value chain collaboration in 2010 – perspectives from the ...value chain collaboration in 2010 –...
TRANSCRIPT
Value Chain Collaboration in 2010 –Perspectives from the Field
Presented by:
Brad KramerField Market Development Manager, Performance FilmsNOVA Chemicals
Value Chain Collaboration in 2010 Value Chain Collaboration in 2010 ––Perspectives from the Field Perspectives from the Field by Brad Kramerby Brad Kramer
The playing field in packaging material development and sourcing has changed. Drawing on over 20 years of work experience at suppliers, resin converters, and a brand owner; the topics will include: What are brand owners looking for to address their packaging needs and how has this shifted? How to create win-win-win scenarios in shared value innovations or material cost reductions? And how to prevent pitfalls in value chain collaboration and achieve buy-in from all parties?
Based on my experience at 3 levels of the packaging supply chain(supplier/converter/brand owner) I plan to discuss my view of what brand owners are looking for to address their packaging needs and how has this shifted? I will share my thoughts on how to create win-win-win scenarios in shared value innovations or material cost reductions? And how to prevent pitfalls in value chain collaboration and achieve buy-in from all parties?
Value Chain Collaboration in 2010 Value Chain Collaboration in 2010 ––Perspectives from the FieldPerspectives from the Field
BackgroundCollaboration and Value Chain Collaboration OverviewRole of Packaging and Other TrendsOld Paradigm - Historical Perspective & ModelNew Value Chain Collaboration Model
Packaging NeedsConsiderations for Sustainability and System SolutionsThings Important to….Potential Hurdles, Pitfalls, and ObstaclesOpen Innovation Resources
Now What? Value Chain Opportunities and Ideas
NOVA Chemicals Creates Value NOVA Chemicals Creates Value by Understanding the Value Chainby Understanding the Value Chain
Advanced SCLAIRTECHTM
Process Technology
Polyethylene Product Versatility
Products That Create Value
ENABLES
DELIVERS
If you need help, ask.If you need help, ask.What Your Employees Know About Green Innovation That You Don't
By Marc Stoiber – 3/8/2010http://greenbiz.com/blog/2010/03/08/what-your-employees-know-about-green-innovation-you-dontWhile working on a global launch of a green household product, I had the opportunity to speak to the project chemist about the product's truly revolutionary ingredients.
"It’s incredible that you could come up stuff like this -- it’s so much less harmful for the planet, and works as well as the old stuff. How long did it take to develop it?’"I asked.
He answered nonchalantly "Oh, we’ve actually had this stuff for years. It’s nothing new."
"So why didn’t you introduce it years ago?" I asked.
With a shrug of his shoulders, he said "Because nobody asked us."
A simple statement; but pure gold to any business leader looking for green innovation and employee motivation.
Engagement is the mot du jour today. It's being pitched as a new religion, buoyed by the social media wave; however, behind all the hype is a remarkably simple concept: If you need help, ask.
Benefits of CollaborationBenefits of CollaborationCollaboration focuses on joint planning, coordination, and process integration between suppliers, customers, and other partners in a supply chain. Its competitive benefits include cost reductions and increased return on assets, and increased reliability and responsiveness to market needs. The benefits of collaborative approaches include process, inventory, and product cost reductions as well as increased cycle times, service levels, and market intelligence. Collaborative Business Processes
The extended enterprise denotes a company that collaborates with its suppliers, partners, and customers to streamline business processes, transcending traditional boundaries and enhancing mutual customer benefits. Thus, an extended enterprise involves several collaborative business processes…..
Collaborative Project ManagementCollaborative project management entails working together over organizational boundaries and sharing information through the Internet in all types of project-like work, making it possible to get right to market as well as reduce project and product costs.
What is Value Chain CollaborationWhat is Value Chain Collaboration
Value ChainCreating ValueDetermining Value and Value PropositionSharing Value
Five Things Every Business Needs to Know Five Things Every Business Needs to Know About Packaging*About Packaging*
1. You can’t have a product without a package.2. The package could cost more than what is
inside.3. Your package has to sell the product not just
protect it.4. Most packaging materials suppliers require
large quantity orders.5. Packaging trends and innovations can
influence whether your product will ever get onto the store’s shelf.
