The document discusses whether supply chain is a business or a service. It provides definitions of a business and service, then outlines the evolution of supply chains from the creation era to the current specialization era. The document uses Equate Petrochemical Company and Walmart as examples to illustrate key supply chain functions and how integrated supply chains are managed as businesses, not just services. It concludes that while supply chain involves the movement of commodities, an integrated supply chain should be considered a business due to its focus on customer service and key performance indicators to differentiate itself in the market.

1. THE KUWAIT SUPPLY CHAIN
&
LOGISTICS CONFERENCE &
EXHIBITION
14 – 15 DECEMBER 2011
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2. IS SUPPLY CHAIN
A BUSINESS OR A SERVICE!
PRESENTED BY:
SALAH AL-KHARRAZ
INTEGRATED SUPPLY CHAIN LEADER
EQUATE PETROCHEMICAL COMPANY
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3. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
Definition
A Business definition is:
• A business is an organization engaged in the trade of
goods, services, or both to consumers.
A Service definition is:
• A type of economic activity that is intangible, is not stored
and does not result in ownership. A service is consumed at
the point of sale. Services are one of the two key
components of economics, the other being goods.
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4. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
Evolution of SC
1. Creation Era
• The characteristics of this era of supply chain
management include the need for large-scale
changes, re-engineering, downsizing driven by cost
reduction programs, and widespread attention to the
Japanese practice of management.
2. Integration Era
• Is an era integrated under one plan and is Enterprise
Resource Planning (ERP) enabled.
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5. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
Evolution of SC… Cont’d
3. Vertical Integration
• This era in which vertical integration with the suppliers
in upstream direction and customers in downstream
direction is achieved.
4. Globalization Era
• The globalization era, can be characterized by the
attention given to global systems of supplier
relationships and the expansion of supply chains over
national boundaries and into other continents.
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6. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
Evolution of SC… Cont’d
5. Specialization Era
• Industries began to focus on “core competencies”
and adopted a specialization model. Companies
abandoned vertical integration, sold off non-core
operations, and outsourced those functions to other
companies. This changed management requirements
by extending the supply chain well beyond company
walls and distributing management across specialized
supply chain partnerships.
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7. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
Supply Chain Functions
Electronic Data
Communication Analysis
Procurement Manufacturing Physical Distribution Order Management
Supplier
Customer
Product Development
Customer Service
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8. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
About EQUATE
 Established in 1995, EQUATE is an international joint
venture between Petrochemical Industries Company
(PIC), The Dow Chemical Company (Dow), Boubyan
Petrochemical Company (BPC) and Qurain Petrochemical
Industries Company (QPIC).
 Commencing production in 1997, EQUATE is the single
operator of a fully integrated world-scale manufacturing
facility producing over 5 million tons annually of high-
quality petrochemical products which are marketed
throughout the Middle East, Asia, Africa and Europe.
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9. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
EQUATE ISC Handling Products
 Solid Form:
 Polyethylene
 Polypropylene
 Liquid Form:
 Mono-ethylene Glycol
 Di-ethylene Glycol
 Crude Glycol
 Styrene Monomer
 Paraxylene
 Heavy Aromatics
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10. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
The Key Parts of ISC
A Supply Chain has three key parts:
• Supply focuses on the raw materials supplied to
manufacturing, including how, when, and from what.
• Manufacturing focuses on converting these raw
materials into finished products.
• Distribution focuses on ensuring these products reach
the consumers through an organized network of
distributors, warehouses, and retailers.
COMMUNICATION 10

11. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
EQUATE ISC to Manage
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12. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
EQUATE 2011 Fact Sheet
YEARLY FACTS & FIGURES (in MT)
LIQUID PRODUCTS SHIPMENT
PRODUCT MEG DEG CG SM PX HAS YTD
QUANTITY 974,754 696,132 23,760 469,682 744,958 41,468 2,950,754
SOLID PRODUCTS SHIPMENT
PRODUCT PE PP YTD
QUANTITY 632,400 12,2409 754,809
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13. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
WAL-MART Supply Chain
Global Fortune 500 List
Rank Company Revenue in $
1 Wal-Mart stores 219,812
2 Exxon Mobile 191,581
3 General Motors 177,260
4 Ford Motors 162,412
According to an analyst: Wal-Mart was able to achieve
a leadership position in retail industry DUE to the
efficient supply chain management practices.
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14. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
Conclusion
Commodity business cannot be differentiated in the selling
price, it by the best class in service… JIT/OTIF with the
right KPI’s, and best customer service.
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15. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
Conclusion… (cont’d)
Integrated Supply Chain is a BUSINESS
not a moving commodities service 15

16. IS SUPPLY CHAIN A BUSINESS OR A SERVICE?
Questions & Answers
Q&A
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17. IS SUPPLYCHAIN A BUSINESS OR A SERVICE?
THANK YOU!
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