Chemical suppliers streamline SC data exchange using Integration-as-a-Service platform

The chemical industry championed an innovative approach to supply chain management (SCM) in 2000 when 22 global chemical companies pooled resources to create Elemica . An independent entity, Elemica was launched to deliver solutions for spanning the complete order-to-cash cycle.

It’s not surprising that the chemical industry would be prime mover in this regard.

“Chemicals are the backbone of manufacturing,” says Bill Polk, a director with Boston-based AMR Research , asserting that chemical suppliers are near universally found in industrial supply chains of every stripe.

It made sense that the industry collaborate on one of the thorniest issues in SCM: automating the multi-threaded, many-to-many communication linkages necessary to successfully service orders at the lowest-possible cost in the shortest amount of time. Elemica today links more than 1,500 companies, moving $50 billion+ in goods annually via its hosted hub-and-spoke integration platform.

The platform handles automated translation and processing of orders, shipments, and inquiries through a secure, interoperable data exchange. Global chemicals giant BASF , an Elemica founder, processed the first order through the platform in 2000.

“Elemica is about completing supply chain transactions efficiently,” says Tom Warner, BASF manager of systems integration, responsible for e-commerce in North America. “It keeps costs of external communications down by handling all of our outside connections. It converts different protocols into standards that enable us to see information in the manner we expect. Rather than interfacing with a couple hundred customers and suppliers, we only have to connect once. All I have to worry about is security and data standards from our connection to Elemica.”

Elemica provides the integration platform—what it calls Integration-as-a-Service (IaaS)—including a set of hosted applications for order management, customer replenishment, and logistics in the Elemica Business Process Network (BPN). The network links disparate enterprise systems, processes, and companies to enable collaborative information flow.

“Elemica is the middleman that sits between all of us, ensuring we’re all doing the correct thing in the electronic playground,” Warner says. “It addresses integration and enables responsiveness, which is where you get the full benefit of Elemica.”

The platform enables deep integration between ERP systems, and “touch-free” transmission of forecasts and purchase orders from one partner’s system into the back-end system of another. “When a customer’s MRP system runs, it creates demand for product coming directly into BASF’s SAP system,” Warner says. “The goal is for orders to come in hands-free.”

BASF began implementation of the logistics/transportation management component for its North American operations at the end of 2007.

“We’ve already established with our customers that we’ll send product in certain quantities on certain dates,” explains Warner. “Logistics focuses on working with carriers to get the product from our place to theirs as promised. Carriers get visibility into this so they can better manage internal resources and reap efficiencies. The customer has visibility as to when the shipment will arrive. Improving turnaround time and customer satisfaction are key goals. Our attitude at BASF is, if our customers win, we win too.”

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