A new look at logistics at the Multi Purpose Catalysts plant
A new look at logistics at the Multi Purpose Catalysts plant
Bas de Graaf
Student University of Groningen
Agenda
Background
• AKZO Nobel Catalysts
• Markets of AKZO Nobel Catalysts
• From AKZO Nobel Catalysts to Albemarle Catalysts
• Multi Purpose Catalysts plant
• The MPC ‘wish list’
• Logistical Concept
• Root problem
• Possible solutions to the root problem
• Concluding remarks
• Questions & answers
Background
Background
Markets which AKZO Nobel Catalysts serve:
• Hydro Processing Catalysts (HPC)
• Fluidized Catalytic Cracking (FCC) catalysts
• Proprietary catalysts or carriers for fixed and fluid bed applications
Background
• August 2004, Albemarle Catalysts acquired AKZO Nobel Catalysts;
• Albemarle becomes one of the world's largest
producers of hydro processing catalysts (HPC) and fluidized catalytic cracking (FCC) catalysts used in the petroleum refining industry;
• The new Catalyst segment is expected to generate sales of roughly $680 million on an annual basis.
Background
Multi Purpose Catalysts plant
The MPC ‘wish list’
• EUMEA Supply Chain Manager:
Should the MPC plant join the EUMEA Supply Chain organisation?
• SBU manager of Business Development Group:
Can cost be further reduced so as to increase the Return on Investment of the plant?
• MPC Plant Manager:
More insight in the current functioning of the plant.
Prerequisite:
• The product portfolio does not change.
Preliminary interviews
No apparent problems came to light during interviews with:
• Marketing
• Operations
• Logistics
Internal and external plant performance is unknown.
Logistical Concept
Markets & current responsibilities of MPC plant
• Fluidized Catalytic Cracking Catalysts market
• Marketing: SBU FCC & Additives
• MPC cost centre
• EUMEA FCC marketing functions as internal sales department
• Market characteristic: mass-customisation
• Hydro Processing Catalysts market
• Marketing: SBU HPC
• MPC cost centre
• EUMEA HPC marketing functions as internal sales department
• Market characteristic: mass-customisation
• Business Development Group market
• Marketing: SBU Business Development Group
Functional production facility
Operational planning
responsibility
The root problem in the Logistical Concept is of organisational nature
• Three different SBU’s (three different objectives).
• Unclear manufacturing mission for and responsibility of the MPC plant
• Two planning departments
Reducing the complexity of the organisation
Option one: invest in additional resources!! Not likely to be a viable option: capital intensive industry
Are shared resources and demarcation lines in the organisation really necessary?
Integration of the planning
departments in the EUMEA Supply Chain organisation
Advantages:
• A more streamlined organisation;
• Communication and responsibility in one pair of hands;
• The Supply Chain manager is better placed to take
Integration at SBU level
Advantage:
• Plant and market
responsibility lies in one pair of hands.
Disadvantage:
• No apparent problems with the functioning of the different sales
Change the type of decentralisation
MPC plant becomes a service/cost centre:
• Marketing departments: profit centers;
• Budgeting: EUMEA Supply Chain organisation.
• Priorities and objectives: service levels agreements;
Advantages of this particular setting
• The plant gets a clear manufacturing mission;
• It allows the EUMEA Supply Chain organisation to make trade-offs;
• Shared burden of cost;
• More clearly defined responsibilities:
• SBU’s are responsible for forecasting and specifying objectives;
• MPC is responsible for manufacturing/operational control
Another possibility: Change the concept
The MPC organisation as toll manufacturer:
• MPC organisation: profit centre;
• Catalysts marketing departments: buy at “commercial”
prices;
MPC as toll manufacturer
Advantage:
• The MPC can target a wider market segment;
• Plant and market
responsibility lies in one pair of hands;
• Competition.
Disadvantage:
• MPC’s role as money maker for R&D activities
diminishes. In other words, the entire concept of
Business Development has to change with it;
• The R&D function is no longer shielded from outside competition;
• The MPC could be
encouraged to pursue its own objectives;
As matter stands today, not
