Supply Chain Improvements in the Chemical Industry
CEFIC (The European Chemical Industry Council) are encouraging the extended use of Enterprise Resource Planning (ERP) tools to improve supply chain efficiency as competition from chemical companies in Asia erode the Europeans market share. ERP is widely adopted but the benefits of it are not being fully exploited.
In 2001, chemicals accounted for 5% of freight tonnes lifted in the EU and around 8% of tonne-kms. Their share of cross-border freight tonnage was roughly twice as high, reflecting the high volume of intra-EU trade in chemicals. The relatively high transport-intensity of the chemical industry is also revealed by average length of haul statistics. Consignments of chemicals move an average of 114 km on the road network and 386kms on the rail network, whereas for all commodities the average hauls are respectively 77 and 214 kms. The chemical industry will therefore be more exposed to congestion problems on European transport infrastructure.
Vendor Managed Inventory
Vendor managed inventory (VMI) is a well-established practice in many other industrial sectors. It relieves customers of the need to place orders in the conventional manner and puts the onus on suppliers to replenish customers’ supplies within agreed limits. This gives the producer both visibility and control of the end-to-end supply chain, allowing it to manage inventory and transport capacity more efficiently. From the customer’s perspective, the main disadvantage of VMI is that it locks them into a single-sourcing arrangement with a particular supplier. Experience in other sectors, however, suggests that the risk associated with single sourcing can be more than outweighed by the cost and service benefits of VMI.
For more information regarding our Chemical Inventory Management or how our systems can benefit your company then contact our office today. Call us direct on 01827 310 666 of alternatively fill out our online enquiry form.
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