Improving Your Supply Ability Through the Eyes of Your Customers By Theo Zwygers LogiChem 2011 will be the event's tenth anniversary and an opportunity for the most senior chemical supply chain & global logistics directors from the European chemicals community to come together once again share experiences, make new contacts and benchmark the latest chemical supply chain initiatives. Not only will LogiChem 2011 be a chance for the chemical industry to reminisce about the last ten years but an opportunity to shape the next decade. To celebrate a decade of LogiChem, there will be an exciting three day programme filled with networking opportunities in our new location, Antwerp.

1. Improving Your Supply Ability Through
the Eyes of Your Customers
Theo Zwygers
Vice President, EAI Supply Chain
Lyondellbasell Industries B.V.
LogiChem 2010
Dusseldorf, Germany

2. Industry-wide Reduction in Stocks creating Pressure
on Supply Chain Performance
Polymers Industry Stock Development Index View
(Jan. 2008 = 100%)
120%
100%
80%
60%
40%
20%
0%
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3. The New Environment
• Approximately 25-30% lower inventories held by polymer
producers
– Lower working capital targets, further rationalized product portfolio
– Faster cycling on the plant, more demanding operational management
– Balancing long supply chain imports with local production efficiencies
– A changed business model
• Converters and end-users hold reduced inventories
– End-use markets in disarray, future demands reduced and unclear
– Financial strain, planning and product demands passed down the chain
– Economic recovery very likely slow, but in many cases erratic
It is becoming harder to differentiate.
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4. Differentiation From Competitors in Commodity Markets
• Our concerns:
– Customer loyalty during downturn
– Consolidation of price position
• Broad goals
– Improved image of LyondellBasell with customers
– Volume loyalty and/or better price
– Minimizing loss of sales opportunities
– Cost leadership - including WC
– Market position
Success will be determined by how well we operate our supply chain.
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5. Strong Deviation Between our Self-assessment and
Voice of the Customer
• Own monitoring of delivery • Delivery of performance through
performance the eyes of our customers
– Own metrics confirm excellent – Deteriorating performance since
delivery performance 2003 based on PTAI survey
– Close to 100% reliability based – Average or sub-standard
on ECTA-coding performance in delivery reliability
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6. Driving Supply Chain Performance Through
Customer-centric Approach to Logistics
Quantify customer supply reliability requirements
Identify internal causes and root causes of the failure to deliver
to key customers in quantities and time
Reduce gap between Requested Delivery Date (RDD) and
initially Confirmed Delivery Date (CDD)
Identify improvements in planning, stock and production
management
Reduce delays between initial Confirmed Delivery Date and
Actual Delivery Date (ADD)
Root-cause analysis
Establish a control dashboard and drive improvements
Structured improvements are possible with measurement.
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7. Analysis of All Parts of Supply Chain Process
Working Working
Process Customer Customer Process Customer
Capital & Capital &
efficiency excellence excellence efficiency excellence
Sales Sales
Order Organize Delivery
Forecast MRP- Sales Order
Confir- Transport to
System Plan Intake mation & Shipping Customer
Ensure product is available
Ensure on-time delivery
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8. Teams Nominated Along Entire Supply Chain
Unavailability and Rush Orders Root Causes
Order Organize Delivery
MRP- Sales Order
Forecast Confir- Transport to
System Plan Intake
mation & Shipping Customer
Improve Process Clarification
Forecast Review of MRP-tool Lead Time and Transit Time
Transport Capacity
Groups were nominated
to address specific Measurement and KPI
areas Information to Customer
Customer Priority
Distribution platforms
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9. Example: Mismatch Between Customer View and
Own Perceptions
• Different internal KPIs and some inconsistencies discovered:
– Ability to confirm Requested Date to the customer
– Ability to deliver on time
