SUPPLY CHAIN MANAGEMENT
Mullen . “ There is so much litigation , especially around PFAS , for example , that indemnification provisions are increasingly important ,” she said .
“ Old contracts may not have them , or if they do the provisions may not be current or comprehensive . It ’ s also important to remember that those provisions are there to protect everyone .” In particular , Levy cautioned that “ process improvements can have major consequences for indemnification because improvements are not just providing a service , they are making a product . That has massive implications for product-liability litigation .”
Mike De La Cruz , contract manufacturing director at Ascend , said that his company has explored co-investing with various tollers . “ They are more efficient at spending their own capital and they can do many things at better prices than we can . That is why we go to them in the first place . They are able to take our technology packages and implement them .
“ That is their strength and executing on that builds our confidence that we can go back to them . Also we don ’ t have to monitor them too closely . They put sweat equity into it and it becomes a partnership that we want to sustain .”
Despite the theme of shortening supply chains , there are some who remain sceptical . “ We ’ ve run the numbers over the full cycle and it is definitely less expensive to pay a little more per pound than it is to have the supply chain go down and then production have to be halted ,” said a group manager for one mid-sized company .
“ But when China reopens some buyers will drop you in a moment . It ’ s like a country song . They get burned by the low-cost suppliers , but they keep going back to them . They can ’ t help it .”
Customers drive ESG needs
The importance of environmental , social and governance ( ESG ) priorities have been part of management and operations for enough years now that the general session on the second day of the conference focused specifically on the impacts of ESG and sustainability standards on business continuity .
“ We ’ ve had sustainability statistics going back decades ,” said Deidre Sandrock , director of sustainability and innovation at Milliken , during a panel session . “ It ’ s just since the early 2010s that we started having customers request those from us .”
“ Our focus is on our customers ,” agreed Sarah Phelan , director of sustainability at Ashland . “ They are asking for more and more : more data , more engagement . Some of that is so they can differentiate themselves . It is also an element of participating in trade associations such as SOCMA .” A representative of the toll manufacturing segment , Bryon Leggett , vice president of business development at ChemDesign , offered a slightly different perspective on the same trend .
“ In 2017 a customer asked us to go through the EcoVadis assessment ,” said Leggett . “ We took a look at it and said no , because it was a huge effort . We were getting more of those requests , so finally in 2020 we went through the process . We are a family-owned business and the new generations are very concerned with these issues .”
Even so , Leggett was frank about the initial experience . “ We jumped into our first assessment and it did not go well , mostly because of silly things ,” he recalled ruefully . “ I urge every one to get help , support and guidance .” After the initial bumps , Leggett added , the assessments have become useful tools both internally and externally . ●
Speakers at the ESG panel noted a trend towards customers demanding action
52 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981