Chem companies focus on supply chain resiliency in aftermath of global pandemic

HOUSTON (ICIS)–Chemical companies have had to become more agile and proactive in managing supply chains during the coronavirus pandemic, a panel of executives said during the Reuters Petrochemical Supply Chain and Logistics USA 2021 webinar.

On the panel discussing how the industry moves forward from a global pandemic were Walter Sanchez, general manager, Global Supply Chain, ChevronPhillips Chemical; Michael Vogt, director Logistics Procurement, BASF Corp; and Annemie Wagemans, director, Global Supply Chain Business Transformation, Chemours.

Each shared examples of how their companies used the pandemic and the other natural disasters that impacted production and logistics to find ways to improve and make their supply chains more resilient.

“The fact is, we took this as an opportunity to be more agile, so the idea of having an agile mindset in everything we did became very important to us,” Sanchez said.

He said ChevronPhillips Chemical initiated a new program that included innovation and digitisation efforts that increased the visibility of where cargoes and products were at any given time, all of which was combined with a cultural evolution effort around nurturing behaviours of the employees.

“I am a very strong advocate that the employee experience has to be one of the leading catalysts for the changes that lie ahead,” Sanchez said. “Staying in touch with your teams – and listening. Taking the time to sit down and listen to the things that resonate with the employee is extremely important.”

Vogt spoke about the Triple-A supply chain model, which stands for agility, adaptability, and alignment. It is not a new concept, but it became even more relevant during the events of the past 18 months.

“Moving forward from a global pandemic, we thought about a couple of things – but first was looking at supply-chain resiliency,” Vogt said. “Being that Triple-A supply chain – agile, adaptable, and aligned with suppliers’ and customers’ needs. If you can do all of those things, you are really getting yourself and your supply chain ahead.”

Vogt noted that a change he has seen is in the perception of inventories.

“For a long time in supply chains, inventory has been considered an evil,” he said, adding that this is not the case anymore.

He used the automotive original equipment manufacturer (OEM)market as an example.

“Auto industry OEMs were traditionally against building inventory in the past, and now we are seeing articles being published about having strategic stockpiles of things like microchips and certain other materials, because it slowed down their manufacturing considerably because of not having chips.”

Wagemans said that at Chemours, they are planning for disruptions to be the new normal.

“Whether it is a vessel blocking the Suez Canal, or winter storms in the US or trade wars coming on or COVID[-19] – they all happen more and more frequently,” she said. “We are living in a new world and we need to change our way of working.”

She also pointed to the benefits of having proactive, more agile supply chains.

“I always liked the expression, ‘Let us not wait until the storm passes, but learn how to dance in the rain.’ Agility makes it easier for us to adapt.”

The panel said better planning and communication will help when dealing with logistical issues.

“Looking forward, often we need to have resiliency with our transportation,” Vogt said, adding that he thinks transportation issues will improve as providers are able to hire more employees.

“It will ultimately improve, but how long will it take? I think a little bit depends on the consumers,” he said. “How quick do they move from buying goods – which is what they have been doing throughout the pandemic – to enjoying services again?”

But he said that ultimately, companies have to prepare for tightness in transportation markets.

“You have to have a good strategy in place so that when the next crisis comes that you have a plan in place and you have the right partners in your portfolio,” he said.

Sanchez said ChevronPhillips Chemical is working to improve communication with its vendors.

An example was that his company used to sometimes give seven-day rolling forecasts on what to expect.

“Now, in some instances, we are giving carriers a 90-day forecast on what we think the demand for bookings, for containers, globally will be – and all of a sudden that partnership becomes stronger the better we get at forecasting. They know they need to secure the equipment and the space, so that is one way to get better,” he said.

At Chemours, Wagemans said the company has been changing the way it operates and that the pandemic only accelerated those changes.

“One of the main reasons is that being agile makes it easier to anticipate things,” she said. “It is easier to incorporate changes at any stage. You work with innovations, and the work is split into smaller pieces, which gives you more flexibility to last-minute changes.”

She said the company has also seen a boost in productivity.

“Because by working agile there is a more focused and collaborative approach,” she said. “We have made cross-functional teams and we see they feel much more empowered because we see a greater sense of autonomy which makes them much more productive.”