Chem firms should focus more on supply chains

11 June 2008 18:35  [Source: ICIS news]

HOUSTON (ICIS news)--With margins under pressure from rising energy and feedstock costs, chemical firms need to focus on making supply chains more efficient, a consultant said on Wednesday.

Garrett Gee, managing director at Bearing Point, a Pennsylvania-based management and technology consultant group, cited AMR Research's annual ranking of the top 25 US firms in supply chain excellence while speaking at a Houston logistics conference.

AMR's 2008 list includes Apple, Wal-Mart, Toyota and Anheuser Busch among the top firms.

"None of the chemical companies are ranked in the top 25," Gee said. "They just don't get it yet."

What chemical firms have not focused on yet is that improving the supply chain, particularly when it comes to truck carriers, is the "low-hanging fruit" of the business, Gee said.

"The chemical industry can definitely do a better job of collaborating with its value-chain partners," Gee said.

"Instead, they do what I call the immaculate reception," Gee added. "They do their thing and then they pass off to the next guy in the chain."

Gee said that would most likely be corrected if chemical companies had a chief operating officer or some equivalent to a supply chain top executive.

"There's no chief operating officer of the supply chain," Gee said. "No one person is responsible for it."

Gee said other industries have such executives.

"At Wal-Mart there's a senior vice president of supply chain," Gee said. "At Dell there's a senior vp of supply chain."

Gee added that chemical firms should expect more government regulations regarding hazardous chemicals, particularly those labelled as TIH, or toxic by inhalation.

Gee said the companies should work to streamline regulations into their logistic processes before the new regulations go into effect.

“Many of the truck drivers today are trying to reform themselves,” Gee said.

($1 = €0.65)

(Additional reporting by David Rosen)

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By: Lane Kelley
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