*Joann Hines – Packaging Diva – Dec. 8, 2009
Most Frequently Tried New Products in Most Frequently Tried New Products in 2010*2010*
In-Store Merchandising Drives Most New Product TrialsCoffee Products Tried More Frequently Than AnyBrand Extensions Create Multiple Opportunities for New Trial in SnacksBeverages have Most Brand Name Recognition among CategoriesHealth and Wellness is Winning New Converts in CerealTrial Purchases of Cleaning Products Dominated by Iconic Brands*Consumer Goods Technology – Market Force
12 Things Retailers Did Last Year to Improve 12 Things Retailers Did Last Year to Improve Supply Chain*Supply Chain*
1. Enhance collaboration opportunities with business process changesStore friendly shipments - store department or zone level shipments – many retailers are making an effort to pack shipments to enable the most efficient in-store unloading processes, where much effort can be wasted moving around big footprint stores.
2. Reduce empty miles – Many retailers are working with suppliers, 3PL partners and internal logistics to leverage SmartWay transportation standards and to develop retail – supplier - third-party partnerships to reduce empty miles with continuous moves. In 2009, retailer's honored by the EPA for excellence in this area included Best Buy, JCPenney, Kohl's Department Stores, Limited Brands, Inc., Lowe's, and The Home Depot.. 7. Reduce carbon footprint and transportation costs at the same time – Retailers cited the use of transportation applications to redefine optimal routes, loads, shipment frequency, and to identify backhaul opportunities. They also accomplished consolidating and cubing loads better to make the best use of trucks.8. Make money from refuse - Recycling more and managing the waste stream better has been cited by many retailers as an easy to implement practical process that can result in a new or more significant revenue stream.11. Source more efficiently – Walmart announced a reorganization of private label sourcing, eliminating 5-15% of sourcing related costs by sourcing 80% of product directly, rather than through a 3rd party procurement organization. Walmart has also been making investments in retail PLM and sourcing applications in the past couple of yr ears that will certainly go to good use given this announcement. *IDC Insights – Leslie Hand (idc.com)
Overall Packaging Overall Packaging –– Brand Owner TrendsBrand Owner Trends
M&A Activity ContinuesPackaging Materials Innovation will Continue to Embrace New Practices
Challenges3rd Party ServicesConsultantsIdea WebsitesCommunication with Consumers
Overall Packaging Overall Packaging –––– Value Chain Trends Value Chain Trends
Sustainability5 SensesMicrowavingLow Cost Country SourcingEnd-to-End ThinkingUse of New Collaboration Models
How to better connect-the-dots
Old ParadigmOld Paradigm
How Do We Innovate Today“Over the Wall”, Continuous Improvement ProtectionistAdvantages
Continuous Improvement Year-over-YearSet Cost Savings
DisadvantagesLittle Breakthrough
Old Package Development and Innovation Old Package Development and Innovation ModelModel
Old Package Development and Innovation Old Package Development and Innovation ModelModel
IS IT TIME FOR A NEW MODEL??
Define Internal Needs First Define Internal Needs First Best Practices (Who? What?)Best Practices (Who? What?)
Clearly Defined GoalsCommunication - Clearly Defined AttributesResourcesIP NeedsTransparent Language and Units (ie. msi)Timeline – Next Generation
Collaboration TeamCross Functional
Technical, Sales, Marketing, ProcurementProduct Scientists, Academia, Design FirmsOthers
Elements of Packaging Innovation and Value Elements of Packaging Innovation and Value Chain CollaborationChain Collaboration
What is the Function of the Package?What Problem or Issue is Being Solved??Clearly Defined Benefit
Any Potential Trade-OffsConnecting-the-Dots
System SolutionSuppliers are PartnersSustainability Benefit
Finding Idea Advocates or Champions
Is the SolutionIs the Solution……..
