Chemical supply chain is at the crossroads of new upgrading, on the one hand, it is a challenge brought by traditional methods and a convincing technical solution. Discover the major challenges of lack of real-time visibility, and how your organization can better deal with them.
The global chemical industry has more than $5trillion in income and employs about 20million people, which is more than Romania’s population. Research shows that, at the current rate of growth, revenue may double by 2030. However, rising industry expectations are putting ongoing pressure on the chemical supply chain. In view of the current situation of the supply chain in the chemical industry, it is difficult to meet these expectations.
Although the chemical industry has generated huge income, enterprises are still constantly responding to some challenges in the chemical supply chain. These challenges affect product delivery and your company’s supply chain costs. They can prevent your chemical companies from realizing their real financial potential.
But it’s just the beginning! This paper explores three major challenges in the supply chain of chemical companies and how to better manage them.
1: You can’t find the stock.
A multibillion dollar chemical company usually has hundreds of warehouses around the world. If you work in such a company, there are likely to be thousands of returnable assets in your warehouse, such as ISO tanks, IBCs, cages and other types of tanks for the delivery of chemical products.
But inventory tracking is still a combination of some traditional tracking systems (such as RFID tags) and human dependence. If you need to deliver an emergency order, your ground team will have to look for the right container set in your facility.
This labor-intensive approach is time-consuming and increases the operating costs of your chemical industry supply chain. This cost applies to the purchase of new returnable assets or the preservation of them in warehouses.
If your team is unable to find the container in time, you either buy a new container or hire a new fleet, which will incur additional costs. The worst case is that you refuse or delay an order because you don’t know where your container is.
In this case, a perfect inventory management system makes it easier for you to track the inventory process within the equipment.
2: You are dealing with the supply and demand fluctuations.
The huge scale of the chemical industry makes it a complex whole; there are many things to manage. Chemical industry often has to cope with huge fluctuations in supply and demand. These fluctuations may be due to market volatility, lack of raw materials or changes in customer demand. To properly address these issues, it is essential to make your delivery lines work freely.
For example, when you send the goods to the customer location, there are many fuzzy visible areas in the middle. Its delivery is usually confirmed only when the customer uninstalls it and sends it back for confirmation. As a result, your returnable assets are often waiting in the customer’s location.
This situation prevents you from making the most of your recyclable assets in your chemical supply chain. You can’t complete several orders because your team doesn’t know when your returnable assets will return to your warehouse or you may have too many returnable packages in stock.
It limits your timely delivery of your chemical products, causing confusion. You rely heavily on your customer or fleet manager to confirm the status of the container. If you know where your returnable assets are, you can optimize delivery.
If your truck driver knows that empty containers lie in the customer’s location, if the location is on their route, they can take them. This will accelerate the reverse flow of your assets.
3: You are processing unconfirmed or unpredictable deliveries.
As a chemical manufacturer and supplier, you must deal with the unclear location of your assets.
You have delivered the goods on time, but the time to unload the container at the customer’s place has been delayed. You cannot know this unless you get the same confirmation from the customer.
Your inventory may lie in a place you don’t know at all before you’re confirmed.
After delivery, the reverse movement of your assets will also need to be confirmed by the customer. All of this takes a lot of time and money to track.
Therefore, you are highly dependent on the customer or the third party fleet owner to provide you with the latest information on the returnable assets. Therefore, the chemical supply chain assets stay at the customer site for a longer and longer time.