Major Petrochemical Company
The 500 acre United Kingdom site is one of the petrochemicals company’s major production centers, manufacturing over 1.8 million tonnes of products each year. In recent years, the site has benefited from £500 million investment in a series of projects, including expansion of the site's production units and a new plant to improve the quality of gasoline and diesel fuel.
The Customer’s Challenge
To examine and health check the downstream supply chain from the UK site, as well as the distribution center facilities in mainland Europe and deliveries to customers worldwide. The petrochemical company required an external perspective and expert recommendations around site logistics activities; product route-to-market; supplier selection; and potential ‘optimization’ prize in respect of £50 million estimated supply chain costs.
Agility delivered a three month consultancy project to review the business’s forward supply chain provision. The consultancy program benchmarked performance and identified a series of improvement opportunities. The program was broken into three phases:
Phase One: Process mapping and understanding the supply chain. This was achieved through data analysis, site visits, and structured internal and external interviews.
Phase Two: Agility constructed a ‘cost to serve’ model that summarized the whole of the secondary supply chain; including fixed and variable costs such as freight, packaging, handling, administration and customs.
Phase Three: Included commercial benchmarking of freight and associated costs, along with a comprehensive market review and strategic recommendations.
Across the three phases, nine improvement projects were identified:
- Payload Efficiency
- Network Optimization
- Commercial Strategy
- Planning and Forecasting
- Logistics Processes
- Service Infringements
- Performance Management and Key Performance Indicators
- Logistics IT Systems Integration
- Financial Processes & Self-billing
The Result: Savings Identified
Through the detailed three-phase consultancy program, Agility was able to identify nine improvement projects to create greater efficiency, and deliver nearly £6 million of savings. Agility won a follow-up contract to work with the petrochemicals company’s teams in order to facilitate delivery of the improvement projects.
Service Portfolio Supporting This Case Study
- Supply Chain Evaluation & Logistics Process
- Supply Chain Modelling & Cost to Market
- Network Optimization
- Tactical Improvement Projects
- Systems & IT Integration Review