• Based on Haulier Feedback and ECTA Codes
• This monitors haulier performance, not our performance vs. the customer
• Contrary to expectations, the link between both KPIs was actually
not as strong as required. Some inconsistencies include:
– A significant number of delivery dates are changed upon customer
request during the process, which is not reflected in the system
– Orders which were not confirmed upon customer requested date
were organized by shipping office for the requested delivery date
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10. Define Relevant Data for KPI Measurements
Delivery Performance vs Customer Requested Delivery Date
Ability to confirm Requested Date PO
100%
Requested Confirmed
95%
DD DD
90% Gap to
100%
- Availability 85%
- Allocation 80%
- Credit 75%
- SAP Lead and Transit Times 70%
During planning process: 65%
Initial Planning: - Customer Request 60%
01 07 02 07 03 07 04 07 05 07 06 07 07 07 08 07 09 07 10 07 11 07 12 07 01 08 02 08 03 08 04 08 05 08
- Meet Customer RDD - Haulier Request
- LyondellBasell Issue
Haulier Performance
Delivery Reliability vs. Confirmed Delivery Date
100%
98% - Haulier Issue Close to
- Force Majeure 100%
96%
Transport Planning Actual 94%
Delivery
92%
- Haulier Issues - Customer Not
- Force Majeure 90%
- internal covered
- Customer Requests/Issues 88%
- LyondellBasell Requests/Issues 86%
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11. New Measure: Supply Chain Performance From the
Perspective of Our Customers
Haulier and Force Majeure
LyondellBasell Reason
Customer Reason
On time according to Transport Order
Haulier & FM
LBI
Delivered as promised Customer
Non-ability to confirm the RDD, but delivered on Confirmed Delivery Date. According to Transport Order
Delivered as promised
Second Chance
2nd Chance Delivery Perfect Delivery
Non-ability to confirm the Requested Delivery Date, but delivered on RDD.
Perfect Delivery
Ability to confirm and deliver to the Customer on Requested Delivery Date (RDD)
2008/1 2008/2 2008/3 2008/4 2008/5 2008/6 2008/7 2008/8 2008/9 2008/10 2008/11 2008/12 2008
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12. Customer Excellence Improvements
• Customer view and
LyondellBasell KPIs
aligned
• Improved communication of
delivery date to customers
• More orders confirmed up
front on requested date
• Increased level of product
availability
• Updated lead time table
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13. Process Efficiency Improvements
• Ensured more orders confirmed on customer requested date at
order entry
– No rework of the confirmed date by shipping office
• Increased opportunity to select the optimal (lowest cost)
transportation (intermodal or best haulier)
• Improved transparency of planned delivery date for CSR
(less communication issues)
• Reduced rush orders
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14. Working Capital and New Sales Opportunities
Improvements
• Reduced lead time means less
product frozen - reduction of
Working Capital (Initial impact:
several KT)
• Reduced lead time means
increased potential to grasp a
sales opportunity for customers
short in material
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15. Sustaining Customer Service Levels Despite
Reduced Inventory and Production Capacity
100,0% 45
+ 3,5%-points
90,0%
40
80,0%
- 30% 35
+ 2,0%-points
70,0%
30
and (D )
oH
eliability
60,0%
25
elivery R
ays on H
50,0%
20
40,0%
D
D
15
30,0%
10
20,0%
5
10,0%
0,0% 0
2008 Jan 09 Feb 09 Mrz 09 Apr 09 Mai 09 Jun 09 Jul 09 Aug 09 Sep 09 Okt 09 Nov 09 Dez 09 2009
Stocks/DOH Perfect delivery Delivery as planned
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16. Thank you for your attention

17. Disclaimer
All information (“Information”) contained herein is provided without compensation and is intended to be general in
nature. You should not rely on it in making any decision. LyondellBasell accepts no responsibility for results obtained by
the application of this Information, and disclaims liability for all damages, including without limitation, direct, indirect,
incidental, consequential, special, exemplary or punitive damages, alleged to have been caused by or in connection with
the use of this Information. LyondellBasell disclaims all warranties, including, but not limited to, the implied warranties of
merchantability and fitness for a particular purpose, that might arise in connection with this information.