Transcript Slide 1

Jointly Creating Supply Chain Competitive Advantage
Long Boat Key
October 14, 2009
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Jointly Creating Supply Chain Competitive Advantage
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About Dow Corning
 A joint venture of The Dow
Chemical Company and
Corning Incorporated
 Organized to explore the
potential of the silicon
atom in 1943
 Vision:
We are innovative leaders
unleashing the power of
silicon to benefit everyone,
everywhere.
Dr. Franklin J. Hyde 2
Jointly Creating Supply Chain Competitive Advantage
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Silicones come in many forms with many features
Quartz
Carbon
Silicon
Metal
 Fluids
 Emulsions
 Adhesives
 Resins
Methylchloro
Silanes
Methyl
Siloxanes
These are sold and used directly or
converted by our customers into
their finished products.
Silicones are used in millions of
products around the world.
 Elastomers
 Sealants
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Dow Corning innovating around the world
 More than 7,000 products and related
services
 Approximately 25,000 customers
 Over $5 billion in sales in 2008, globally
dispersed with more than 60% outside the
US
 Approx. 10,000 employees worldwide
 A global leader in silicones and high purity
silicon
 Strong channels to market – distributors,
web, commercial organization
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Jointly Creating Supply Chain Competitive Advantage
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Dow Corning serves customers’ diverse needs…
Automotive
Beauty &
Personal Care
Chemical
Manufacturing
Construction
Electronics
Food & Beverage
Healthcare
Household & Cleaning
Imaging
Paints and Inks
Power and Utility
Solar
Pressure Sensitive
Rubber Fabrication
Textile, Leather
& Nonwovens
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Dow Corning – One Company, Many Big Opportunities
Dow Corning Corporation
Focus is on Polysilicon for
Focus is on Products
Focus is on Markets
Semiconductor and Solar
Standard Silicone Products
Specialty Products & Services
Industries
Relentless pursuit of efficiency
Relentless pursuit of innovation
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Jointly Creating Supply Chain Competitive Advantage
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Dow Corning locations worldwide
Manufacturing Sites
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Jointly Creating Supply Chain Competitive Advantage
Financial performance
800
Net Income, $Million
Sales, $Billion
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5
4
3
2
1
0
2003
2004
2005
2006
Year
2007
2008
700
600
500
400
300
200
100
0
2003
2004
2005
2006
2007
2008
Year
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Jointly Creating Supply Chain Competitive Advantage
UTi Financial Highlights (FY09)
Revenues
5,000
CAGR = 19%
4,3664,544
3,548
4,000
• Revenues:
1,216
1,200
Income:
$154 million*
• Net Income –
$97 million
continuing ops: ($0.97/share)*
1,000
FY09
769
800
400
0
FY07
960
• Operating
2,000
FY05
1,489 1,546
CAGR = 19%
$4.5 billion
• Net Revenues: $1.5 billion
2,775
2,251
3,000
Net Revenues
1,600
UTi Worldwide (UTIW Listing on Nasdaq)
0
FY05FY06FY07FY08FY09
Comprehensive Global Network
•
•
•
20,415 employees
Owned Freight Forwarding locations in 288 cities in 62 countries
200 Logistics Centers in 26 countries (26.4 M ft.2)
Six Major Industry Verticals
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•
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Retail, Consumer Products
Fashion and Apparel
Pharmaceutical
Chemicals
Automotive and Assembly
Hi-Tech and Consumer Electronics
Service Lines
• Air freight and ocean freight forwarding
• Customs Brokerage
• Contract Logistics
• Truck Brokerage and Distribution
• Supply Chain Management Services
* Excludes impairment, restructuring and severance charges of $130.6 million /$109.5 miillion after taxes
April 2009
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Jointly Creating Supply Chain Competitive Advantage
Scope of our Partnership is Global and evolved step-by-step
Services
Ocean Freight Forwarding
Air Freight Forwarding
Customs Brokerage
Contract Logistics
1996
1997
Europe
Europe
1998
1999
Global
2000
2001
2002
2003
2004
2005
2006
2007
2009
RawRaw
Material
(Si
Material
Metal)
Global
Mexico Cross
Border
Canada
Distribution
Duty Drawback
(Lost in 2005)
Europe
Europe
LLP
LLP
Houdeng
Routing
Ctr
Multibase
France
Turkey
Platform
China
3rd Pillar
China
Plant & Equipment Moves
Recyclables Moves
2008
China &
India
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Paradigm Shifts for Dow Corning
Local
Buying
Global /
Local Buying
Multiple
Processes
Single
Process
Internal
Expertise
Multiple
Providers
Port-to-Port
Costs
Scattered
Reporting
“Out”
Source
Single Global
Provider
Door-to-Door
Costs
Global / Local
Reporting
Carrier Pricing
Models
Focus on
Enterprise
Business Unit
Optimization
Per Kg.
