SUPPLY CHAIN MANAGEMENT
The buyer-toller panel agreed that supply chain collaboration is critical it comes , the milder it is likely to be . The later it comes , the more severe . My forecast is for three negative quarters for the rest of this year , then recovery in 2024 .”
Everyone is dealing with inflation and supply constraints , he added , but these are not the same as supply disruption . Constraints are longterm limits to production – including labour , raw materials , capacity and transportation . In contrast , disruptions are more temporary , including physical , military , health or sanctions interfering with commerce .
Fry set one theme for the conference in his discussion of trade policy and how buyers are trying to make their supply chains shorter and more robust . He suggested that speciality chemicals companies and other manufacturers in capital-intensive industries are at an advantage in those efforts . However , “ it ’ s not possible for most labour-intensive industries , because we don ’ t have the workers in the US any more .”
Collaboration is crucial
Within the domestic market , there was a theme of continuity , as highlighted by the opening panel discussion among buyers and toll manufacturers . The message from the panel at the 2022 conference was how buyers and tollers could collaborate more closely for mutual gain . That sentiment carried through to Nashville .
“ We have tried to help our toll manufacturers through supply-chain difficulties by using our purchasing leverage ,” said Ram Srinivasan , senior manager of global contract manufacturing for BASF . “ We have also tried to help by supplying packaging materials when that was possible , as well as any other things we could do from our vantage point .”
The logistical disruptions of the past few years have highlighted the risks of long , thin supply chains seeking lowest costs . “ We definitely see an up-tick in production being brought back to local manufacturers from overseas production ,” Srinivasan noted .
“ That has meant a rush to get new operators qualified . In that overall trend , the common distribution of production is for the newest and the oldest product lines being made by toll
Fry - Recession will probably be mild manufacturers . The product lines that are in development as well as those on the downside of their cycles .”
Matt Loebbaka , business development manager for Chem Group , elaborated on that idea . “ We also look globally , and we also think about how our suppliers and manufacturers fit into our logistics ,” he said .
“ If the toller is going to handle the formulation end-to-end , it doesn ’ t really matter where they are because we – or they – can ship anywhere . If the supplier is just handling one or two steps , we want their location to be close to one of our major operations .”
Even as companies work to shorten supply chains , “ not everything is made in North America ,” said Todd Zahn , president & CEO of American Chemical Solutions .
“ We cast our net worldwide . In terms of supply we are seeking what makes sense , where we want to have something made . There is also the balancing of taking on more work , and what we can actually deliver . Open and honest communication in the partnership builds trust . That is especially important when things go wrong .”
Keeping contracts clear
The importance of keeping contracts clear and current was another lesson learned from the supply-chain difficulties , noted panel moderator Ruth Levy , an attorney with Williams
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