Strategic Management - Dow Chemical Company

Published: 2021-09-12 15:05:09
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Category: Business

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Introduction and background        Dow Chemical Company is the world largest chemical company that uses the power of science and technology to innovate what is essential to human development (The Dow Chemical Company, 2015). Herbert Henry Dow founded the Dow Chemical Company in 1897 through the introduction of new chlorine cell to make bleach as its original product, which contributed to the success of the company today (American Chemical Society, 2015). There are a few types of market and solutions that Dow Chemical Company provides such as agriculture, automotive and building & construction. An example of the solution for building and construction is the GREAT STUFF™ Insulating Foam Sealants that helps to save energy and money by preventing air leaks through gaps such as windows and doors (The Dow Chemical Company, 2015). Although there are numerous solutions that Dow Chemical Company has provided, there are still issues that arise such as: 1) lack of product storage and loading infrastructure due to the increasing demand of consumers in product, 2) increased rate of motor vehicle accident 3) ineffectiveness of project planning and organization. The recommendation to improve the issues are practicing Just-In-Time (JIT), implementing rules and regulation, and implementing employee empowerment. [pic 1]Problem description and analysis        Dow Chemical Company had encountered an issue, the lack of product storage and loading infrastructure to meet the rise of consumers demand in product line where the plant production had to produce large amount of products (Buss and Ivey, 2001). The product storage and loading infrastructure will have to be enlarged at the manufacturing site but there are no excess spaces as the site was packed with railcars (Buss and Ivey, 2011). Enlarging the product storage and loading infrastructure will result in traffic congestion and lead to delay of the process of loading and shipping. The delaying process will cause dissatisfaction and loss of customers. Chances that customers will cancel their purchase if the products are not delivered on time. Those undelivered products will be either kept in the inventory or threw away as they do not generate any profit and occupied the storage area. Moreover, enlarging the product storage and loading infrastructure cost $3.2MM. Instead of using the original plan, Six Sigma Rail Delivery Project was a better method because it requires capital investment of $0.75MM rather than $3.2MM and manage the increase of demand while enhancing the performance to consumers (Buss and Ivey, 2001).         Besides that, the increase rate of motor vehicle accident was another issue of Dow Chemical Company. This was due to lack of awareness about the safety of the workers in Dow Chemical Company. For example, 25 workers from sales and marketing whom drive to customer’s sites and around the Hydrocarbons and Energy facilities suffered from motor vehicle accident and the profitability of Dow Chemical Company was affected where the workers were not able to work due to injury (United States Department of Labor, 2005). Based on the survey done on the drivers, the three main causes of the accidents were not paying attention on driving, not realizing the surroundings’ object and not checking when reversing the car (United States Department of Labor, 2005). The reason of the three causes of the accidents might be due to lack of sleep, distraction such as mobile phones, driving behavior and laziness. All of these behaviors probably derived from the slack rules and regulations of Dow Chemical Company. Furthermore, the accidents happened when the workers of Dow Chemical Company are not familiar with the customer’s site. The customer’s sites may not have a proper road sign such as danger sign or two service road sign that could lead to serious accidents. Thus, Dow Chemical Company was motivated to implement a program to address this issue using Six Sigma to reduce 50% of the motor vehicle accidents and to find out the accurate causes of this issue while using the least cost (United States Department of Labor, 2005).

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