Charges
Extended
Enterprise
Global / BU
Optimization
Local Service
Optimization
Global / Local
Optimization
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Single Sourcing Drives Innovation
• Single source International
Transportation and
Brokerage.
• Statistical Process Control
to create a Predictability
Index
• Gain transparency to
transportation costs (open
book approach and Shared
Ocean Solution)
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Visibility Is Important
• First Chemical company
to link to UTi’s global
uTrac system that tracks
the status of all UTi
shipments.
• First company to break
5000+ queries per month
from uTrac.
• SAP tied to a single
source of transportation
data (uTrac) equals
increased data integrity.
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System Connectivity via EDI
•
IT Integration
EDI interfacing
•
E-invoicing
SAP
access
•
EDI interfacing for:
– Delivery information
– Goods issue
– ADD capturing
SAP Access
– UTi staff working on DC SAP
Electronic invoicing
– UTi supplies Dow Corning with a monthly einvoice (excel file) containing data-elements
as agreed with Dow Corning.
– The file permits Dow Corning to
automatically upload the cost information
into SAP linked to the cost centres in SAP.
– The e-invoice together with the Freight Rate
Database (FRD) facilitates the invoicing check
for Dow Corning
– Quality of the data-entry is continuously
monitored.
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Beyond Freight Forwarding
• Gain share warehouse
(Houdeng)
• Consistent cost savings /
avoidance or service
improvement every year
since the beginning of the
contract.
79.785
Delivery line
items
received
GMP
QS
9000
ISO
9001/2008
Responsible
Care
132.512 tons
dispatched
SEVESO
II
28.203
Deliveries
received
85.290
Deliveries
dispatched
Houdeng
Warehousing
&
Freight
Management
129.886 tons
received
200.043
Delivery line
items
dispatched
294.066
Picking
transactions
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Six Sigma Approach
Introduced UTi to a 6 sigma
approach to quality
• Jointly developed an
emergency response
plan as a 6 σ project.
• UTi actually provided
Green Belt training to
Dow Corning employees
during this project.
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Jointly Creating Supply Chain Competitive Advantage
Dow Corning Global Supply Chain
Raw materials &
Indirect material
UTi handles
Silicon metal
shipments
To the Barry
basic plants
Regional warehouses store and then fill
orders going to both DCC plants and
directly to customers. These warehouses
consolidate shipments whenever possible.
UTi handles the European Warehouse.
From this warehouse, regional customers
receive their deliveries via truck. DCC
locations and direct customers receive
their shipments via Air or Ocean.
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Basic plants in Carrollton, KY / Barry, Wales
UK / Zhangjiagang, CN. Basic plants produce
& ship intermediate building block chemicals
to finishing plants and regional warehouses.
There are also specialty plants that ship to
the end customers or regional warehouses.
Local finishing plants
complete the mfg
process and package
final product in to
consumer packs. Final
shipments are sent to
DCC clients.
Recyclables
To China &
India
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Accomplishments
Value to Dow Corning
Single sourcing of International Transportation
$4.9 million per annum
Houdeng savings and Implementation new
Houdeng organization
About € 5.000.000
Transit Time Report
Increase in TT predictability and inventory
reduction. Project management approach to
problem solving
Silicon Metal Project
$20 million in cost savings (2000)
15 Onsite Resources
Free resources to help UTi to support Dow
Corning
Coupling savings & ENCO containers freezing
Proposed fix to a local problem
Heavy Equipment Investment to DCC JINCHEON
Plant
$825,000 savings Maximizing operational
efficiency ; easy & useful container loading,
unloading for export-import
Rusted drums emergency situation
DC has saved business with key customers
Infocube / Volume Cost Report
Increased analysis & reporting
capabilities. Freight cost visibility
C-TPAT implementation Houdeng + Houdeng
audit by US customs
DC received Tier 3 status by Ctpat – Tier 3 is the
highest, only 300 out of 7000 companies in it
20’ vs. 40’ Container Usage Project
$3 million dollars in direct savings in 2005-2007 18
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Communication Structure for a Global Partnership
• UTi Account Management structure facilitates
teamwork
• UTi Global
• Joint UTi-Dow Corning Regional Management Teams
• Joint UTi-Dow Corning “local” review meetings
• Joint UTi-Dow Corning communication matrix in order
to guarantee effective communication on all levels
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Dow Corning Approach
1) Reach / Presence (how
global)
2) Knowledge
3) Team set up to serve your
company
4) IT capabilities
5) Risk mitigation
6) Costs and value
1) sponsorship and ownership
2) senior level involvement &
drive
3) management and
coordination
4) execution
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UTi Lessons Learned
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•
•
•
•
Think like the client
Set joint goals
Learn to speak the same “language.”
Cultural fit is important
Never Rest – pursuit of continuous
improvement
• Seek Feedback and Problems - Quick
Resolution Process
• Dedicated team – starting from the senior
level going to the desk level
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A Decade of Global Partnership
1998-2008
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