B USINESS USINESS II MPLEMENTATION MPLEMENTATION

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USINESSUSINESS

II

MPLEMENTATIONMPLEMENTATION

IC

ICI I dedecicideded d to to foform rm ststraratetegigic c bubusisineness ss alallilianancces es fofor r lolong ng tetermrm co

contntraractctuaual l coco-o-opeperaratition on wiwith th itits s papackckagagining g susupppplilierers. s. It It dedemamandndeded deli

delivery very of of qualquality ity matematerialrials s from from concontroltrolled led (ISO (ISO certcertifieified) d) prodproductuctionion processes

processes, switched price agreements to product lines and , switched price agreements to product lines and embarked on aembarked on a partner selection based on

partner selection based on quality, reliabilityquality, reliability, flexibility, and , flexibility, and cost criteria.Itcost criteria.It wo

would uld cocommmmununicicate ate to to thethem m its its proproducductiotion n reqrequiuiremrementents, s, sucsuch h as as ththee quality, quantity and timing of deliveries of packaging materials. This was quality, quantity and timing of deliveries of packaging materials. This was tr

trananslslatated ed ininto to dedeliliveveryry, , prprododucuctitionon, , anand d ininfoformrmatatioion n wiwindndowows, s, asas il

illuslustratrated ted in in tabtable le belbelow. ow. The The selselecected ted pacpackakaginging g supsupplipliers ers hahad d to to bebe re

ready ady to to prprogrogress ess to to e-be-busiusinesness s by by beibeing ng ICI ICI SysSystem tem comcompetpetentent. . ThThee chosen communication technology was EDI - because of the speed and chosen communication technology was EDI - because of the speed and security of communication, as well as allowing for a standard interface security of communication, as well as allowing for a standard interface between IT applications by means of ICI messages. Another requirement between IT applications by means of ICI messages. Another requirement was the ability to provide accurate and timely product movement data was the ability to provide accurate and timely product movement data a

annd d iimmpplelememennt t ththe e ccononcceept pt of of seselflf--bbililllining. g. TThhererefefoorre, e, trtraade de iitetemm numbering and bar coding was another pre-requisite.

numbering and bar coding was another pre-requisite.

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 The main purpose of the application was to record packed production  The main purpose of the application was to record packed production and to indicate when orders were complete and ready for dispatch. The and to indicate when orders were complete and ready for dispatch. The finished goods warehouse at a corrugated factory is essentially a holding finished goods warehouse at a corrugated factory is essentially a holding area where the pallets making up an order are assembled, immediately area where the pallets making up an order are assembled, immediately prior to

prior to dispatch. The norm dispatch. The norm for for Packaging is Packaging is for goods for goods to be to be manufacturedmanufactured to meet specific orders rather

to meet specific orders rather than being manufactured for future dispatchthan being manufactured for future dispatch from stock.

from stock.

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TANDARDIZATIONTANDARDIZATION

Once this system was

Once this system was operationaoperational, a number l, a number of customers requestedof customers requested the addition of further bar coded information to the pallet labels on loads the addition of further bar coded information to the pallet labels on loads de

deliliveverered d to to ththeieir r fafactctororieies, s, sso o ththat at ththey ey cocoululd d rerecocord rd ththe e papalllletetss automatically into their computerized warehouse stock control systems. automatically into their computerized warehouse stock control systems. Each of these customers required different information to be added to Each of these customers required different information to be added to their labels and used a variety of bar

their labels and used a variety of bar code symbologicode symbologies. Because the labeles. Because the label printing system was written in-house, including the

printing system was written in-house, including the control of the control of the printers,printers, it was possible to accommodate these disparate requirements, but it did it was possible to accommodate these disparate requirements, but it did complicate the software involved. To cater for the requirement an area of  complicate the software involved. To cater for the requirement an area of  th

the e lalabel bel was was resreserverved ed for for ththis is infinformormatiation. on. BecBecausause e of of the the popotententiatiall ni

