Supply Chain Helps 119-Year-Old Dow Chemical Move Like a Startup
With more than a century of experience in manufacturing, the last thing one might expect to hear from DOW Chemical is that the company thinks of itself as startup.
“If you would have asked us five years ago what is DOW Chemical, we would have said we’re striving to be the best chemical company in the world,” Jeffrey Tazelaar, global supply chain visibility leader at DOW Chemical, said in his keynote at the Bridges 2016 supply chain conference in New York. “That vision has since changed. If we have heard anything over the last day and a half, change is in the air. Whether it’s technology or new business models, the way we do business has to change in order to meet the times that we’re in and it has to change quickly.”
Today DOW Chemical sees itself as an innovation and technology company at the intersection of the sciences. And it isn’t just a matter of branding, Tazelaar adds; it’s a set of values that reflects the challenge of doing business in a world where competition can come from anywhere and no business is safe from disruption. As it translates to supply chain, DOW has made a number of moves in the last decade to modernize its technology and streamline processes across the board.
DOW turned to a cloud strategy to enhance visibility beyond the enterprise and to improve collaboration and overall agility throughout the supply chain. And while it’s only been two years since the chemical giant took that step, it’s already paying off.
“We’ve seen a significant cycle time reduction in the ability to move our products,” Tazelaar said. “The value – and this is conservative – is an $85 million in value generated or created as part of this program. That comes in a number of different forms.”
He points to a 4% increase in on-time deliveries for rail shipments – no small feat, considering DOW operates the second largest chemical rail fleet on the planet. “In rail that’s a step change of improvement,” Tazelaar adds. “Our cycle time improvement on when we send a train from one of our locations to a customer or a sister plant and back improved by over three days.”
A network approach to visibility has led to one instance of the truth globally, giving partners, carriers, suppliers, and customers a standard set of data from which to make decisions. It’s led to improvements in rail operations, ocean shipments, and has given DOW the ability to see and react to potential disruptions in the supply chain. It gets the right data in the right hands in the right business context, ultimately helping everyone in the supply chain make better decisions, Tazelaar says.
And it’s helping position DOW to meet the supply chain challenges of tomorrow.
“The Amazon effect of supply chain is impacting DOW Chemical,” Tazelaar adds. “Our customers have much more demanding requirements” than ever before.
Meeting those customer demands requires the speed and agility of a start-up. Luckily, DOW is up to the task.