Managing the Chemical Supply Chain

There are many benefits to partnering with a competent logistics provider to assist in managing your chemical supply chain, from access to the latest technologies, to penetration into new markets. According to a recent study conducted by Armstrong & Associates, seventy-three percent of Fortune 100 companies use third-party logistics providers.

In another recent study by Ernst & Young, LLP, eighty-nine percent of those companies who use a third party logistics provider feel that “logistics” is a “strategic, competitive advantage.” If you haven’t evaluated the potential return on investment of using a logistics provider like Rinchem, now may be the time to rethink your logistics strategy. The following are five key reasons why you may want to consider having Rinchem manage your chemical supply chain:

1. Elimination of stacked profit margins because of one overarching supply chain partner
Rinchem oversees the chemical supply chain from cradle to grave, replacing the many different transportation providers, warehouse providers, and other intermediaries who all take their “cut”. Rinchem acts as one, overarching entity to manage your logistics needs.

2. Economies of scale that enable shipment, asset, and network optimization
With changes in demand and seasonality of production, many companies find themselves with either poorly utilized warehousing and transportation assets, or urgent need for costly additional space and resources. Companies like Rinchem pool the inventories of many companies to smooth out fluctuations, providing you with cheaper storage and transportation because of the ability to better utilize assets. Because of our logistics expertise, we can also do more with less staff and often achieve efficiencies from the speed and capabilities of better inventory management systems and procedures.

3. Time/resources/capital freed up to focus upon core competencies
With a limited amount of capital for investment, companies must make important strategic decisions about where to augment competitive strengths. Having to worry about an inefficient or problematic inbound or outbound supply chain takes a company away from its core focus, which is to excel in the production of the product or service for which it was created in the first place. Ironically, once companies decide to outsource logistics and do it correctly, it may actually become a strategic competitive advantage because of access to best-in-class technologies, personnel, and know-how.

4. More widely dispersed warehouse/ transport coverage, enabling fast, cost-effective shipments
Limitation of resources often necessitate that a corporation focus resources on a few geographic areas where the greatest return on investment exists. As a corporation grows, however, it looks to new geographies to expand into. Instead of building an expensive logistics infrastructure in these new areas before picking up enough customers to pay for it, many companies choose to utilize a third-party logistics provider like Rinchem to inexpensively penetrate new markets at a lower risk to “test the waters” before investing in expensive warehouses, licensing, and personnel.

5. Supply chain visibility that leads adaptability and a decrease in safety stock and spoilage
The final reason to consider outsourcing elements of your chemical supply chain may, in fact, be the most important. Visibility is a critical element to be able to respond to changes in demand and quickly adapt your supply chain to potential problems or bottlenecks. Rinchem’s Chem-Star ® Inventory Management System and its GPS tracking capabilities allow upstream and downstream visibility into swings in demand, inventory expiration, lead times, and supply chain execution.

To learn more about how you can leverage Rinchem’s chemical supply chain management expertise, please contact your local sales representative or contact the Rinchem corporate sales hotline at 505-998-4119.