Strategies and Trends in Logistics and Supply Chain Management - WorldOfChemicals

Key Logistics Trends and Supply Chain Management in the Chemical Industry

Category : General Chemicals
Published by : Data Research Analyst, Worldofchemicals.com

The future development of the global chemical industry depends upon the competitiveness, efficiency, and sustainability of its logistics. The key logistic trends in the chemical industry during the subsequent decade are projected and the future solutions are suggested.

 

Key Trends 

1. Mergers and acquisitions (M&A)

As a result of mergers and acquisitions (M&A), the consolidated chemical industry would lead to the concentration of production facilities in large groups as well as longer supply chains. 

 

2. Poor Logistics Infrastructure

Lack of investment over time for logistics infrastructure would lower the reliability of the supply chain. Factors such as global competition, broadening geography, risk management requirement and greater capacity are driving changes in the logistics of the chemical industry.

 

3. Sustainability, Security and Safety Regulations

In order to mitigate carbon emissions from transport, more regulations are predicted to come in place. In addition, it would increase the cost of logistics and ultimately result in the establishment of novel supply chain models. Moreover, security and safety regulations are likely to be devised due to increased societal risk aversion and rapid urbanization.

 

Solutions

 

1. Sustainable Logistics Strategies

Strategies must be developed to adopt alternative modes of transport as well as increase fleet utilization levels and product exchanges.

 

2. Supply Chain Integration

To improve productivity and efficiency of asset distribution, improvement of integration along the supply chain, both vertical and horizontal are essential. 

 

3. Supply Chain Organization

More advanced organization of supply chain processes backed with quality supply chain staff training.

 

4. Synergies of LSPs and Chemical Companies

Improve supply chain security and safety through synergies of all chemical companies and logistics service providers (LSPs) throughout the world.

 

Supply Chain Management (SCM)

Supply chain management is of functional importance for chemical companies across the globe.

 

A. Key SCM Campaigns


Present SCM campaigns are made to achieve the following goals:


1. Campaigns focus on unexploited cost reduction opportunities.

 

2. Measures to better the order fulfillment process, particularly the order entry sequence for improved customer service and satisfaction.

 

3. Optimization of key performance indicator systems (KPIs) to regulate and manage the performance of SCM.

 

B. Key Essentials for Quality SCM


Essentials required for creating a good supply chain group can be segregated into the following classes: 

 

1. Framework

For a lean and streamlined supply chain management framework, it is important to set the standards and establish tools for the effective execution of the supply chain. Key decisions must be made in the discrete execution process of the supply chain. and during the delivery process. The products must be physically handled during the process of delivery.

 

2. Processes


The important processes for efficient supply chain organization, when it is customer facing are planning and fulfillment of the order. When reliable systems are in place, the planning process would be aptly followed by the order fulfillment process. This would make the transition to online ordering easier for customers and mediators.

 

3. Systems and Tools


The sophistication of tools in the chemical industry is of low level. The cost positions and process stability can be improved through the utilization of key performance indicator systems (KPIs), enterprise resource planning software (ERP), vendor managed inventory (VMI), integrated supply chain software and segmentation.

 

4. People


Well organized supply chain planners and managers are required by the staff for an effective supply chain management. Training should be provided for skills such as controlling techniques and planning algorithms. The focus should be for the establishment of a stable flow of information and products, rather than getting out last minute orders.