Akzo Nobel Surfactants Smoothes Supply and Demand with S&OP

Leveraging a global solution as a platform for sales and operations planning to improve demand, inventory and supply planning


By Editorial Staff

If you have recently done your laundry, washed your hair or driven your car, chances are you have indirectly come in contact with products from Akzo Nobel Surfactants, a division of Akzo Nobel's Chemicals group. And while we may not readily think of chemicals when we think of products like shampoo and fabric softener, surfactants are used in almost every industry.

Surfactants are a class of chemicals that change the surface of materials when mixed with water or other chemicals. For example, laundry products contain surfactants to remove dirt and stains while also making clothing soft to the touch. Shampoo contains surfactants to clean and condition hair, and a car's engine oil contains surfactants to keep vital parts clean so an engine burns clean and lasts longer. Surfactants are also used in agricultural additives, asphalt paving, household and industrial cleaners, printing inks, paints, and paper pulp.

Akzo Nobel Surfactants is a division of Akzo Nobel's Chemicals group, one of the world's top chemicals producers. Akzo Nobel's chemical activities are grouped into five businesses: pulp and paper chemicals, polymer chemicals, surfactants, functional chemicals, and base chemicals. Akzo Nobel Surfactants manufactures more than 2,000 chemical products and more than 5,000 active stock-keeping units (SKUs), and manages millions of dollars worth of inventory monthly.

Applying S&OP for a Better Supply Chain

With such a large variety of products manufactured in six locations on two continents, managing Akzo Nobel's supply chain is an extremely complex task. In 2003, Akzo Nobel Surfactants made the decision to implement a formal sales and operations planning (S&OP) process to help bring the company's supply chain together more frequently and enable planners to communicate better to ultimately increase productivity and track inventory.

In simple terms, S&OP can be viewed as a process to bring together the business organization on a regular basis to make effective decisions on how to reconcile conflicts and develop a profitable game plan. Key to the S&OP process is ensuring that each group within the organization is making decisions based on the same set of data. Manufacturing cannot operate with its version of uncertainty, purchasing operate with another version, and sales operate with its own version. Another important focus of S&OP is not only to balance supply and demand, but also to keep them balanced. To maintain this balance on a regular basis, Akzo Nobel Surfactants knew it was necessary to have an effective process in place.

To help the company execute its formal S&OP program, Akzo Nobel Surfactants turned to Supply Chain Consultants' Zemeter S&OP solution for demand and inventory planning. Zemeter Supply Planner has the ability to maximize margins and quickly handle demand and/or supply disruptions, and the solution is able to evaluate planned changes to markets, including sourcing patterns, capacity, transportation and distribution.

Before the Zemeter implementation, Akzo Nobel Surfactants ran into many challenges with sharing data across different areas of the company. The company's previous supply chain management solution only allowed one user at time, making data transfers extremely difficult.

"One of the reasons we selected Zemeter is because it is a multi-user solution, which makes the systems available to everyone," says Bill Shearer, the demand chain manager at Akzo Nobel Surfactants at the time of the project. (Shearer has retired since the interview for this article). "The visibility of our forecast is much better since more people can view it, raising awareness of important issues earlier."

Shearer adds that Zemeter also makes it easier to compile reports. "With our previous solution, we had to download the data and manipulate them in Excel to get any answers. Now we can very easily create a new forecast error report using Zemeter because reports are preset. Productivity has gone up tremendously as a result, saving us at least a couple of days a month."

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