing Upsets

STRATEGIC BUSINESS PLANNING

• Commodity chemicals (polymers)

• Evaluating alternative business models and market strategies

Long-term financial and capacity

planning considering supply chain constraints and alternatives


• Quickly identifies the highest margin, feasible market strategy

• Builds consensus among competing stakeholders

INTEGRATED SUPPLY CHAIN

Two production facilities, four business lines and six compounding facilities worldwide

Forecasting, inventory management, planning and scheduling


• Reduced sludge inventory by 50%

• Sharp reduction in forecast error (5-9% overall)

• Enhanced business value of SAP R/3 implementation

• Optimized grade switches

• Decreased response time to upsets

• 1000% ROI on project

OVERALL SUPPLY CHAIN PLANNING & OPTIMIZATION

• Collaborative scheduling of CH enterprise

• 12 plants with 170 operating units

• Optimizing manufacturing chains of 20,000 operations across 18-month horizon

• Large-scale distributed MIMI

• New collaborative scheduling work process implementation

• Proprietary genetic algorithm for optimization


• Overall increased capacity targeted at over 3%

• Response to customer requests to be reduced to seconds instead of minutes or hours

MANUFACTURING PLANNING & SCHEDULING

Multi-plant, high volume consumer

goods manufacturing

• Integrated planning and scheduling

• Audit demonstrates value of flexible supply chain modeling and advanced optimization techniques


• Increased return on net working capital

• Increased customer service levels

Shell Shell ChemicalChemical

• Company Background– Norco, LA & Deer

Park, TX– Olefins & Derivatives

• Why AspenTech– “Advisor”

– Model based approach

– Inherent Expert System

– NT Platform• Business Problem

– Production Accounting business process broken

– Mainframe program

– Very expensive to maintain and operate

– Daily Production Accounting still justified

• Proven Benefits

• Confidential but “a dot mover”

• (reduced costs by an order of magnitude)

CONDEA Vista CONDEA Vista

• Company Background– Olefins Plant

– Lake Charles, LA

• Why AspenTech– World leader in APC

• DMCPlus

– Willing to provide performance guarantee• Business Problem

– “Sold Out” on ethylene

– Need to increase production

– Need to minimize risk

• Proven Benefits

• Exceeded guarantee of +2.5% production

• Exact results confidential

Borealis Success StoryBorealis Success Story

• Company Background– Integrated Petrochemical /

Polymer company based in Copenhagen, Denmark

– World scale ethylene plant located in Stenungsund, Sweden

• Business Problem– Recent expansion required

modifications to existing technology to maintain competitive advantage

– New operating flexibility with posed more complicated optimization problem

• Why AspenTech?– Unique experience in

advanced control and real-time optimization of olefins plants

– Proven technology and track record

• Proven Benefits– Increased average ethylene

production by over 5%– On-line system provides

validated model as a basis for off-line case studies

Huntsman (formerly ICI) Success Story Huntsman (formerly ICI) Success Story

• Company Background– Huntsman is the largest privately

owned chemical company in the world (formerly ICI/BP Amoco JV)

– Wilton, UK Site contains the largest Naphtha Cracker (900,000 ton/year Ethylene) in Europe

• Business Problem– Integrated manufacturing

improvement required as part of a plant instrumentation upgrade

– Replacement of legacy, hard to maintain technology required to be competitive

• Why Aspentech– Had the complete solution for

information management, advanced process control, and real-time optimization

– Proven technology and experienced application specialists

• Proven Benefits– Dependable, reliable and uniform

information– Actual performance is

confidential, but set new daily and monthly production record

– High stream factors indicating strong operations support

ROHM & HAAS ROHM & HAAS

• Company Background– Diversified chemical

company

• Why AspenTech– World leader in Process

Industries Supply Chain Management

• Business Problem

– Reduce supply chain costs while improving performance

• Proven Benefits

– On-time delivery performance risen more than 10% at many facilities.

– Inventory costs dropped $40 million.

– Better inventory visibility enabling streamlined operations.

– Some business units have cut warehouse usage from 12 facilities to 2.

– Planning cycle time reduced

AspenTech – Rohm & Haas Supply Chain ManagementAspenTech – Rohm & Haas Supply Chain Management

“Now that we are more effective planners, many crises have gone away.”

Joe Gilbert, Materials Manager

On-time delivery performance risen more than 10% at many facilities

Inventory costs dropped $40 million. Better inventory visibiliy enabling streamlined operations. Some business units have cut warehouse usage from 12 facilities to 2

Planning cycle time reduced

On-time delivery performance risen more than 10% at many facilities

Inventory costs dropped $40 million. Better inventory visibiliy enabling streamlined operations. Some business units have cut warehouse usage from 12 facilities to 2

Planning cycle time reduced

Economic Potential

Areas of Economic Potential Factor ImprovementsIncreased Sales

Increased Demand (Improved order fulfillment and customer service)

Increases Average Sales Price (Yield of Most valuable product, optimum product mix, improved consistency)

Increase Production Volumes (Utilization, On-stream factor)

1.0% - 3.0%

0.4% - 1.3%

2.0% - 5.0%

Reduced CostsReduced Variable Costs Raw materials consumption Additives, energy, catalysts, etc. Distribution and logisticsReduced Fixed Costs Inventory Carrying Costs General & Administration Production Staff

1.0% - 3.0%1.0% - 3.0%5.0% - 10.0% 5.0% - 30.0%0.0% - 5.0%1.0% - 5.0%

Increased Capital Utilization

Reduced Capital Expenditures

5.0% - 20.0%

Chevron Chevron PhilliPhillipsps

• Reduced dead inventory by 98%• Forecast accuracy improvement

of 25% (5-9% overall)• Enhanced business value of

SAP R/3 implementation• Optimized grade switches• Decreased response time to

upsets• 300% ROI on project

• Business Challenge:• Business Challenge:

• Solutions Applied:• Solutions Applied:

• Value Chain Planning • Production Optimization• Demand-side Optimization•

• Proven Benefits:• Proven Benefits:

Polyolefin Complex, Texas, USA

• Forecasting, inventory management, planning and scheduling

Union CarbideUnion Carbide

• Leverage ERP investment• Increased revenue• Improved Customer loyalty

• Derive SAP investment• Provide differentiating service

value to Unipol licensee



• Asset Optimzation• Value Chain Planning • Production Optimization


Polymers Producer and Licensor

“By standardizing on AspenTech’s software across our entire enterprise, we expect to derive exceptional value from our SAP investment by coordinating our business and manufacturing processes,”

William Joyce, Chairman and CEO of Union Carbide

NOVA ChemicNOVA Chemicalsals

• Reduce capital Investment by 35% or about 25 million USD

• Reduce capital cost to compete with established technologies



• Asset Optimization• Used Polymers Plus to

study process alternatives to identify optimal reactor configurations & minimize solvent recovery costs


Polymers Producer and Licensor

EquistarEquistar

• 5 times ROI• $20 million benefits in two years

• Business Challenge:• Business Challenge: • Solutions Applied:• Solutions Applied:

• Production Optimization• Value Chain Planning


HDPE plant, Matagorda , Texas

• Integrate long chain business processes that encompass SAP, MES, and DCS

• Develop a standardized configuration that enables replication of best business practices

• Determine value of MES integration

improvements/benefits delivery performance inventory reduction

Documents

transportation costs

bridgestonefirestone

day of inventory

production scheduling

supply chain clients

goodyear chemicals environment

supply chain optimisation

truck loading schedule