nightghtmarmare e scscenaenario rio whwhere ere eveevery ry cucustostomer mer wouwould ld eveeventuntuallally y reqrequeuest st aa special unique label and the benefits of using a standard packaging label special unique label and the benefits of using a standard packaging label beca

became qume quite cite clearlear. . PacPackagikaging ng saw saw that that the Ithe ICI LogCI Logistiistics Lacs Label, bel, aparapartt from being a global standard, provided a number of other advantages. The from being a global standard, provided a number of other advantages. The use of bar code increased the readability of the label in less friendly use of bar code increased the readability of the label in less friendly environments. The use of a range of ICI Application Identifiers provided environments. The use of a range of ICI Application Identifiers provided the flexibility needed to cater for variability in customer requirements the flexibility needed to cater for variability in customer requirements wi

withthouout t nenececessssararilily y prprejejududicicining g ththe e ststanandadardrd. . ThThe e SeSeririal al ShShipippipingng Container Code (SSCC) provided a facility for the automatic traceability of  Container Code (SSCC) provided a facility for the automatic traceability of  loads.

loads.

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EY EY 

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ENEFITS OFENEFITS OF

ICI SICI S

 YSTEM YSTEM

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PPLICATIONPPLICATION

A first analysis of the process has produced three key benefits: A first analysis of the process has produced three key benefits:

• This partnership allows both companies to know and understand each • This partnership allows both companies to know and understand each other's constraints;

other's constraints;

• This system speeds up the process; • This system speeds up the process;

•Cutting non-value-adding activities has reduced costs. For Smurfit, the •Cutting non-value-adding activities has reduced costs. For Smurfit, the key benefits are mainly qualitative.

key benefits are mainly qualitative.

 The entire staff responded to the goals, the factory planning and  The entire staff responded to the goals, the factory planning and manufacturing improved and the safety stocks disappeared. ICI standards manufacturing improved and the safety stocks disappeared. ICI standards application helped everyone in the logistics operations to become more application helped everyone in the logistics operations to become more prec

qu

quanantititatatitiveve.B.Befeforore, e, ththe e avavereragage e dedelilivevery ry titime me wawas s twtwo o weweekeks. s. SoSo,, customers had to order three weeks in advance, generating three weeks customers had to order three weeks in advance, generating three weeks of stocks. Now, with the application of SMI, decisively supported by ICI of stocks. Now, with the application of SMI, decisively supported by ICI standards, the delivery is always done in one week. Furthermore, Smurfit’s standards, the delivery is always done in one week. Furthermore, Smurfit’s ser

servicvice e ratrate e is is nonow w incincrereaseased d to to 99%99%. . BenBenefiefits. ts. ThThe e otother her quaqualitlitatiativeve benefits and changes in working methods are summarized below.

benefits and changes in working methods are summarized below.

•

• Supplier Managed Inventory: Major changes in workingSupplier Managed Inventory: Major changes in working

methods methods

Because SMI has proved to be efficient, the two companies now plan to set Because SMI has proved to be efficient, the two companies now plan to set up the same

up the same kind of collaboration with other trading partners. Migration tokind of collaboration with other trading partners. Migration to the daily flow is their other objective. It will surely be the year of SMI roll- the daily flow is their other objective. It will surely be the year of SMI roll- out throughout our factories and with strategic suppliers.

out throughout our factories and with strategic suppliers.

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ORWARDORWARD

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LOOKINGLOOKING STATEMENTSSTATEMENTS

