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SUPPLY CHAIN

A continued focus on operational excellence and commitment to digital transformation helped deliver another year of strong performance for SABIC Global Supply Chain (GSC).

2019 produced another set of impressive performance figures: around 32 million tons of product delivered to almost 11,500 customers in over 140 countries; more than 18,000 stock keeping units flowing through around 200 distribution centers; and around 500 logistics service providers around the world helping process almost half a million outbound deliveries.

STRATEGIC GOVERNANCE

2019 saw implementation of the Global Supply Chain Excellence Framework. The Framework consists of nine elements covering all aspects of the supply chain, from strategic governance to EHSS, from operational excellence to customer experience.

Digitalization is a key element, with initiatives aiming to exploit the full potential of the blockchain, robotic process automation and enhanced customer connectivity currently being implemented, assessed, fine-tuned and rolled out throughout all GSC functions and regions.

CUSTOMER EXPERIENCE

SABIC GSC is always striving to enhance the customer experience by expanding our scope to address our customers’ reach globally, embracing emerging technologies, and enriching our engagement with partners. Highlights from the last 12 months include:

  • Trade solution award - SABIC Solids Supply Chain in MEAF beat 243 nominees from all over the world to win the coveted 2019 Adam Smith award for best trade solution, demonstrating best practice, innovation, collaboration, creativity, teamwork and determination. The winning solution, shipping documents to banks electronically, cut lead-times by up to 40%, as well as saving costs throughout the value chain.
  • Direct delivery to Vietnam - SABIC Liquid Supply Chain overcame major infrastructural challenges to make the first direct methanol deliveries from Saudi Arabia to Godau, Vietnam.
  • Enhanced liquid end-to-end supply chain - SABIC expanded its end-to-end supply chain services to customers in China, increasing customer intimacy, on-time delivery, and competitiveness in the Chinese market.
  • E-commerce - SABIC Supply Chain in Europe continues to enrich SABIC’s e-commerce platform, enabling automatic, timely delivery of information, improving both customer service and our own internal efficiency.

SUSTAINABLE SUPPLY CHAIN

Sustainable Supply Chain is one of our key focus areas to help drive the conservation of natural resources and reduce carbon emissions. Supply chain digitization is creating further visibility in our performance that has led to a number of newly launched projects this year improving our sustainability performance. They include:

  • E-vehicles - GSC this year began trialing electrical delivery vehicles with one of its China affiliates, with raw materials delivered from the manufacturer to the on-site warehouse at the SABIC joint venture plant. GSC anticipates ever-increasing use of e-vehicles over the next 5–10 years, and has assigned them a key role in its long-term land transportation strategy.
  • Environmentally friendly shipping - GSC is working with shipping lines to explore the potential of alternative fuels, with a view to minimizing the cost impact of compliance with the new, more demanding 2020 International Maritime Organization regulations.
  • Go-Green project - as part of an ongoing America polymers import optimization project in the US, GSC ceased printing in favor of electronic transmission for key documents such as Certificate of Origin.

PLANNING CAPABILITY

As part of the new Framework, GSC launched a new advanced modeling and optimization application at one of our Yanbu affiliates in Saudi Arabia. Related initiatives are in progress at various other affiliates. Such initiatives bring together GSC and the affiliates to help maximize integrated margins by optimizing factors such as feed usages, production rates, cracker-operating conditions, product allocations and throughput rates.

Value chain planning helps GSC adapt to a complex and constantly changing environment, optimizing the entire value chain to continually improve cost efficiency, service delivery and ultimately profitability.

NETWORK MODELING

GSC is steadily enhancing its network management capability, implementing a range of network-modeling tools to optimize its vast global distribution network, with modeling competencies developed in-house helping ensure continuity. Modeling assesses the efficiency of over 150 locations and 20,000 routes worldwide, and aids continual improvement of SABIC’s supply chain models, helping improve service to customers, prepare for growth, optimize working capital, cut cost out of the supply chain and enhance sustainability.

Network modeling is set to transform the entire global supply chain; early benefits are particularly notable in:

  • Middle East/Africa - where the SABIC team is working with Saudi Rail company to investigate the potential for greater use of rail to transport SABIC goods, to help streamline container collection, reduce road transport, and improve customer service while reducing environmental impact. Recent improvements at Jubail’s Petrochemicals Quay 2 are helping improve (peak period) loading efficiency and delivery reliability to customers served through SABIC’s Number 1 global export gateway.
  • Europe - where greater use of our Rotterdam hub, The Netherlands, is improving the service provided to customers for materials coming from Cartagena, Spain, helping reduce lead-times and operating cost, and cutting road use by 60%, delivering significant sustainability benefits.
  • America - where enhancements to finished goods warehouses have improved customer service without adversely impacting cost, and reduced overall transport mileage by 55%.

LOOKING AHEAD

GSC will continue enabling growth for SABIC Business Units while delivering enhanced and differentiated services to our customers. Through digital integration and collaboration, GSC will proactively exploit disruptive technologies, respond swiftly and effectively to supply chain network challenges, and seize on emerging opportunities.

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