NPRA '02: Industry eyes 'C-commerce' for supply chain

27 March 2002 01:25  [Source: ICIS news]

SAN ANTONIO, Texas (CNI)--About 100 chemical industry logistics managers took a closer look here Tuesday at the next stage of supply chain management, learning about the concept of "C-commerce" in the first supply chain forum hosted by the International Petrochemicals Conference (IPC).

The "C" stands for collaboration and Eastman Chemical's former top executive, Earnest Deavenport, described it as the "X-generation of e-commerce models".

Deavenport served as the only chemical industry panellist on the forum moderated by Bill Waycaster, the top executive at Houston-based Texas Petrochemicals LP.

The forum convened after the final session of the 27th annual IPC, sponsored by the National Petrochemical and Refiners Association (NPRA) and marked the first such effort by the organisation to conduct a supply chain management dialogue.

Deavenport was joined on the panel by executives from companies in each of the crucial logistics areas of the supply chain - rail, truck, barge, terminal and ocean carrier. Despite their differences, they agreed that increased collaboration will translate into lower costs.

Each year, according to Deavenport, 8000 to 10 000 chemical shippers spend $160bn (Euro181bn) on logistics. And he noted that the largest single chemical shipper accounts for just $2bn of that total.

He told his fellow panellists: "We would like to collaborate with you in a way that's beneficial to both of our industries."

Citing the impact of e-commerce, Deavenport said he sees movement toward an "unprecedented consolidation in the transportation and logistics field" and predicted chances for "a real marriage of information and transportation services".

Outlining the differences between traditional e-commerce arrangements and C-commerce, he noted that C-commerce will encourage partnerships and advance the myriad of options already available to make shipping as efficient as possible.

Union Pacific (UP) railroad's Ed Sims offered two examples of chemical companies collaborating on rail routes and called it the trend of the future. One example involved the movement of vinyl chloride monomer (VCM) inside Texas by Dow Chemical, Shintech and OxyChem. The other example outlined an agreement between Monsanto and Solutia for shipments of phosphorus from Asia, across the US and out of the port of New Orleans to Brazil.

Sims noted that antitrust will always be a concern in such deals but said each case requires separate review. Both of his examples received review and passed the tests for competitive behaviour. And each example resulted in a number of benefits for the chemical shippers - including cost savings.

Deavenport warned that C-commerce will require the sharing of information and process visibility along the entire supply chain. But he said the payoff for the right information technology collaborations will be increased efficiency and higher margins.

He cited academic business research showing how the leaders in logistics integration outperform their average competitors in many ways.

By: Gary Taylor
+1 713 525 2653

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