Chemicals companies must ensure that raw materials and their products are handled and transported safely and immediately to enhance process efficiency and maintain a good business image and reputation. To achieve this, chemicals companies and third-party logistics (3PLs) must remove the roadblocks that can get in the way.
So what are these obstacles, and what solutions do you need to address them effectively?
1. Unexpected events
In recent years, global logistics organizations have encountered unforeseen events (from Brexit to the COVID-19 pandemic and the Ukrain-Russia conflict), which resulted in shore congestions and truck driver shortages, among other logistics challenges. The members of the National Association of Chemical Distributors, for one, said they have experienced “severe delays, skyrocketing costs and outright order rejections” during the global health crisis. The majority (82.1%) reported average delays of 11 or more days, while half said they encountered delays of more than two months.
Although unexpected events can be difficult — or nearly impossible to — predict, chemicals companies can alleviate the risks using logistics solutions that allow them to obtain real-time data and insights from reliable sources and make data-driven decisions.
2. Freight and Shipment Management Challenges
Chris Jones, EVP, Industry and Services at Descartes, told Inbound Logistics that the “biggest” supply chain silo is transportation — and we agree. The silo problem is more severe when chemicals companies use a combination of air, ocean, intermodal, and over-the-road transportation where many third-party players are usually involved. It can get worse if there is no means of obtaining a holistic and end-to-end view of the entire freight and shipment ecosystem.
Silos lead to costly supply chain/freight transportation issues that can gravely impact operations. Here are some of the impacts, according to an American Chemistry Council survey:
The truck driver shortage is another key freight/shipment roadblock, which we think can be solved by enabling visibility into the entire logistics and freight ecosystem.
Logistics organizations are responsible for ensuring the availability of raw materials needed in production. They need to prevent stockouts, which can have a rippling impact on the entire supply chain process.
But stockouts happen due to various factors, including unexpected events and shipping delays. According to the June 2021 survey of members of the National Association of Chemical Distributors (NACD), due to shipping delays, 84.5% percent of companies reported being out of stock of at least some imported products, up by almost 47% in March of the same year. More than 90% said they were close to running out of stock, and more than half said they lost more than $100,000 in revenue due to delays and stockouts.
If you have been in the industry for so long, you may agree that these problems are not new. Yet, that is why many chemical companies and 3PLs are at risk of using old approaches to solving problems — solutions that they think still work because they still give positive results, even though they give diminishing returns.
But what if there is a better way to approach the problem — a modern approach that lets your logistics teams digitally collaborate on an open network for greater trust, efficiency, transparency, and sustainability?
At Ropaar, we help companies across all industries overcome logistics and other supply chain challenges by implementing the most reliable and advanced solutions, including SAP Logistics Business Network (SAP LBN).
SAP Logistics Business Network (LBN) offers various advanced capabilities to empower logistics organizations to:
Your SAP LBN success, however, depends on how you implement it. As McKinsey puts it, “Modernizing can make supply chains more resilient and efficient. But it’s a major investment—and success isn’t guaranteed.” To ensure success, look to a reliable partner to help you implement SAP LBN and achieve your desired results.
Ropaar can help you implement SAP LBN seamlessly and achieve anticipated business outcomes.
Using our TradeBlazers approach, we will help you devise a strategic implementation and integration roadmap, seamlessly implement and integrate SAP LBN options, and integrate SAP LBN with other SAP and non-SAP solutions to maximize its benefits. We will also provide scalable solutions and services to cater to your ever-changing and ever-growing needs.