Sabic - Products and Services - Case Study Example

Name Instructor Subject Date Table of contents Introduction………………………………………………………………….. 3 Background………………………………………………………………….. 3 Products and services………………………………………………………… 4 Sabic’s vendors/ suppliers…………………………………………………… 5 Supplier portal……………………………………………………………….. 5 Suppliers’ performance………………………………………………………. 6 Purchase order……………………………………………………………….. 6 Request of quotation…………………………………………………………. 7 Invoices…………………………………………………………………… 7 The business process………………………………………………………….. 8 Conclusion……………………………………………………………………... 9 Introduction Like all the multinational companies in manufacturing, Sabic is involved has numerous functions all over the globe. The company boosts of being in about forty nations and a workforce of about forty thousand, this shows that Sabic has is involved in functional units that require not only technology but also manpower to run. This is what has enabled the company to be a market leader and sustain its growth, the company has ensured that their put the customers’ needs first and this is what has enabled them be differentiated from the other companies in this industry. Some other qualities of Sabic include; a passion for collaborative working, a legacy of creating innovative applications, depth and scale of activities and ingenuity in the company’s lifeblood. Sabic Background Sabic was founded in 1976 through a royal decree by the Saudi Arabian government, the government then went ahead to own seventy percent of the shares in the company. The company operations involve the making of plastics and thermo chemicals to suit global customer needs. The firm is structured under several foundations that ensure the company maintains ethical relations with both its customers and its employees (Sabic, 2014). These include; leadership – the wide variety in terms of employees’ knowledge and skills enable the company to be a market leader and sustain its growth. Integrity – the company has ensured it is free from corruption at all the levels of its operations. Sustainability – Sabic has over the years engaged in economic activities that encourage environmental and business sustainability. Quality standards- Sabic’s commitment to the production of quality products that meet customers satisfaction has been undeterred since the establishment of the company, this is what has gained the company the large market share in thermoplastics. A global presence – with its presence in forty nations, Sabic can be termed as having a solid global presence. Products and services The executive management of Sabic realizes that for successful sales of products a company must not only understand its industry, competition and the advantages and disadvantages of that market but also the firm must grasp the ambitions of their customers and what they seek in the products (Sabic, 2014). This has enabled Sabic to come up with different products for their commercial customers; these include. 1. Resins- these products have less weight, better aesthetics and are designed for the worldwide market. 2. Specialty film and sheet – this category serves corporations and industries dealing with high quality material needs, for instance the train interiors, aircrafts and so forth. 3. Polymer shapes- this cutting and fabrication service provides for orders from all over the world. This service offers products in performance sheets, rods and tubes. 3. Exatec glazing technology – Sabic offers these products for automotive companies. This technology has been the major reason behind the change in automotive designs. Special additives and intermediates – due to the specialization in thermoplastics, Sabic has been committed in the making of additives such as polymers and monomers for industrial purposes (Sabic, 2014). Theses additives get supplied in companies from all over the world but the most significant buyers are from nations involved in manufacturing such as china. Some of the materials made by Sabic include fertilizer, plastic and steel. Plastic come as a result of petroleum products and they are a result of the processing carried out by the firm. Fertilizers are also a byproduct, however, the fertilizer is more lenient to the making of additives and the making of monomers than from petroleum products. These products require a lot of energy to produce and as mentioned earlier in this essay, the company has always sought sustainable means of doing business that is why in December, 2013 they announced the use of cogeneration plant other than the use of coal plants. This shows that they are not only making products but also making the products utilizing efficient methods. Sabic’s vendors/ suppliers Multinationals companies like Sabic has a wide customer base across the globe due to this they cannot have limited number of suppliers. Sabic has 65 suppliers across the globe, these include independent companies that only supply raw products for Sabic (Sabic, 2014). The other suppliers include courier service companies that can be outsourced by customers to supply and transport these material to the respective plants. To ease the process of supplying and distribution, Sabic has integrated ecommerce to its business. The benefit of ecommerce in their transactions is that clients can access the services of a customer from their remote locations. In their website the company has offered a chance for prospective suppliers to register in order that they can get tenders to supply the company with raw material for their needs. The main reason why Sabic has many suppliers is that they are involved in the production of many goods as stipulated earlier. These product require specific raw material that might be essential to specific products. For instance resins require specific products that are different from the ones required for film and sheet. This means that there are small level suppliers and large suppliers. Supplier portal It is vital to note that Sabic utilizes the business to business supplier mechanism, this makes the company deal with specific entities directly thereby boosting easy production and purchasing. There is a vast demand for the Sabic’s products, to ease this the company engages their customers in a suppliers portal (Sabic, 2014). One of the forms of this portal is ecommerce and as explained above, it has been quite effective so far, this is because the world is embracing globalization at a fast speed and ecommerce is the core of globalization. The suppliers’ portal has been an effective platform not only for Sabic but also for the suppliers amongst themselves. This is so since the suppliers are able to connect here and this allows them to outsource materials amongst themselves. The suppliers’ portal has integrated all the ordering logistics that the company might consider necessary before making an order. Sabic uses this to make orders and the amounts required, this automated