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e-Business in the chemical, rubber and plastics industryBasic E-Solutions toolsWorldAccount – the BASF global extranet platformFrom early 2000, BASF introduced and successfully operated a variety of customerportals in Europe and North America. Since the launch of WorldAccount(www.worldaccount.basf.com) in 2001 BASF serves customers with a globally integratedextranet platform for sellers and buyers based on the latest XML technology.WorldAccount stands for more than 60 % of BASF's e-business.WorldAccount bundles all product categories (except oil & gas) under one single internetpresence. WorldAccount functionalities include: order placement, order status, e-reporting, access to certificates of analysis, material safety data sheets and a broadrange of product information, as well as a great variety of options for personal contactand customer support, like certain calculation programs. The 24-hours-7-days-a-weekservice enables customers to make quick, transparent and cost efficient purchasingdecisions around the clock by providing detailed product information and uncomplicatedordering procedures.WorldAccount includes the option to order directly via the web or via a specific faxchannel. The “fax to ERP” tool, being part of the order entry module of WorldAccount isable to automatically transfer order faxes from customers into the ERP systems with highrecognition rates. In all cases the customer receives order related information about theindividual transaction via WorldAccount.After initial customer registration, all that is required for a variety of electronic tradingopportunities with BASF is an ordinary PC with standard operating software, Internetconnection and a browser. Strict confidentiality is assured through encryption and the useof firewalls.The platform supports 11 languages including German, English, Spanish, French, Italian,Portuguese, Mandarine, Kantonese, Japanese, Thai and Korean.ElemicaBASF's ERP is linked to Elemica Holding Ltd., a neutral electronic marketplace acting asa transaction hub for the purchase and sale of basic, intermediate, specialty and finechemicals. For BASF the hub concept is a vital part of e-solutions. Via Elemica BASFreaches out to other industries like the agricultural industry via their hubs or standards orto the consumer packed goods industry. In addition to the full connectivity services ofElemica, BASF uses the Elemica Buyer Direct and the Elemica Seller Direct solution as a“lite” working channel towards small and medium sized companies. BASF was the firstcompany to transact via Elemica in Europe, NAFTA, South America and Asia. Using theElemica hosted solution it conducts both buy/sell relationships using VMI and SMI. In2006 BASF was the top growing buyer on the Elemica network and ranked second inboth buy-side and sell-side volumes. It is now expanding into new downstream industriesin carpet, agricultural chemical industries and paper industry.Vendor managed inventory (VMI) and direct system to system connectionsVendor Managed Inventory (VMI) or direct system to system are seen as add-on to theabove described standard solutions WorldAccount and Elemica. BASF has launched itsVMI solution which makes full use of the Chem eStandardsTM data structure andprocesses. Use of the proven Chem eStandardsTM functions such as order create, orderresponse etc., have enabled the development of this application.143
e-Business in the chemical, rubber and plastics industryStandards and e-InvoicingProcess standardisation remains important for BASF to cope with the upcoming processrequirements. The exchange of invoices and self bills via e-channels represents aspecific challenge. Different legal and technical requirements of EU members and nonmembers are obstacles to electronic invoicing and billing. Increasingly the standardisationefforts leave the boundaries of the chemical business itself and reach out into otherindustries, like automotive or consumer packed goods. BASF again copes with thesetrends via Elemica, offering interoperability between different industry standards andprocesses.5.2.3 Impact and lessons learnedWithin BASF e-business has become an important and well accepted channel tocooperate with customers. A constant engagement and commitment, the review ofmarket requirements as well as a strong link into the overall strategy are key successfactors for e-business (see Exhibit 5.2-4). Although e-business targets process efficiencyand automation, direct customer interaction is a focal area of marketing & sales activities.BASF understands e-business including currently used options as another strong andmodern link to their customers. The global set-up of the e-business activities is veryimportant, as the business in many market segments requires worldwide support.Exhibit 5.2-4: Linking e-business into BASF strategy5.2.4 ReferencesResearch for this case study was conducted by <strong>empirica</strong> in cooperation with BASF AG.Sources and references used:Interviews with Dr Herbert Fisch (July 2007, January 2008) and e-mail exchangeBASF e-solutions. The easy way to do business (company brochure)BASF annual reports and company website (www.corporate.basf.com)144
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