SUPPLY CHAIN MANAGEMENT
Woodward – Optima is adjusting its logistics
‣ space to expand production of important vaccine components during the pandemic . “ Now everyone is talking about onshoring and near-shoring , larger inventories and supply-chain assurance ,” Avni adds - and this is more than just talk . “ It is much more acceptable for buyers up and down the supply chain to pay a small premium for reliability .” Too often , though , those interactions are still like traditional negotiations over prices and terms . “ A lot of companies are reactive on supply chain ,” says Jonathan Hamer , head of procurement for Curia . “ The ones that nail it get that supply chain is first . “ There is no point in expanding if you can ’ t support it . All of these issues have always been around . There have always been earthquakes , epidemics , floods . The proactive companies , the ones that have invested in resilience are going to be at the front of the line when others are scrambling . Those are the successful companies .” Curia – the former AMRI - has 23 manufacturing sites , after integrating two new ones in August , and 3,400 employees . “ This is a complex organisation ,” Hamer explains . “ Division of labour is essential . Senior management relies on procurement and respects that procurement is a skill , supplychain management is a skill , and understanding redundancy is a skill . The same way a ship ’ s captain relies on the lookouts . He can ’ t be in the crow ’ s nest ; he has to be on the bridge . And he has to trust the lookouts and the navigator .” Hamer contrasts that to organisations with multiple layers . “ In a crisis , the more people who are afraid to make a decision means that you are going to the back of the line for contingencies . What really matters is that patients get the medications that they need . That is the reason I come to work every day , and I make sure my suppliers know the role they play in that . Supply chain is fundamental to success .” That same philosophy applies to cost . “ There is a place for just-in-time and for low unit costs ,” Hamer adds . “ But the key supply chain questions are simply ‘ Can you supply ?’ and ‘ Can you fulfil your commitments ?’ If not , good luck with repeat business and your reputation . That is why we figure costs holistically . Supply chain resilience has costs . We build our reputation on reliability , not cost .” Optima Chemical , another large and diverse speciality chemicals company , has been adjusting its logistical operations in collaboration with suppliers and customers . “ For every delivery that used to take two to three days , or weeks , or months , we have been adding a day , or week or a month ,” says Keith Woodward , supply chain manager . “ We have kept our customers informed on everything , including any cost adjustments , and so far no one has walked away . I don ’ t know that won ’ t ever happen , but so far they have been supportive of our efforts and we have not been squeezed , at least not to this point .” Part of the collaboration is working through contingencies . “ We have had customers require us to have second suppliers , some international , some domestic ,” Woodward adds . “ We understand those concerns , but we are going to have to start offering different prices when customers have those requirements . We are not unwilling to make those arrangements , but we cannot be expected to eat the costs associated .” •
48 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981