the importance of independent toll & contract manufacturing · track record of working under...
TRANSCRIPT
The importance of independent
toll & contract manufacturing
Topics
● Introduction VLS-Group
● Definition: Tolling & Contract manufacturing Blending & chemical reaction
● Blending and Tolling Market Segments
● The need for independent toll manufacturing
● Important considerations for choosing a Toller
● Understanding & managing your supply chain strategy is key
● Challenges and Trends
Introduction VLS-Group
European Leader in Chemical Logistics
● Independent toll & contract manufacturing
● Blending & chemical reaction
● Packaging small units (1l to 5l)
● Drumming & filling (20/60/200/1000 liter drums & IBC)
● Bagging Dry Bulk
● Tank storage
● Chemical warehousing
● Supply chain management
● Transport & logistics
● VLS-Group is a leading European provider of innovative, integrated logistics
and value-adding services for the chemical industry.
● VLS-Group offers a state-of-the-art European network of >220,000 m2
warehouses, >100,000 m3 tank terminal capacity, 22 high performance
filling lines, 9 chemical reactors as well as blending and tolling.
● VLS-Group creates value throughout the entire supply chain of its
customers by offering a wide range of sophisticated international logistics
and transport services and solutions.
Toll manufacturing vs Contract manufacturing
Definition
= an arrangement where an independent Toller with
specialised equipment processes raw materials,
provided by Customer, into intermediate or finished
products at an all-in tolling fee. No product ownership
= the same arrangement as tolling but in this case the toller
takes care of the sourcing of the raw materials.
Temporary product ownership till moment of shipment
Blending and Chemical reaction – Definition
Market Segments
● Petrochemical products : lubes –
additives - greases -coolants
● Specialty chemical products (Agro)
● Fine chemicals - (Nanotechnology)
● Medical products (Pharma grades)
● Food (Foodgrade products)
The need for independent Toll manufacturing (1)
● Availability
– Most big producers do not produce for others
– Location of the producer is not always ideal for the finished products
● Cost– No fixed payroll cost, and not same payroll classification
– Low capital expense, infrastructure costs shared with others
– Cash flow management
The need for independent Toll manufacturing (2)
● Flexibility
– An independent toller can produce a single batch ,a trial run or continuous production
– Less complexity for the producer (take complexity out of the system)
– Gain precious time for meeting market needs
This flexibility is especially important for : – products for which it is difficult of forecast demand – seasonal products– trial batches in the pre-stage of launching a new product to the
market– products that have a high complexity & costs.
10 Important considerations for choosing a Toller
1. Track record of working under NDA/SA and IP protection
2. General impression, confidence, reputation
3. Equipment (type, maintenance, housekeeping) and capacity
4. Pilot blending capabilities, Lab facilities
5. Integrated supply chain concept : raw materials storage, production,
packaging, finished goods storage, transportation, waste management
6. Track Record SSHEQ / REACH
7. No ownership of products and no own production / PL
8. Experience / References in your product range
9. Financial stability, capability to further invest
10. Location Location Location
Challenges: changing technologies
f.ex Base Oils switch from Gr I to II/III
Customer introduction or
modification of product
● New formulation
● Processing
● Supply chain
● Testing
● Label change
● Tankstorage
● Disposals
Internal Impact
● Ssheq approval
● Adaptation of product formulation in system
● Trial batch, waiting on approval , delay in
process continuation
● New supplier / new flow /
leadtimes/production planning
● Inform lab/ surveyor on site● Prepare new label for approval, adapt label
system
● Additional tankstorage needed for Base Oil
new group and/or finished product
● What to do with previous raw materials
finished products
Understanding your supply chain strategy is key
to identify opportunities for improvement and...
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Business
Strategy
Supply Chain
Strategy
Supply Chain
Network
Supply Chain
Process
Supply Chain
Resources
DrivesDrives
DrivesDrives
DrivesDrives
DrivesDrives
Feedback
Feedback
Feedback
Feedback
Segment client business into Supply Chains and determine SC
performance by:
• Strategic Supply Chain Workshop based on The M4SC®
framework and SCOR® methodology, to ensure strategic
alignment
Optimize network based on strategic
preformance requirements through:
• Network Design & Optimization
• Transportation Design & Optimization
Manage processes towards strategic network
goals through:
• Inventory Optimization
• Packaging Design & Optimization
• Supply Chain Risk Assessment
Continious align resources to meet process goals
Can you identify a red flag in your supply
chains?
Challenges and Trends (1)
● Industry Challenges
– High investments up front
– High number of preliminary requests
– High complexity
– Increasing demand for late
customization solutions
– Higher administration efforts to manage
the same throughput of products
– Changing technologies (e.g. Bio diesel)
– Changing regulations (Reach / SSHEQ)
– Long lead times for permit changes
– Hard to secure long term commitments
from customers
Challenges and Trends (2)
● Trends
– Outsourcing is growing and expected to
grow even further
– Integrated concepts : full logistics and
supply chain package
Contact us
For inquiries about our independent toll and/or contract manufacturing services
please get in touch with :
0032 495 533 756