Part of the family
Thanks to in-house suppliers at its industrial units, Braskem has eliminated inventories of frequently used items, reducing delivery time and saving BRL 300,000 in the first year
written by ◦ Karolina Gutiez

Braskem no longer needs to maintain a stocked inventory of its most frequently used items. Company members working at Braskem’s industrial units at Camaçari, Maceió and Triunfo now have in-house shops at their disposal. In recent years, there has been a trend for major companies to get suppliers to set up nearby sales outlets. As a result, these suppliers are now furnishing products through shops located on the grounds of the factories where those products will be used.

Frederico Maciel, Braskem’s Indirect Materials and Equipment Supply manager, explains that before introducing this system, Braskem identified the products that are most in demand (and therefore had to be kept in stock, with the attendant costs) and the most qualified suppliers willing to take part in this project. “The next step was to research our consumer history and hold an open tender for each product line, while setting unit prices,” says Frederico.

Once that stage had been completed, 10 different companies set up 18 shops (see box) supplying electrical materials, rollers, filters, belts, hoses, safety equipment, screws, fixers, valves, rings, and pipe accessories – the items most frequently used by Braskem’s industrial plants.

This BRL 150,000 project gives the company numerous advantages. Delivery time for purchases is much shorter. Company members can order what they need using the BAAN Intranet system, and suppliers log onto the Braskem Portal with a password to check for requests, which are fulfilled twice a day. Products are delivered directly to the user who ordered them without going through the storeroom or an inspection process, because the supplier can replace them right away, if necessary.

Paulo Studart, the Braskem officer responsible for Inventory and Storeroom Management, explains that the company has economized due to these shops, which saved the company BRL 300,000 in the first year alone. “Just by eliminating the most frequently used items in our inventory, we saved BRL 200,000.” The shops also provide on-site technical assistance, consulting, training, quality assurance and 24-hour service.

“Nortel has a team that exclusively follows Braskem’s routine, which enables us to understand and meet its priorities right on time, on a daily basis,” says Laércio Pereira, the Sales Director for Nortel, a Braskem partner that supplies low-tension electrical materials for industrial use, such as lightbulbs, wire, cable and blast-proof equipment, some of which are specifically designed for the petrochemical industry.

Nortel invested BRL 1.5 million to set up outlets at Camaçari, Maceió and Triunfo. “The company’s high consumption of our products justifies our presence and this investment,” guarantees Laércio. Nortel’s monthly sales to Braskem total BRL 600,000, twenty-percent of which (BRL 120,000) comes from orders placed directly by in-house shop users.

The partners who set up in-house shops on Braskem’s grounds can also sell their products to other companies. At Camaçari and Triunfo, they can do business with any company in those industrial districts. For example, Nortel also sells to Ford, Petrobras, Caraíba Metais, Dow Química, Politeno, Alcan, Polibrasil, Chesf Nestlé and Bunge, among many other clients, which represents additional sales of BRL 200,000 per month. “The establishment of in-house shops at Braskem has developed Nortel’s businesses in northeastern Brazil,” observes Laércio.

Frederico Maciel says that company members are responding well to this new system, which is faster and more direct than the conventional procedure. “We have created an opportunity for establishing a relationship between users and suppliers, and now Braskem members are responsible for making and following up on their own orders.” Users have to confirm receipt of orders made through the system, which verifies deliveries every week and issues a purchase order so the supplier can send a single invoice for all products delivered during that period. This reduces the usual red tape. The Camaçari unit has already adopted this system, and the Maceió and Triunfo units will soon follow suit.

Braskem partners with In-House shops

Thanks to these in-house shops, the company no longer has to keep changing suppliers to get the best deals, focusing exclusively on the bottom line. In Frederico Maciel’s assessment, Braskem’s medium- and long-term relations with its in-house suppliers have also increased the company’s productivity. “The better a partner gets to know Braskem and vice versa, the more changes in the process and service have improved, and fixed costs and inventories have fallen.”

Paulo Studart adds, “When the prices of these products go up, we take advantage of the benefits enjoyed by Braskem and the supplier to negotiate more competitive pricing.”

Expectations are that four more suppliers will set up shop on Braskem’s grounds in 2005 to meet the company’s needs. As a result, in-house shops will fulfill 15% of demand, compared with the current 8%, supplying about 17,000 items. As Paulo Studart observes, “This project has tremendous growth potential.”