As vice president of supply chain at a global chemical company, Donna Massari's formula for refining business processes under the current economic conditions calls for a renewed focus on "thinking globally" while also zeroing in on standardization.
[From iSource Business, February/March 2003] The global chemical industry has had at least as rocky a time in the past two years as any other sector. But even in the face of the prevailing global uncertainty, Donna Massari warns against becoming overly focused on today's economic challenges at the expense of working to position your supply chain for tomorrow's economy.
Massari is vice president of supply chain at Reichhold Inc., a Research Triangle Park, N.C.-based manufacturer of unsaturated polyester resins, and coating and performance resins for a variety of markets, including automotive, construction, transportation and marine sectors. Founded in 1927, Reichhold has 2,500 employees in 19 countries. It is owned by Tokyo-based Dainippon Ink & Chemicals (DIC), the world's largest producer of printing inks and polyester resins.
A 15-year veteran of purchasing, manufacturing and supply chain management at companies such as Honeywell, Allied Signal and General Electric prior to joining Reichhold, Massari holds a C.P.M. from the Institute for Supply Management (ISM) and is Six Sigma green belt certified. She came to Reichhold in December 2001 as senior director of supply chain before being named to her current post in December 2002.
iSource recently spoke with her about Reichhold's ongoing supply chain initiatives, the impact the economy has on its supply chain and the challenges of her new position.
iSource: What supply chain initiatives do you have underway at Reichhold?
Massari: We are utilizing technology in improving our supply chain in general, and specifically in purchasing and logistics our biggest initiative over the past year at Reichhold on a global basis has been implementing a business upgrade to SAP 4.6. It's not just a systems upgrade. It is a business process upgrade, and we're going through changes in each of the pertinent tracks in SAP that we feel are necessary to make our total business supply chain more efficient, including purchase-to-pay and materials management.
One area where we were challenged was in implementing the logistics portion of SAP. Most companies in the industry have their own logistics systems that bolt on to their [enterprise resource planning] systems, but we took the initiative and challenge to eliminate bolt-ons and to use the SAP system to its fullest capacity.
iSource: Why did you choose to go that route?
Massari: Bolt-on systems require integration, upkeep and maintenance. It's one thing to have one bolt-on, but that then opens the door to multiple bolt-on systems. We're focused beyond just the United States. We're implementing in Europe, where we have multiple sites in multiple countries, and in Brazil and Mexico. Taking a "why not just bolt-on" approach becomes difficult when you have multiple maintenance systems or logistics systems it makes you inefficient in the global process.
When we took a step back and looked at our global business, we saw that we probably had a little too much uniqueness in our business processes, and that creates those inefficiencies. So we quickly zeroed in on trying to standardize global business processes across all the tracks that we implemented in SAP. Our strategy has been to standardize globally to maximize efficiencies, and then to tailor to the local needs only where necessary.
iSource: You are Six Sigma green belt certified. How has that influenced your work on supply chain initiatives at Reichhold?
Massari: Streamlining manufacturing and non-manufacturing processes really has better positioned Reichhold to exceed customers' expectations in terms of quality, delivery and service, just to name a few. Six Sigma adds value in defining process and structures and putting disciplines in place. I think we'll see more focus on Six Sigma in 2003.
But I would also say that Reichhold took it in the right order. When I came in a year ago we focused on implementing SAP. That allowed us to put a strong information system in place as a foundation to the business process, so now all our units and departments are talking to one another electronically and information is flowing electronically. With that in place, we can now look at further refining business process using Six Sigma tools.
iSource: How are trends in your industry and in the larger economy influencing your supply chain initiatives?
Massari: Everybody is reading the papers and watching what's going on with the economy, and everyone is analyzing how those external factors effect their industry, both short term and long term. As you look at the fundamental dynamics and the platforms that go into the chemical industry, some you can control and some you can't.
On top of that, the economy is changing, and the dynamics today are different than five or 10 years ago. For instance, global competition clearly is here to stay. Taking those factors into consideration at Reichhold, we have to be able to effectively manage our total business supply chain in these less than optimal times to be better positioned for the future and the "new economy" dynamics we will face.
That's why I'm excited about what Reichhold did in the past year with the business process changes and putting an improved information systems foundation and business process focus in place to be more efficient. It further solidifies our global position and helps us improve our time to market and our competitiveness.
iSource: What is the toughest challenge for you, coming into your new position as vice president of supply chain at Reichhold?
Massari: The most fun challenge I've had is focusing my global team on our global initiatives whether that be procurement, logistics or working with manufacturing. It's easy to work as one team in the United States, or in Europe or in the different regions, but it's a big challenge to bring them all together in a global purchasing and logistics organization. Reichhold has plants in Italy, France, UK, Vienna, Norway and Dubai, and you have to bring them together, working as one strategic unit, with plants in Mexico and Brazil and the United States.
iSource: Is that a bit of a different mindset, thinking globally, for folks in the supply chain field?
Massari: It's definitely not new at Reichhold, but I think it's a renewed focus. You think you're global, but in the past we probably acted a little more locally, and we had the leeway to do that because times were different. But there is new focus on thinking globally today because of economic conditions. And it's not just at Reichhold. We're looking to our parent company, DIC, and to our sister company, Sun Chemical, to see how we can work better and more globally with them. And we've had some nice successes.
iSource: As a part of a larger company, how do you coordinate with your parent and sister companies to ensure that your supply chain initiatives and your supply chains are in synch?
Massari: From the very strategic big picture, the senior managements sits down periodically for meetings and discussions, and then the vice presidents will meet on a regular basis to discuss strategy and initiatives.
For example, with the logistics initiatives that have happened in Europe, the senior leadership met and discussed the fact that we're in similar industries, and for logistics everybody has to move freight, so where are the opportunities for synergies? Then it moves down to the next level to work out the details.
That's what happened when we started looking at raw material opportunities, where senior leadership from DIC and Reichhold got together and said: "We buy similar products. Let's get our groups together and explore that further." We wound up holding a series of joint meetings with our supply base as one "global" company, not as separate entities of Reichhold and DIC, or as Reichhold and our sister companies.
I will say that with the changing times, it's fun to be challenged to continue to think outside the box about how to do things differently, better, smarter and faster.
iSource: What do you see in the future for Reichhold's supply chain?
Massari: We'll continue to pursue e-business and information flow; anytime there's a manual process you look for ways to streamline it. Over the past couple years, there have been a lot of different software packages, and some succeed, some don't. But I truly believe in e-business and the Internet and the information technology that's out there to streamline processes and to make people and processes even more efficient. Reichhold will continue to look at that. And it's not just in purchasing and logistics, it is a change in the whole business process: How do we take customer orders and how do we get product and information to them faster, better and smarter? The chemical industry has come a long way, too, and I think that we're going to continue to find ways to do things better. I know that's where we're going to focus our supply chain efforts at Reichhold.