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Sector platforms in the chemical industry How do service and logistic providers react

Sector platforms in the chemical industry How do service and logistic providers react Content Company Profile Bargelink a public marketplace Chemical industry Characteristics E-Business Marketplaces private or public Types of marketplaces Marketplaces and function in order process

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Sector platforms in the chemical industry How do service and logistic providers react

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  1. Sector platforms in the chemical industryHow do service and logistic providers react

  2. Content • Company Profile • Bargelink a public marketplace • Chemical industry • Characteristics • E-Business • Marketplaces private or public • Types of marketplaces • Marketplaces and function in order process • Analyze for Chemical products and logistic services • Public or Private • Lowering logistic cost - Choices • Conclusion R.R.J. Brouwer; 20 Feb, 2002.

  3. Pakhoed Van Ommeren (1839) Vopak today • Leading global position in each of its three core businesses • Over 24 million m3 of tank storage • 75 tank terminals around the world • 225 chemical distribution facilities • Access to approximately 225 vessels • Integral part of global oil & gas and chemical logistics and distribution infrastructure • Sales of EUR5.6bn (FYE 2000)* and EBITDA of EUR535m (FYE 2000)* • Listed on Euronext Chemical Distribution Chemical Logistics Oil & Gas Logistics Company Profile Vopak’s historic development Blauwhoed (1616) Pakhuismeesteren (1818) Ellis & Everard (1848) 1967 1999 2001 • 75 years of chemical distribution experience • 400 years of logistics experience R.R.J. Brouwer; 20 Feb, 2002. Note: * Including 12 months Ellis & Everard, acquired in January 2001

  4. Marketplace for Barges on the River Rhine:Bargelink R.R.J. Brouwer; 20 Feb, 2002.

  5. R.R.J. Brouwer; 20 Feb, 2002.

  6. R.R.J. Brouwer; 20 Feb, 2002.

  7. Das Bargelink-Prinzip • Praxisorientierte Prozesse und Datenbänke • Einfache Menübedienung • Jeder Nutzer bestimmt seine Geschäftspartner • Konditionen und Bedingungen für Transporte frei wählbar • Kosten (1,25% vom Transportumsatz) nur bei Erfolg • Keine Registrierungskosten • Hohe Datensicherheit durch SSL-Verschlüsselung R.R.J. Brouwer; 20 Feb, 2002.

  8. Bargelink lessons learned • E-Readiness of market participants has been underestimated, but interest and activity are growing • We knew from the start that the mineral oil barging market is too small, so since sep 2001 also open for dry goods • Manage your burn rate, listen to your customers R.R.J. Brouwer; 20 Feb, 2002.

  9. The Chemical industry R.R.J. Brouwer; 20 Feb, 2002.

  10. Chemical Industry Characteristics • Hazardous materials (mainly liquids) • Safety, Health and Environmental protection is top priority • Responsible Care: Standards for service providers • Service provider needs to comply with minimum requirements • Hurdle to continuous change of partners • Global industry community • Many intra company relationships (sales between companies) • Strong drive for standardization on non-competitive items • Established industry • Mainly commodity products • Strategic focus on cost reduction (manufacturing & supply chain) • Price pressure on service providers • But also partnership to take real cost our of supply chain R.R.J. Brouwer; 20 Feb, 2002.

  11. Chemical Industry & e-Business • Adapted late to new technology: 1999 • Like any other industry boom in 1999/2000, publicity around marketplaces focus extra revenue • 2001 Back to reality: Marketplaces consolidated by M&A • 2002 Lower industry results : Focus on cost decrease • Chemical industry immediately realized standardization will be key to success: • CIDX developed Chem-e-Standard for XML messages • Elemica : Connectivity Hub initiative of 23 large companies R.R.J. Brouwer; 20 Feb, 2002.

  12. Marketplaces R.R.J. Brouwer; 20 Feb, 2002.

  13. Types of Market places Buyer Buyers Bank Buyer Marketplace HUB Marketplace Seller Seller Seller Logisticprovider • Marketplaces fulfill several roles, need to segregate for a meaningful analysis R.R.J. Brouwer; 20 Feb, 2002.

  14. Market places – Function in order process Chemical products: Marketplaces (browser) 2000 Elemica (XML) 2001/2002 2H02/2003 2003 Promotion Request price quote Negotiate price Order & Acceptance Invoicing & payment Customer feed back Delivery Request price quote Negotiate price Invoicing & payment Order logistics Transport The related transport process flow R.R.J. Brouwer; 20 Feb, 2002.

  15. Marketplaces Chemical products R.R.J. Brouwer; 20 Feb, 2002.

  16. Marketplaces Logistic Services R.R.J. Brouwer; 20 Feb, 2002.

  17. R.R.J. Brouwer; 20 Feb, 2002.

  18. Private or Public • Proof of the pudding is in the eating: • No public marketplace is profitable yet! • Private marketplaces give internal efficiency gain (at least) • Need to take functionality into account • Find those functions that give benefit to all parties involved • How to share these benefits • Nightmare: All clients work via different systems • Standardization will be key to success • Public marketplaces can play a role in standardization development R.R.J. Brouwer; 20 Feb, 2002.

  19. Transportation marketplaces Lowering logistic cost - Choices • Spot relationship: • Shipper achieves lowest rate, but uncertain of acceptance • Transporter fills empty legs, if fit with offers • NEED: Very high liquidity and open market, no constraints. • Marketplaces can be an efficient approach for RFQ • Contract relationship: • Partnership allows for guaranteed fulfillment and quality level • Take total cost of supply chain into consideration, • Fundamentally decrease cost in parts of process • NEED: Trust, openness and willing to jointly reduce cost • E-Business: Automatic ordering, order track&trace, collaborative planning R.R.J. Brouwer; 20 Feb, 2002.

  20. Conclusion • There will probably be a mix of private and public marketplaces in the short term so LSP should be flexible in order acceptance. • After initial focus on RFQ/negotiation part of the process, the focus has shifted to order fulfillment and the logistic order process • Vopak effort is currently focused on fulfillment part: • Transparency: Order track&trace • Automation of orders (avoid errors) • Planning of order fulfillment (experiment) R.R.J. Brouwer; 20 Feb, 2002.

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