The robust supply chain can enable companies to outperform their competitors by obtaining their products faster, safer, and lower costs in a highly competitive business world. BASF, a global chemical company, emphasizes several aspects as critical drivers of their successful supply chain. Namely, they stress the importance of digitization, business analytics, synchronization, and the team as the core of their strong supply chain.
Digitization is the primary aspect of the company’s robust supply chain. Digital technologies enable BASF to create more innovative, reliable, transparent, and sustainable supply chains (BASF Corporation [BASF], 2017). The systematic exchange of data with customers, suppliers, and partners allows the company to transparentize the whole supply chain. Thus, digitization creates a competitive advantage because trust is a critical aspect of the business, and customers might abandon the company if they are not confident about its reliability.
Moreover, digitization can help capitalize on the immense amount of data derived from a highly integrated and complex supply chain. For instance, electricity is one of the primary resources that any company bases its operations on. However, the electricity supply is complicated since the market prices frequently fluctuate (Banker, 2018). BASF employed a computer program to help buy and sell electricity at the best possible times (Banker, 2018). Namely, their predictive tool considers various factors, including how much electricity was needed previously, the time of the year, the weather, and economic conditions (Banker, 2018). Along with such predictive tools, the use of augmented reality and intelligent manufacturing initiatives help BASF generate more significant savings than its competitors, placing them at the top of others.
On an approximate note, the BASF emphasizes the role of business analytics in their successful supply chain management. Namely, they stipulate that analyzing business performance with up-to-date analytical tools allows precise forecasts and better and faster decisions (BASF, 2017). This factor is significant in producing a competitive advantage over competitors because making the wrong decisions might have destructive consequences. Thus, business analytics is another crucial aspect that posits the BASF supply chain at the top of others.
Synchronization is another critical characteristic of BFAS that saves an immense amount of economic, human, and environmental costs. The video emphasizes how using rail instead of road reduces CO2 emissions and how interconnected production plants save energy (BASF, 2017). Specifically, as the by-product of one plant can be used as material for another, less energy is consumed for the chemical process. BASF stipulates that such a concept saves them over one billion euros annually (Banker, 2018). Hence, a method to synchronize and automate as much as possible allows BASF to conserve resources and lower emissions, once again winning over competitors who have to bear the logistic, environmental and economic costs.
Finally, the people or a team is another aspect that BASF emphasizes as the core drivers of its supply chain. They employ the best team with substantial experience and innovative thinking to produce the highest quality outcome (BASF, 2017). Every individual, from drivers to managers, can have a significant impact on the course of the business. Thus, having a team of qualified individuals who will not neglect their responsibilities and commit irreversible wrong decisions can influence its success over others.
To conclude, digitization helps BASF position itself at the top of its competitors by ensuring transparency of the supply chain process to its customers. Moreover, by employing digital technologies to capitalize on the data and make the most accurate predictions, BASF strives to save on production and logistics costs that its competitors have to endure. While business analytics enables BASF to make better and faster decisions than its competitors, the synchronization optimizes production operations and generates billions of savings each year. All these aspects are managed and implemented by people with better qualifications and ideas than other companies.
References
Banker, S. (2018). One of the world’s most innovative supply chains. Forbes. Web.
BASF Corporation. (2017). BASF’s smart supply chain (EN) [Video]. YouTube. Web.