Chemical manufacturers need a customer focus

How will chemical manufacturers continue cutting cost whilst delivering innovation and growth? It was the core theme of the Chemical Supply Chain & Logistics Conference, LogiChem, which was held  in Antwerp, Belgium on April 16-18, 2013. Speakers from leading manufacturers like BASF, DuPont and Clariant shared their experiences and expressed their vision for the future. Chemical manufacturers need to bring the supply chain closer to the customer.

By Laurens Mosselman, supply chain correspondent

Chemical manufacturers have much to consider in the current economy. Finances are arguably the main consideration, as the recession in 2008 still has its aftermath. Opportunities to get back on top are in sight. There are several positive developments in the chemical branche, according to Eric Herman, Global Chief Commercial Officer at Damco. First of all there is the possibility of further advantageous feedstock positions and the development of techniques to acquire those raw materials.

One of the hottest examples is the extraction of shale gas. Paul Stevens of Chatham House writes in his article ‘The Shale Gas Revolution’ that shale gas rose from less than 1 percent of domestic gas production in the United States in 2000 to over 20 percent by 2010. Further opportunities that Eric Herman addresses are the continuing globalization of production, a growing demand and the wish for more efficient and reliable supply chains.

Transformation journey

So the opportunities are there, but how to capture them? Christopher Spahn and Kristina Schiffer, both supply chain excellence executives at Clariant, say it’s time for companies to go on a transformation journey. “Instead of focusing on cost reduction, you need to focus on delivering value to your customer.”

To deliver value, companies have to fulfill customer demand. And to find out what customer demand is, supply chains have to carefully segment their customers and become more commercial. “Bring the supply chain closer to the customer”, says Peter Devos, supply chain competence director at Monsato. “Interact more with the customer, because then you can bridge the gap between commercial and production functions within an organization.”

Learn from retail

“In the end customers are paying our salary”, says Petri Miettinen, Senior vice president supply chain management & HSE at Tikkurila. Miettinen expresses his thought of supply chain management in retail as being an example for supply chains in the chemical branche. In retail companies are extremely customer focused, have to deal with short lead time and low inventory and they rely on pull systems.

Eventually supply chain professionals have to grab these opportunities themselves. Matthias Görtzen, Partner at BearingPoint: “Supply chain professionals are a different kind of people. Analytical, typical back office and not really self promoting. They are not seen as additional valuers. Even though they are. Supply chain professionals have to go out there and demonstrate their capacity.”