## Supply Network Mastery : The Dow Chemicals Co. (D&MSC)

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## Global supply chain optimization initiative saved the company $5 million in 2009-2010 With so many variables, supply chain optimization presents a formidable challenge. No company knows that better than The Dow Chemical Co. In 2006, Dow created what it calls Design and Modify Supply Chain (D&MSC) Work Processes to bring order and e fficiency to existing and new supply chains by providing methodologies that can be applied across the company. The D&MSC Work Processes saved Dow$5 million during 2009-2010. In addition, greenhouse gas (GHG) emissions have been reduced, and serviceability has improved.

D&MSC Work Processes support plant and facilities projects and network optimization projects, as well as feasibility studies. There’s even a standard methodology for conducting due diligence evaluations prior to joint ventures, mergers, and acquisitions, and for integrating operations afterward.

Supported by the iThink Simulation Software Package, IBM’s LogicNet Plus supply chain network optimization and supply chain design software, and Arena simulation software, Dow’s Network Optimization Work Processes enable continuous improvement of existing supply chains. The Plant/Facility, Feasibility, and M&A Work Processes make it possible to establish new supply chains.

The D&MSC Work Processes link Dow’s supply chains to its overall business objectives. Teams are located globally and have the ability to work not only within their respective regions, but across other regions as well.

One Pacific-area team used a Network Optimization Work Process to evaluate tank usage. Optimizing tank usage for multiple products cut costs, improved service levels, and reduced GHG emissions; the latter has become a key performance metric in the Network Optimization Work Process. Each network project looks not only at cost and customer service, but also provides key carbon footprint data to reveal opportunities for GHG reduction.

After the April 2009 acquisition of Rohm and Haas, D&MSC Work Processes helped teams capitalize on synergy opportunities and optimize the company’s Europe warehouse network. The evaluation identified savings through consolidation of shipments to warehouses and reductions in freight and warehousing costs.

“We are honored to be recognized for implementing a global work process that is optimizing supply chain networks across Dow and proving its value in every region,” said Kevin Hunter, supply chain design leader. “In 2009-2010 alone, D&MSC solutions have enabled Dow to realize millions of dollars in cost savings globally, while also improving customer service and sustainability—all of which are critical to competitive advantage.”