Case Study: Aligning Marketing and Operations Strategy
An international chemical manufacturer uses Business Navigation Systems’ Client Engagement Model to align its marketing and operations strategy and enable profitable growth.
Initial Situation: The North American distribution arm of a $1 billion international chemical manufacturer had grown rapidly in recent years and was concerned that their supply chain had grown incrementally, without an overall plan. Management was concerned that costs were too high and supply was unreliable.
Contributing Factors: Market share growth was driven by industry-leading customer service and on-time delivery. This often required extraordinary effort. Management was hesitant to pursue new large customers due to concerns about their ability to maintain reliable delivery as their business grew.
Approach: BNS worked with the client, using an abbreviated version of its Client Engagement Model, focused on Value Delivery. The first step was to develop a precise definition of the client’s problem.
An analysis of the client’s public financial records showed their business consistently had attractive operating profits and return on assets. They had suffered mildly from the global economic turmoil in late 2008, but were quickly recovering. With several capital-intensive chemical-manufacturing plants under construction, on-going volume and market share growth was critical to the company’s future financial success.
Interviews were conducted with the client’s management team to better understand their business and the key issues they faced. BNS created a map of the client’s North American distribution network (similar to a value stream map, but with less detail) for its key product. The results of the interviews were analyzed using BNS’s Affinity Research Technique to map the relationships from the client’s market opportunity to the supply chain improvements. Based on this analysis, BNS recommended a supply chain improvement plan with an immediate focus on the key issue constraining the client’s growth: variability of intercontinental bulk chemical shipments on parcel tankers.
A stochastic simulation model of the parcel tanker shipment variability was created. This model helped the client’s management team understand how storage capacity, inventory levels, shipment frequency, transit time, and transit time variability impacted supply reliability. It also gave the client a key tool to plan the growth of their business and have the confidence to take on new large customer opportunities.
Results: The client is poised to continue their rapid volume and market share growth. BNS is continuing to work with them to implement a global supply chain improvement plan.