Market outlook: Green is go for IMCD

15 March 2013 09:27  [Source: ICB]

Supply chain collaboration and resulting optimisation have led to a successful campaign of cutting emissions for IMCD. Following success in the Netherlands and Italy, it is now expanding the Lean and Green concept elsewhere

Collaboration in the supply chain is not a new concept but is still regarded by some with a certain degree of suspicion and reluctance. But for specialty chemical distributor IMCD Group, collaboration with selected logistics service providers has resulted in many benefits for both parties.


 IMCD's Smit with the Connekt Star award

Stan Bijsterveld, IMCD's supply chain director, says: "The significant advancement that we and our partners have witnessed has proved that mutual trust and transparency are essential for a successful and consolidated business partnership."

IMCD decided to shift its logistics operations around centralised purchasing and local logistics managers. Bijsterveld says that up until five years ago, IMCD's "buy and build" strategy meant that logistics was a local affair that received minimal consideration.

Several projects were launched, aimed at creating one central warehouse per country, and have been completed in various countries throughout Europe.

"In each of these countries, we have moved from several and often outdated facilities to a central, state-of-the-art warehouse which is in line with all health, safety, environment and quality (HSEQ) storage standards, not only for dangerous goods but also for food and pharmaceutical ingredients," says Bijsterveld.

It would be obvious to assume that consolidating IMCD's activities would result in less business for a logistics service provider, but Bijsterveld says this has not been the case. He maintains that the ability to offer principal suppliers and customers a fast response and simplified logistics solutions has only led to more business and projects in the pipeline for both.

It is not just profitability that has benefited from process optimisation. IMCD says that during the consolidation process a proven ability to cut its carbon dioxide (CO2) emissions by 20% has gained valuable industry recognition.

The distributor remains the first, and so far the only, distributor to win the Lean and Green awards. These awards are part of the Dutch Sustainable Logistics programme, run by Connekt, an independent network of companies and authorities working towards a sustainable improvement in mobility.

Connekt approached IMCD in November 2010 asking for a commitment to reduce CO2 emissions by 20% within five years. The project was not without its difficulties, one of which was explaining the distributor's role in the supply chain, particularly as most other candidates were chemical producers or logistics providers.

While analysing product flows for the project, supply chain manager Guido Smit realised that by merging certain warehouses, IMCD could create larger, consolidated inbound flows. This subsequently led to another opportunity to consolidate outbound flows, resulting in lower CO2 emissions per tonne-km and a lower freight cost per tonne.

The first two awards were won in the Netherlands. The first was awarded in May 2011, followed in 2012 by a Star award - given to companies that prove they have reached their CO2 emission targets. A third award followed late last year in Italy.

For the first award, IMCD was shown to have cut CO2 emissions in Benelux by 20.94% in 2008-2013. This was achieved by consolidating several sites in Belgium and the Netherlands into one central location, limiting any overlap in stock, eliminating unnecessary movements between warehouses, and enabling the bundling of shipments to customers.

The Star award was given in recognition of reaching its target of reducing emissions by 20.71%. IMCD says that out of 250 companies that won the Lean and Green award in 2011, only 16 won the Star.

In Italy, the company estimates it has lowered CO2 emissions by 25%. After discovering that a large number of customers were ordering multiple shipments per week, IMCD reduced this to one or two per week, also bundling shipments where possible.

The group is working on expanding the Lean and Green concept into other countries, such as Spain, Sweden and Germany.

Bijsterveld is adamant that supply chain collaboration can have an enormous and positive impact. "Improved communication and integration inevitably results in better service while a more efficient process produces less waste, reduces operating costs and generates more profit," he states.

IMCD's success in winning the Lean and Green awards is also a prime example of how collaboration can achieve results that go beyond the financial.

By: Elaine Burridge
+44 20 8652 3214

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