Issue

Syensqo is a global chemicals company with a broad product range that includes sectors such as aerospace, automotive, healthcare, energy, batteries, and consumer goods. To manage this extensive portfolio, the company is divided into several global business units (GBU's), each concentrating on a specific market sector. These units drive innovation in areas like advanced materials, consumer products, and industrial solutions. This structure allows Syensqo to adapt its cutting-edge technologies to the unique demands of each market, ensuring robust growth across its strategic divisions. The GBU concept is well established in the Business, however not very clear on how it needs to be represented in the system and this document is to identify the same. 

Background & Context

Syensqo is a prominent global chemicals company renowned for its diverse and comprehensive product portfolio. The company operates across a wide array of sectors, including aerospace, automotive, healthcare, energy, batteries, and consumer goods. To effectively manage and optimize this broad range of products and services, Syensqo has organized itself into several specialized Global Business Units (GBUs), each focusing on a distinct market sector. Following are the GBU's that are active as of the time of writing this paper

• Aroma Performance
• Composite Materials
• Novecare
• Oil and Gas
• Speciality Polymers
• Technology Solutions

Each GBU is dedicated to a specific area of expertise, allowing Syensqo to tailor its strategies and innovations to meet the particular needs and demands of its respective industries. This specialized structure fosters innovation in key areas such as advanced materials, consumer products, and industrial solutions. By concentrating on these critical segments, Syensqo is able to leverage its cutting-edge technologies and industry insights to drive growth and maintain a competitive edge. The company’s strategic organization enables it to respond dynamically to market trends and customer requirements, ensuring that its solutions are both relevant and effective. This approach not only supports Syensqo’s commitment to innovation but also contributes to its robust growth and leadership across its various strategic divisions.

In order to support the innovation, operations and Business development each of these GBU's is allocated a separate budget along with their own leadership team, org structure and reporting lines. Each of these GBU's have different customer base and different trademarked product lines (Some of the products still might have similar compositions to other GBU's) with different pricing mechanisms.

Following are some of the commonalities across the GBU's

• Products

• • A lot of the raw materials and semi-finished goods are shared across the GBU's. A finished product of one GBU's can become a semi-finished product of another GBU
•  Physical Presence
  • Some of these GBU's share the same physical location for Production or Distribution Example: 7008 Willow Island in US is a manufacturing center shared between Composites, Novecare and Technology Solutions, 8090 / Ospiate Di Bollate in Italy is a distribution center for Aroma Performance, Novecare , Speciality Polymers and Technology Solutions
• Company Registrations
  • These GBU's are not registered separately as a company in each of the country they operate. They usually share the same companies with their licenses to sell , manufacture and operate assigned to the same company. Ex: Company code 6059 SOLVAY SPECIALITIES INDIA PRIVATE LIMITED in India which is registered to operate and sell Novecare, Technology Solutions, Aroma Performance and Composite Materials products
• Fixed Assets
• Logistics eg: Transportation management and warehousing

Following are some of the differentiating factors for each of the GBU's

• P&L and Group Results
  • Each GBU has its own P&L, Balance Sheet
  • Market results are published at a operating segment level(Further aggregation of  GBU's)
• Regulatory and Compliance
  • Each GBU, given the nature of their Business and unique customer base have different regulatory and compliance requirements ex: Trading Licenses are obtained at GBU level. 7786-CYTEC AUSTRALIA HOLDINGS Pty Limited has 2 trading licenses under one legal entity
• Operational Differences
  • At a material level: Even though it is the same materials that is procured / transferred / Sold, following are some of the differences that can happen at a GBU level
    • Raw materials though same material across the GBU's can have a different supply chain network i.e. In GBU 1, the same raw material can be transferred from another plant and in GBU 2, it can be transferred from a different plant. This could be because of the quality parameters, urgency of the material, advance planning maturity, country of origin etc..
    • Though same material is sold to a customer from the same plant, different GBU's can have different ways of packaging the product  
    • Though it is the same material that is sold, there could be different ways of shipping the product depending on the customer and the GBU
    • Different valuation approaches for materials across GBU's - Some GBU's consume the standard cost of the material and the others Moving average price(Semi standard price).
  • At a Business Partner (Customer/Vendor) level: 
    • Incoterms
    • Can have different payment terms for the customer or vendor
  • KPI's
    • The targets and KPI's are different for each GBU even though the materials are similar. This is due to the nature of the industry and the customer base
  • Operational Security
    • Access Restrictions / Chinese walls between the GBU's for accessing certain kind of data due to the operational / in country regulations/policies and procedures

Considerations

Syensqo being a relatively young company, Investments, Divestments and re-orgs are expected and the GBU representation in ERP should be flexible enough to support the same.

Approach

Based on the above background, following is how GBU's will be represented in ERP Rebuild program

• Success Factors:
  • The entire GBU Organisational Structure and reporting structure will be replicated in Success Factors
  • The cost centers will be aligned with the GBU structure
  • There will be common job profiles across Syensqo, however where required there will be specialised jobs created for each GBU
  • The job bands however will be aligned across Syensqo and will not be GBU specific - These bands will be consumed in operational / DOA workflows
• ERP
  • Enterprise Structure
    • Enterprise structure objects will not be differentiated based on GBU unless the following exceptions
      • Legal / Regulatory requirements require the GBU's to be denoted separately
      • Required for reporting the P&L ex: Profit center 
      • Requires a lot of customisation and effort to meet the operational requirements if the GBU's are not denoted separately
  • Master Data
    • Master data will generally will not have any GBU differentiation ex: Single material master record with relevant plant and storage location attributes.
    • There will however be some exceptions ex: BOM's , Routings, work centers , cost center , profit center etc.
    • Manufacturing Data - Mostly GBU specific
    • CO Data - Mostly GBU specific by hierarchies used for reporting
    • Other - Non GBU Specific. There might be GBU specific views 
  • Security
    • GBU based security will be implemented where required either by Enterprise structure objects or custom security objects
  • Reporting
    • GBU based reporting will be implemented where required by Enterprise structure objects or % based split based on historical data
    • Sustainability reporting??