service benefits the company and the involved parties from the use of a lot of paper work that may have been encountered if the service was not automated. In addition the company also provides notices to suppliers through this platform, this quickens the message delivery process since the logged in members will access the information in real time. Suppliers’ performance The suppliers’ performance is quite commendable this is evident since the company has been increasing its production and expanding to new regions for instance, their recent expansion into the US that has been coupled up with state of the art cogeneration plant (Sabic, 2014). This move might be explained as a result of increased competition and a result of globalization, but cooperative partnership between the suppliers’ and the company is essential to such a move. Saudi Arabia provide the main and primary source of oil, this works perfectly for the pharmaceutical company. The government which is a major shareholder in Sabic ensures that the company accesses adequate oil for the production of these products. Such products that rely directly to the oil are plastic and additives that are extracted from the crude oil. The government can also be termed as a supplier since it has shares in the oil industry and it facilitates the supply of the oil to Sabic. Purchase order For purchases made by the company there is a procedure that need to be followed, the company must first evaluate what item they need then go through their list of suppliers to find out which supplier can effectively deliver. The company then makes a purchase order to that company and then wait for a delivery (Sabic, 2014). The purchase order specifies the amount of raw materials that the company needs and when it should be delivered, the purchase order also quotes the amount the company expects to spend on the commodity. The company, has the duty to delegate the supply of the raw materials in an instance where there are so many suppliers. What happens in such a situation is that the suppliers get into a competitive bidding where the one offering the commodity wins the bid at the company’s favorable price. This is an advantage for the company, in such an instance the price quotation is usually agreed upon in an open competitive way without malice. This is not to imply that there might be malice in their transactions. The supplier replies to the purchase order via the same channel and eventually delivers the goods. Request of quotation A request to deliver goods comes with a quotation of the price the company is willing to spend on the commodity. The price is set by the market and adjustments to the prices depends on the two parties, in this instance Sabic and the supplier (Sabic, 2014). A request of quotation between a supplier and the company can only take place if the company is not either informed about the current market prices or if the company is not willing to spend the much amount the supplier has requested. To decline the request the supplier has to reply to the company in order to allow for negotiations, if the two parties do not come to an agreement then the company sources out for the raw material from another supplier. Declining to deliver on an order is not advice since it ruins the relationship between the two parties. Invoices This is the mode of communication that the company uses to communicate between their suppliers and other value networks parties. In the event that the company needs to communicate to the supplier regarding the good or any other cases invoices are sent to the supplier. For in-house communications the company uses memos instead, they are the official messages platform. Sabic just like any other company sends messages through invoices, the other party uses the same platform to reply (Sabic, 2014). For instance, Sabic wants to issue a complaint against the supply of some defective raw materials, the company would send, an invoice to the supplier and notify them. The invoice would stipulate the cause of the complaint and the expectations from the company. A sufficient invoice also establishes the procedure a company is willing to go through in order to have their service accomplished or satisfied. The business process Sabic is involved in the production of many products such as the ones I have mentioned several times in this paper. Some which include fertilizers, polymers, meals and innovative plastics, all of these products require some differentiated processes to achieve them. For instance in the making of plastics the company gets waste material that are then cleaned and then melted. It is vital to note the current amount of plastic waste in the world right now is constant and since Sabic is involved in doing business in a sustainable way, they usually recycle the materials. Before the process is initialized, the company has to make sure they have a supplier whose work is to supply them with waste plastics (Sabic, 2014). This shows that the company does not have to store the plastic in their warehouses, the process can commence as soon as the materials are received. Depending with the requirements of their clients, the company models the plastics as per their desires. Once the products are completed, the company then distributes them to their customers in their respective places. However it is difficult to find that the plant in Saudi Arabia is supplying the orders in the US, the usual situation in such an instance is that the Sabic plant that will be sourced by the client is the plant located in the US. Fig.1 This diagram shows how the business process is administered by the management of Sabic, all the functional units commancee at the business process. Conclusion There are various processes involved in the operation of a business, this report has showed the processes that are involved for Sabic. The paper has also stipulated the business relationship between the suppliers and the company and how communication is facilitated between them. The most advantageous thing about Sabic and its value network is that all the businesses involved make money out of the trade between them. Finally, this report has given an example of a business process for one of their products; innovative plastics. References Sabic: chemistry that matters:http://www.sabic.com/corporate/en/ourcompany/technology-innovation Sabic: chemistry that matters: https://supplier.sabic.com/ Sabic: chemistry that matters: http://www.sabic.eu/products-services/ebusiness/_en/ Sabic: chemistry that matters: http://www.sabic.eu/products-services/ebusiness/tour/_en/index.htm Sabic: chemistry that matters: http://www.sabic-europe.com/our-company/research-development/_en/ Sabic: chemistry that matters: http://www.sabic.com/corporate/en/images/SABIC_Sustainability_Report_for_2012_tcm12-5846.pdf Sabic: chemistry that matters: http://www.sabic-ip.com/gep/en/Suppliers/Suppliers/suppliers.html Read More