DuPont:
A Supply Chain Juggernaut
By
Kevin Kowalczyk and Michael Thomas
Officially known as E.I du Pont de
Nemours and Company, but more commonly referred to today as simply DuPont, is a
company that was founded in 1802 solely specializing in gunpowder and
explosives. Eleuthère Irénée du Pont
founded the company on the banks of the Brandywine River in Wilmington, Delaware. DuPont dominated the market of gunpowder
manufacturing, so much so that it was eventually identified by the United
States government as a monopoly in 1912, resulting in the division of the
company. The split resulted in DuPont expanding
their business into areas outside the world of explosives and gunpowder. During the early 1900s, they focused on
developing new chemicals. DuPont’s
growth led the company to acquiring General Motors and starting a joint venture
with Standard Oil, which is now known as Exxon.
Even with all the expansion, the company’s most important economic move
was the development of nylon. DuPont’s
expansion of its businesses into many different focuses including agriculture,
automotive, chemicals, electronics, energy, food, beverage, and more continues
to this day. Today, DuPont is the 70th
largest industrial/service corporation in the United States. They have approximately 79,000 employees, of
whom, roughly half are employed outside the United States. DuPont has 135 manufacturing and processing
facilities in 70 different countries, with an additional total of 75 research
and development/customer services labs; 40 of these labs are in the United
States, and 35 are in various other countries.
DuPont now characterizes itself as “A
World Leader in Market-Driven Innovation and Science” with the motivation of
their endeavors to “provide enough healthy food for people everywhere, decrease
dependence on fossil fuels, and protect people and the environment for
generations to come.”
DuPont has focused on certain supply chain initiative
accelerators. Business Process
Management (BPM) is defined as a management discipline that provides governance
for a process-oriented organization with the goal of agility and operational
performance. The BPM concentrates on
three specific points; industry standard frameworks and models (SCOR),
standardized metrics (key performance indicators), and external
benchmarking. This management extremely
important to DuPont for six specific reasons: 1. Focusing on process
improvement first then designing and delivery of IT solutions. 2. Managing business processes as
assets. 3. Aligning work practices
roles, roles and technology. 4.
Accelerating the adoption of the best practices. 5. Enabling Process-oriented
benchmarking. 6. Formalizing Business
Process Management governance. They
define themselves as “a market-driven science company.” DuPont is broken into different
segments. They have more than 70
separate business units. A few examples
are agriculture and nutrition (crop protection and nutritional health), electronics
technologies, performance chemicals,
and safety and protection. (protection, sustainable solutions.) At DuPont, their supply chain approach is a
combination of being functionally oriented and being process oriented. DuPont has developed a four step process to
meeting their Business Process Management goal.
The four steps include: 1. Establishing a multiyear approach. 2. Developing corporate standard processes.
Corporate standard processes are based on the industry’s best practices, such
as, framework models like the SCOR, and the definitions and bench marks. A SCOR is more commonly known as the Supply
Chain Operations Reference. The SCOR model
is used to provide a framework that can link the business processes, metrics,
and technologies into a united structure 3. Use proven tools and
methodology. 4. Having a shift to “process first” approach.
DuPont
has been a successful company for well over a century. The reason they are consistently “winning”
with their supply chain is because they have stuck strong to their proven tools
and beliefs that have gotten them to this point to begin with. DuPont is known for strongly focusing on
their processes, their organization, their data, their systems, and governance
that has made them a successful company for so long. They also use a process level hierarchy,
working on the enterprise level all the way up to the transaction level. Lastly, their use of the Architecture of
Integrated Information Systems (ARIS) has helped them to constantly “win”. The Architecture of Integrated Information
system is an approach to enterprise modeling, in which one uses various methods
for analyzing processes. In the meantime
a holistic view of process design management is also being used. This provides DuPont with a universal
methodological framework as well as a business modeling tool.
The
fact that DuPont has grown exponentially over the years leaves the company
vulnerable to some major threats. Having
the company spread throughout 70 counties and relying on many natural
resources, they will always be susceptible to major natural disasters. If one factory has to shut down, it could
potentially cost the entire company millions of dollars. DuPont is also one of top five companies in
the agriculture industry today. They are
a part of the movement to rapidly increase food production across the world as
the demand for agriculture is constantly increasing. This has made the company vulnerable to
another major threat; in recent years there has become an international problem
with counterfeit pesticides, leaving many major agricultural companies at risk.
DuPont has taken the problem head-on and
formed DuPont Crop Protection (DCP) which is an anti-counterfeiting
program. Using their exceptional supply
chain they have already reduced counterfeiting significantly and continue to
lead the charge against the illegal pesticides.
Just as any other major company spread across the entire world they are
always at risk for the possibility of employees going on strike over wages or
working conditions. Finally, if the
company does not forecast properly, there is always a chance that they either
under produce or over produce goods.
This threat would cost the company millions of dollars in inventory
carrying cost or a major shortage in their goods.
DuPont
is a giant in the business world internationally and domestically. They have ran a very efficient supply chain,
which has lead them to become one of the global giants in multiple fields. DuPont’s willingness to invest in a vast
array of fields has gotten them where they are today, and I fully expect them
to continue on the same path in the future, locking their spot as one of the
most important businesses in the world.
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