Chemical Manufacturing and Digital Transformation Join Forces
Chemical manufacturing and digital transformation go hand-in-hand to drive inventory efficiencies, comply with regulations, and speed time to market:
These are exciting times. Thanks to the digital transformation movement, we have the most amazing, wonderful technology available to drive business performance and operational excellence – and more of it than at any time in history.
Then again, times can look pretty scary. Digital technology and practices present new frontiers and unmapped territory. The usual business challenges are bigger and badder: global competition, complex supply chains, new regulations.
In the digital economy, the things that used to work great are no longer adequate. Dan Schulman, CEO of PayPal puts it succinctly: “The biggest impediment to a company’s future success is past success.”
NTT DATA Business Solutions customer Zinpro Corporation is a case in point. At the Best Practices for Chemicals conference in 2017, I had the privilege to present with Mark Thome, global information technology director for Zinpro. Mark’s company has a great story about chemical manufacturing and digital transformation.
Zinpro manufactures trace mineral supplements farmers add to livestock feed to support the health of their animals. The company is on a positive growth trajectory, but its legacy systems and processes were inadequate to support company goals. The company’s products also recently became subject to a new FDA regulation.
To grow the company and improve time to market, Zinpro had to recognize and face up to the reality of the digital business environment:
- Change is outpacing IT – Chemical companies require greater choice and flexibility, the ability to quickly act on information, and most of all, speed.
- Business leaders need to execute in the moment – There is increasing pressure to get ahead of the competition and deliver speedy results; that requires the ability to manage mountains of data, and yet do it in a simplified way.
- There’s an explosion of data, devices, decisions – Enterprises need to simplify and integrate.
Zinpro had a thorny – but not unfamiliar – inventory challenge. The company’s legacy software lacked visibility, so no one really knew exactly how much they had, or where it was. In addition, paper-based manual processes contributed to costly delays and inaccuracies. All that, plus the inability to track and trace at the lot level, made it frighteningly difficult to comply with the new Food Safety Modernization Act.
Zinpro knew it had to get its inventory under control, with technology and processes that would help the company:
- Track inventory — Know where it is, how much to make, how to position it for timely fulfillment
- Reduce inventory — Plan better, hold less inventory, keep less material in warehouses, reduce working capital tied up in inventory, free up capacity.
By implementing SAP Suite on HANA and SAP-certified G.I.B. supply chain management modules, Zinpro got a handle on the inventory challenge. With more timely and accurate inventory in SAP, Zinpro has been able to:
- Improve planning
- Optimize business performance
- Enable global growth
- Comply with confidence
Zinpro was able to dramatically increase capacity – with both inventory reductions and a new plant – allowing the chemicals manufacturer to transition from a make-to-order to a make-to-stock model. That means Zinpro and can now supply product to customers in days instead of months. And, the company can be confident that it has the best technology and processes in place to maximize the performance of its new plant. Zinpro implemented sales and operations planning (S&OP), and MRP. Just as important, implementing systematic track-and-trace technology and processes ensures regulatory compliance.
All this has driven material improvements in both top-line and bottom line performance.
But don’t just take it from me – watch the presentation video and hear Mark tell how Zinpro dramatically combined chemical manufacturing and digital transformation to dramatically improve time to market.