DOW Business Services…
Accelerating Success
Powering up to serve Dow Businesses and JVs
By Niklas Meintrup
LogiChem 2011 will be the event's tenth anniversary and an opportunity for the most senior chemical supply chain & global logistics directors from the European chemicals community to come together once again share experiences, make new contacts and benchmark the latest chemical supply chain initiatives.
Not only will LogiChem 2011 be a chance for the chemical industry to reminisce about the last ten years but an opportunity to shape the next decade. To celebrate a decade of LogiChem, there will be an exciting three day programme filled with networking opportunities in our new location, Antwerp.
1. DOW Business Services…
Accelerating Success
Powering up to serve
Dow Businesses and JVs
Niklas Meintrup
Director
Dow Business Services Pacific
2. Our Industry
Turning Feedstocks into
Essential Products
Building &
Construction
Salt Gas Electronics
Agriculture
Oil Coal Wire & Cable
Coatings
Biomass Recycle
Automotive
3. Dow’s Global Supply Chain: Fast Facts
9,000 global employees in Business 26,000 railcars –
second largest
Services fleet in the world
45,000 customer ship-to locations
Shipping sites in 200 countries
2.5 million shipments each year
To-thirds of volume by land; one-third by
marine
20% of shipments involve international
border crossings with Customs clearance
80% not hazardous; 1% highly hazardous
99.97% incident-free
Comprehensive Sustainability Strategy for
Supply Chain and Purchasing.
300 warehouses
& 122 terminals
4. Dow’s Evolving Business Model
Operating Margins
0% 10% 20%
40%
Selling, Admin, R&D Expenses % of Sales
Highly
30%
Differentiated
Market-
20% Driven
Performance
10%
Basics
0% 10% 20% 30% 40% 50% 60%
Gross Margin % of Sales
5. Dow’s Business Model – Three Integrated Parts
Highly Differentiated
Health & Agricultural Sciences
Market Driven Electronic & Specialty Materials
Technology Differentiation
Coatings & Infrastructure
Performance Systems
Performance
Performance Products
Basic Plastics
Basics Basic Chemicals
Hydrocarbons & Energy
Customer Intimacy
6. Dow’s New Operating Segments
Advanced Materials
Electronic & Coatings & Infrastructure
Specialty Materials $6.2
$5.7
Health & Agricultural Sciences
Health & Agricultural Sciences
$4.6
Performance Products & Systems
Performance Systems Performance Products
$8.2 $13.1
Basics
Basic Plastics Basic Chemicals Hydrocarbons & Energy
$14.2 $4.3 $9.0
Note: All figures represent 2008 pro forma sales, in billions of dollars
7. Business Services …
Gearing Up to Power the New Dow
Operating Margins
0% 10% 20%
Selling, Admin, R&D Expenses % of
40%
Highly
Differentiated
30%
Market-
Sales
20% Driven
Performance
10%
Basics
0% 10% 20% 30% 40% 50% 60%
Gross Margin % of Sales
Drive Agility
Drive Customer focus
Improve Profitability
Enhance Flexibility
Enable Innovation
8. Business Services
Business Services announced late 2008
Supports Dow’s operating model
Capitalizes on strong foundation of functional
excellence
Organized around service capabilities delivered by:
Customer Service, Supply Chain, Environment Health & Safety,
Purchasing, Information Technology, Facilities Management,
Six Sigma, Process-focused elements of Finance and HR
9. Business Services Vision
“Dow Business Services offers a leveraged
model that enables Dow businesses and
JVs to run faster, safer, leaner and more
profitably than any competitor in the
industry.”
To achieve this vision, we are:
Organizing around our businesses and JVs
• Adopting a new, more flexible, market-competitive approach
• Listening to better understand and meet client and their customers needs
Emphasizing operational excellence
• Increasing service integration and leveraging best practices
• Changing how Dow performs daily operational activities
• Allowing businesses and JVs to focus on strategy and customers
10. Understanding the Pieces of the Puzzle…
Dow Businesses align to 3 Operating Models
Dow Corporate Center provides governance and oversight
Dow Business Services provides service capabilities to all
3 operating models and JVs
Performance
Products
Dow AgroSciences
Chemicals,
Plastics & Feedstocks
Advanced Materials
Performance
Products
JVs & Basics Market-Driven
Corporate Center
11. Focus on the customer
Flexibility to bring
capability that meets the
growth demands of Dow’s
businesses and JVs and
their customer
Continue to increase
productivity, while
Dow Businesses & JVs maintaining scale and
Client Interface / Service Management
lowering cost to serve
Business /
Finance
Office
Maintaining required
Business Consulting &
integration throughout
Asset Project
Process
Operations and
Expertise Business supply chain
Services Services Services
Support
Center Work
Center Process
Bring competitive
advantage to Business
Business Services Operating Unit Models Units
12. Business Services Organization Model
Corporate Center Leveraged Business Units Independent Business Units
JVs & Non-Affliated Basics Performance Market Driven
Service Management
Business /
Finance Office
Customer Service
Business Consulting & Supply Chain
Business
Process Asset Project and Expertise
Services Center Operations Support Center Services
EH&S
Services Work
Process
Purchasing
IT
Facilities Mgmt
Six Sigma
Business Services Operating Unit Models
Process-focused
elements of Finance
and HR
13. Business Services Organization Model
Corporate Center Leveraged Business Units Independent Business Units
JVs & Non-Affliated Basics Performance Market Driven
Service Management
Client Interface and Service Management Business /
Finance Office
• Creates a portfolio of services for Dow businesses and JVs and establishes contracts.