Able to Solve a Problem, Wish, DesireAnd Still Maintain the Package’s Function
Platform-able to other Formats & Products“Robust”
Transformational, Disruptive, or BreakthroughAffordable
Is Your Package a Sustainable PackageIs Your Package a Sustainable Package
Optimized Package Weight / VolumeReduction of Waste to Landfill
Reduce, Reuse, Recycle, (Degrade)
Lower Package Material Footprint (Resources)Reduction of Food Waste or ContaminationCommunicating Product & Brand
Sustainability in PackagingSustainability in Packaging
Understand Customer (or Customer’s Customer) NeedsLCA LanguageDowngauging Reduces GHG EmissionsMaterial Substitution (along with downgauging), may also save moneyUS EPA and NREL ConversionsS&P companies reporting on sustainability jumps by more than 33%, report shows
Despite 2009’s dismal economy, nearly all S&P 100 companies have begun to provide sustainability information, with many offering performance data, to the public.
Package Development ProcessPackage Development Process
Research / Reading / Idea GenerationAdditional Scope for TechnologiesInitial Proof of PrinciplesProject PlanProject ExecutionSolution (Yes/No)?
New Value Chain Collaboration ModelNew Value Chain Collaboration Model
Shared Value Shared Value CreationCreation
Things Important to a SupplierThings Important to a Supplier
Operational PerformanceVolume Minimums for ProductionLong Term CustomersROI and Value Proposition of Technology or Development
Payback of Technology Investment
Development/Qualification Times
Things Important to an Extruder/ConverterThings Important to an Extruder/Converter
Raw MaterialsRaw Material Lead TimesSilos and Storage Space (# of Materials)
# of Layers – Coex, Blends, etc.Operational Performance (Run Rates)Replacement of Optimized Capacities
Downgauging lowers plant outputs
Development/Qualification Times
Things Important to an Brand OwnerThings Important to an Brand Owner
Operational Performance (Run Rates)Multiple versions and ages of filling lines
Development/Qualification TimeShelf Life Studies (ASL and Standard SL)Organoleptics
Supply Chain SynergiesBrand Owner Alignment with Converter, who are Aligned with Suppliers
Simplicity and Transparency
Things Important to a RetailerThings Important to a Retailer
Shelf Space & SalesSKU ReductionSustainabilitySecondary Packaging Systems
Brand Owner / Retailer NeedsBrand Owner / Retailer NeedsHow to articulate needs into ideas?How to articulate needs into ideas?
Is it BIG enough? Does it Solve a Problem?Connect-the-dotsSupplier Base?
Existing, New, etc.
FDA, Compliance, and Requalification TimeLegal/IPSustainability
Open Innovation Sources Open Innovation Sources Along the Value ChainAlong the Value Chain
Brand Owner Open Innovation and Idea Submission WebsitesDesign FirmsAcademic Alliances3rd Party Innovation ChallengesSupplier ChallengesRepatriate from Different GeographyRepatriate from Different CategoryOthers?
Summary: Value Chain OpportunitiesSummary: Value Chain OpportunitiesDo Less With More
Less Materials, Less Processing Steps, CoatingsSingle Material Solutions – Less ComplexitySystem Solutions and Understanding of Full Product/Package ChannelEnabling TechnologiesMulti-Sensory EnhancementMessaging for Sustainability
“Greenwashing” MinimizationCommunicating through the Chain to the ConsumerOwnership at All LevelsWaste-to-Energy Options
Connecting the DotsMore TransparencyPerformance-Based SpecificationsNegative Attributes and Discoveries Noticed Along the Development Path
Addressing HurdlesAddressing Hurdles
Be Open and PoliteEnsure Common and Group Needs are MetAsk Questions
Examples of IdeasExamples of IdeasAdditives that Enhance or Enable Product Performance
Nanotechnology, etc.
Processing Technology ImprovementsMicrolayer, Nanolayer
Post-Processing Technology EnhancementsOrientation
Filling/Packaging Technology EnhancementsSynergistic Effects of More than One Idea
If you need help, ask.If you need help, ask.
Engagement is the mot du jour today. It's being pitched as a new religion, buoyed by the social media wave; however, behind all the hype is a remarkably simple concept: If you need help, ask.
Please remember to turn in your evaluation sheet...
Thank you
PRESENTED BY
Brad KramerField Market Development Manager, Performance FilmsNOVA [email protected]