Complexity management

A. Backhaus: The perspective on complexity is twofold: First, we see the opportunity to address more customer requirements by extending the product and service portfolio. Supply-chain management has to manage this value-adding complexity with all needed consequences as differentiation of services. Second, there is homemade complexity in our supply chains. Here, we analyze carefully benefits and costs and consequently minimize this kind of bad complexity, which might lead to unnecessary working capital.

For both cases, logistics partners need to support us by providing lean or differentiated services with an integrated information flow. The required end-to-end view demands closer collaboration between supply-chain partners in the future.

Cooperation with logistics service providers

A. Backhaus: Looking at my company, BASF, I see many opportunities in this field. For our global distribution and production network, with more than 380 production sites around the globe we use global logistics services, like maritime transportation and airfreight. Intense cooperation supports our efforts in executing and automating standardized processes for the flow of goods, documents and information. Within a region, transportation is a rather country-specific business executed by regional or local logistics partners. In emerging markets, we sometimes develop the market together with logistics partners, because local requirements for transporting and warehousing chemicals are unique. We are open to innovative ideas and encourage the logistics industry to support us on this task.

Standardization of logistics processes

A. Backhaus: Coming from more standardized processes, the chemical industry is getting more differentiated in products and services - as many other industries are. Nevertheless, the pressure on efficiency and costs for supply chain and logistics is increasing. For commodities, lean and standardized logistics processes are imperative and will gain even more importance. For the more downstream-oriented businesses, specific solutions are a service differentiator. Here the creativity and flexibility of our service providers will be a key for future success.