• Manages overall DowAsset
Business business / JV engagement. Consulting &
Project and Business
Process Expertise
• Portfolio management of all services provided or channeled through Business Services.
Services Center Operations Support Center Services
Services Work
Process
• Manage service lifecycle
• Introduce new services and retire obsolete/low value services
• Improve existing services where they fall short
• Ensure services are capable and competitive
• Measured by service satisfaction, metrics and benchmarks
Business Services Operating Unit Models
• Ensure that services are delivered in alignment with agreements
• Contracts and/or Service Level Agreements (depending on the client)
• Manage “cost-to-serve” of the services
14. Business Services Organization Model
Corporate Center Leveraged Business Units Independent Business Units
JVs & Non-Affliated Basics Performance Market Driven
Service Management
Business /
Specializes in mature, well understood work, Business Office
Finance /
providing consistent
Finance Office
work process execution and lower costs to businesses and JVs.
Business Consulting & Business
Process Asset
Services are provided and Consulting functions, Services Work
Project to businesses, &
Expertise and JVs
Business Business
Business
Services Center Asset
Operations Support Center
Project and Services
Process Expertise Process
Services Work
Process
Services Center Has processes in Center
Operations Supportplace to accomplish significant work that requires
Services Process
Services Center judgment and know-how, is expanding scope beyond the transactional.
Partners with third-party suppliers to provide cost-effective, flexible
resourcing with capabilities required to meet demand, at significant
cost savings to the Company.
Business Services Operating Unit Models
Employs a global network of strategic locations (Midland and Mumbai)
Business Services Operating Unit Models
and satellite locations (Sao Paulo, Shanghai and Terneuzen) to
provide uninterrupted, high-quality service.
15. Business Services Organization Model
Corporate Center Leveraged Business Units Independent Business Units
JVs & Non-Affliated Basics Performance Market Driven
Service Management
Business /
Supply Chain Finance Office
Operations These –units full list the operational arms of
Etc click for are
Business /
Business
IS Operations theConsulting &
functions Finance Office
Asset Project and Consulting & Business
Process Asset EH&S Expertise Business
Services Center Operations Support and
Project
Operations Center Expertise
Services
Services Work to assets.
Services require a physicalWork
Services link
Operations Support Center Services Process
Project and −Examples include carrier logistics
Communication Process
Business
Asset Services
Support Center Services Work
management, site security and
Operations Lab and Facilities Process
Management emergency response, IT field services,
Emergency and
Security Services
building maintenance and property
management.
Accountable for delivering low cost and
Business Services Operating Unit Models
high quality service that meets
Operational Level Agreements (OLAs)
16. Business Services Organization Model
Corporate Center Leveraged Business Units Independent Business Units
JVs & Non-Affliated Basics Performance Market Driven
Service Management
Business /
Finance Office
Business /
Delivers Finance Office
against the prioritized
needs
Consulting businesses, JV customers,
of Dow & Business
Project and Expertise corporation in executing
Business
Asset Support Center
Project and
and the
Consulting & Services Work
Business
Process Project and Services
Expertise that create or improve work
Services Center Operations Support Center projects
Services
Process
Services Work
Support Center Process
processes – typically with IT
enablement.
Provides cross functional capabilities
at lower than market competitive
pricing.
Business Services Operating Unit Models
Meets variable business demand.
• Centers in Michigan
(Midland/Saginaw/Southfield),
Philadelphia, Shanghai
17. Business Services Organization Model
Corporate Center Leveraged Business Units Independent Business Units
JVs & Non-Affliated Basics Performance Market Driven
Service Management Chain Consulting
Supply
and Expertise Services
Purchasing Strategic
Sourcing
Advertising
Business /
Finance Office
Functional expertise that the ES&S
Expertise
customer or client will pay for
Business Business Consulting Consulting &
Product Stewardship & Business
Process Process Asset AssetProject andProject andExpertise Expertise Services Work
Services Center knowledge, expertise, Center IT Consulting
Provides
Services Center
Support
Operations Operations Support Center
Project andServices Services Process
advanced technology and Support Center Consulting &
Expertise
solutions consultation to Dow’s Safety Expertise Center
Services
corporate center, businesses, Environmental
Technology Center
major integrated manufacturing Health Services and Services for the
sites and JVs. Epidemiology Corporation
Six Sigma Consulting Remediation
Advocates externally forOperatingOperating Expertise
Business Business Services Unit Models Models
Services sound and Unit
public policy consistent with Toxicology and Auditing & Compliance
Environmental Research
Dow’s business objectives. and Consulting Sustainability
IT Security
18. JVs are a fourth business model
we serve from Business
Services
19. Value Proposition
Deliver services for at least 20-30% lower cost than what a business
unit can achieve by acquiring independent services or executing these
services on its own.
Provides for quicker start up of
new businesses, which:
Mitigates risks (with proven
processes and technologies)
Accelerates operational stability and
ability to sell products
Drives competitive advantage
through value delivery
Accelerates workforce
and world-class operating
performance
20. Summary
The new DOW requires a customer focused
service model with profitability emphasis
Strong foundation of functional excellence
and cost control
Business Service and its 4 operating units
are providing a market competitive, flexible
model for delivery of services and
capabilities for Dow Businesses and JVs
New DOW businesses and JVs benefit from
proven Business Service capabilities
through quicker start up with lower risk
and cost