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  Thihis s dodocucumement nt cocontntaiains ns ststatatememenents ts coconcncerernining ng ththe e GrGrououp’p’ss bus

busineiness, ss, finfinancanciaial l cocondinditiotion, n, resresulults ts of of opeoperatratioions ns anand d cecertartain in of of thethe Group’s plans, assumptions, or expectations with respect to these items. Group’s plans, assumptions, or expectations with respect to these items.  These statements are intended as forward-looking statements within the  These statements are intended as forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. These meaning of the US Private Securities Litigation Reform Act of 1995. These sta

statemtementents s incincludlude, e, witwithouhout t lilimimitattationion, , thothose se conconcecernirning: ng: the the GrGroupoup’s’s sstrtratategegy y aannd d iits ts aabibilliity ty tto o aacchhieievve e iitt, , tthe he bbeenenefifits ts of of ththe e GGrrooupup’’ss rreessttrruuccttuurriinng g pprrooggrraammmmeess, , tthhe e GGrroouupp’’s s ddiissppoossaalls s ppllaannss, , tthhee implementation of new systems, the Group’s possible or assumed future implementation of new systems, the Group’s possible or assumed future results of operations, trends in raw material costs, the Group’s views on results of operations, trends in raw material costs, the Group’s views on improvements in markets and trading conditions and those preceded by, improvements in markets and trading conditions and those preceded by, ffoolllloowweed d bbyy, , oor r tthhaat t iinncclluudde e tthhe e wwoorrdds s ‘‘‘‘bbeelliieevvee’’’’, , ‘‘‘‘eexxppeecctt’’’’,, ‘‘intend’’,‘‘plan’’, ‘‘anticipate’’ or similar expressions. Actual results may ‘‘intend’’,‘‘plan’’, ‘‘anticipate’’ or similar expressions. Actual results may

differ from those expressed in such statements, depending on a variety of  differ from those expressed in such statements, depending on a variety of  factors including, among other things, the impact of competitive products factors including, among other things, the impact of competitive products and pricing, adverse macro economic factors, changes in the price of raw and pricing, adverse macro economic factors, changes in the price of raw materials, the occurrenc

materials, the occurrence e of major operational problems, the loss of of major operational problems, the loss of majormajor cu

custostomermers, s, lilimitmitatiations ons imimposposed ed by by the the ComCompanpany’s y’s indindebtebtedednesness s anandd leverage, a credit rating downgrade by the rating agencies, contingent leverage, a credit rating downgrade by the rating agencies, contingent liab

liabilitilities, ies, inclincludinuding g thosthose e arisarising ing in in connconnectiection on with with recerecently ntly dispdisposedosed businesses, risks associated with the Company’s international operations, businesses, risks associated with the Company’s international operations, risks of litigation, and other factors described in

risks of litigation, and other factors described in the Company’s filings withthe Company’s filings with the Securities and Exchange Commission.

the Securities and Exchange Commission.

 You should read the Company’s Annual Report and Accounts and Form 20-  You should read the Company’s Annual Report and Accounts and Form 20- F, which is available without charge at the internet site of the Securities F, which is available without charge at the internet site of the Securities and Exchange Commission for more information regarding factors that and Exchange Commission for more information regarding factors that c

couould ld cacaususe e acactutual al reresusultlts s anand d dedevevelolopmpmenents ts to to didiffffer er frfrom om ththososee expressed or implied by the forward-looking statements in this document. expressed or implied by the forward-looking statements in this document.   Y

  You ou shshouould ld alalso so reread ad ththe e CoCompmpanany’y’s s rerelalateted d ququararteterlrly y reresusultlts s prpresesss release that is included in

release that is included in these presentation materials and is also locatedthese presentation materials and is also located at the Internet site of the Securities and Exchange Commission.

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IBLIOGRAPHY IBLIOGRAPHY 

BOOKS: BOOKS:

SUPPLY CHAIN MANGEMENT SUPPLY CHAIN MANGEMENT By:

By:

BURT, DOBLER, STARLING BURT, DOBLER, STARLING

SUPPLY CHAIN MANGEMENT SUPPLY CHAIN MANGEMENT By:

By:

SUNIL CHUPRA, PETER MEINDL SUNIL CHUPRA, PETER MEINDL

WEBSITES: WEBSITES:

http://en.wik

http://en.wikipedia.org/wiipedia.org/wiki/ICI_Pakiki/ICI_Pakistanstan

http://www.akzonobel.com/pk http://www.akzonobel.com/pk

In document Ici Supply Chain Management Report by Ali Raza (Page 34-38)