Three methods to securing a resilient provide chain
The previous 24-plus months have been difficult throughout nearly each business and particularly exhausting on provide chains. From the COVID-19 pandemic to uncooked materials shortages, from port backups and rail disruptions to excessive climate and geopolitical occasions, from manufacturing facility shutdowns to labor shortages—we now have not seen a confluence of disruptive forces like this in over a quarter-century. The challenges posed lately have served as a litmus check for contemporary provide chains. They’ve additionally required provide chain professionals to be immensely adaptable and resilient.
It compelled our firm, Univar Options, to take a brand new take a look at our provide chain methods and tackle vulnerabilities in our extremely advanced provide networks. Univar Options supplies an important hyperlink within the chemical and meals ingredient provide chains. Because the third-largest chemical and substances distributor on the planet, provide chain operations are the core of what we do. Univar has about 600 distribution amenities the world over and a non-public fleet of greater than 3,700 tractors, trailers, and tankers in addition to 2,500 rail vehicles and 90 million gallons of bulk storage capability. Univar Options works with over 1,300 provide companions to attach with prospects in a number of industrial and client finish markets, together with coating and adhesives, cleansing, chemical manufacturing, magnificence and private care, and meals substances.
Our prospects depend on us to assist preserve communities wholesome, fed, clear, and protected. We attempt to do what it takes within the second to fulfill prospects. Regardless of the dimensions and scale of our operations, the turbulence of the previous two years has been a real check of our group’s objective. It compelled us to take a brand new take a look at our provide chain methods and tackle vulnerabilities in our extremely advanced provide networks.
A resilient provide chain is one which is ready to soak up shocks with out interrupting provide to prospects. Attaining resiliency is not only about padding inventories. To make our provide chain extra resilient, Univar Options centered on three methods. We embraced expertise to enhance visibility and situation planning whereas additionally rising our inner logistics and operational capabilities and capacities. Most crucially, we prioritized the security, well being, and improvement of our workers. By sharing our story, I hope it is going to present some perception that can assist you mitigate dangers and overcome future disruptions.
1. Plan forward with the suitable expertise
The challenges which have occurred over the course of those previous few years have made it clear that disruptions within the provide chain typically comply with a series of occasions—versus a singular occasion. Climate occasions, manufacturing facility shutdowns, semiconductor shortages, and different materials shortages have all served as contributing components to the availability chain disruptions nonetheless at play at this time.
Corporations can handle their provide chains solely once they have a transparent image of every hyperlink. The one space the place Univar Options made vital progress in the course of the depths of the pandemic was in utilizing expertise to extend visibility and situation planning. Step one in undertaking this was migrating to a single, fashionable enterprise useful resource planning (ERP) system throughout the USA, Canada, and Mexico.
So far as data expertise goes, ERPs have been round for 25 to 30 years, so it’s possible you’ll be asking, “What’s the massive deal?” However chemical distribution is a enterprise that has grown up regionally and regionally, consisting of corporations that haven’t had the subtle software program instruments you see in bigger enterprises. So, transferring Univar Options onto a standard platform was a significant breakthrough. By connecting planning, buying, stock, gross sales, advertising, and finance features throughout the Americas, Univar Options can higher address adversity. When a buyer requirement modifications, the ERP helps us translate that sign all the way in which again to operations and decide how a lot materials we have to purchase and retailer.
In the course of the pandemic, for instance, regular sources of provide disappeared, and our prospects needed to get inventive. A few of our largest U.S. prospects started to supply merchandise from India for the primary time. However these merchandise have been shipped in bulk tankers in portions too giant for them to make use of suddenly. They didn’t know what to do with the additional stock and requested us to satisfy the tankers on the port, repackage the merchandise into smaller drums, after which ship them from coast to coast. Any extra product was then saved for future supply by Univar Options, a profit not accessible from most distributors. As we carried out these operations, our ERP system helped us perceive the fabric we had and the potential methods we may assist our prospects.
The corporate is additional constructing resilience within the provide community through the use of sensors—leveraging the web of issues—to trace and hint stock. Sensors present that further layer of visibility by capturing indicators to supply real-time knowledge and insights. All of this knowledge permits us to allocate product and stock the place it’s most wanted and efficient—a functionality particularly essential throughout instances of provide uncertainty.
We additionally used sensor expertise to allow a brand new characteristic that allowed us to reply to one among our prospects’ prime inquiries for our customer support staff: “The place’s my stuff?” The brand new expertise helped prospects observe their order standing no matter gross sales channel. We, after all, need to keep away from provide disruptions, however once they do happen, it’s essential to be clear and talk.
Univar Options has additionally invested in an automatic rescheduling instrument that acknowledges when a cargo goes to be delayed and notifies prospects. After we deliver collectively a centralized enterprise platform and digital instruments, we provide suppliers and prospects the transparency and self-service capabilities important at the moment.
2. Construct the correct mix of operations and logistics capabilities
As a chemical and substances distributor, it’s important to have the correct mix of operations and logistics capabilities to take care of the sudden. Resilience is all about saying “sure” when a buyer asks if we are able to ship a key commodity.
An instance may be discovered if one transportation mode is impacted by a piece stoppage, embargo, or different challenge. With these occurrences rising throughout provide chains, the impacts on important industrial commodities equivalent to chlorine, may be felt not solely by prospects but in addition by society as an entire. At Univar Options, we now have developed a versatile transportation mannequin that enables us to reply to capability and reliability points by diverting shipments to different modes of transportation. How? By pairing our personal fleet with devoted capability that we now have secured with widespread carriers. Previously few years, we now have pivoted to extra of a dedicated capability mannequin and that technique has been a boon to our enterprise.
Earlier than the pandemic, Univar Options, like many shippers, secured vehicles within the spot market. That technique works when there may be a whole lot of trucking capability. However when there’s a scarcity, it may well result in massive swings in pricing. Whenever you safe devoted capability with most well-liked suppliers, you may need to pay extra however you additionally acquire a measure of management over a pool of vehicles. Univar Options usually makes use of its personal fleet to serve prospects inside a 250-mile radius of our warehouses. We’ve got the flexibleness to ship our provider capability longer distances. And our transportation administration system connects with our provide chain companions to evaluate and analyze probably the most environment friendly option to transfer masses.
To enhance our capacity to ship merchandise shortly and safely the place and when they’re wanted, we proceed to put money into our logistics strengths. We’ve added warehouses (together with a brand new facility in British Columbia, Canada, scheduled to open later this 12 months), terminal tanks for bulk chemistries, and rail capability.
On the operations aspect, we’ve been including to our formulation and software improvement capabilities. Resilience means the flexibility to do no matter it takes within the second to fulfill a buyer. When sure chemical compounds and substances skilled shortages up to now two years, our lab companies groups have been in a position to work with prospects to reformulate their recipes with parts that have been accessible.
When a specialised paper product producer skilled an unexpected scarcity of its important provide of the uncooked materials sodium metabisulfite due to the extreme winter storm in Texas in 2021, Univar Options got here up with a customized resolution by figuring out a comparable materials, liquid sodium bisulfite, that wouldn’t compromise on security or high quality. We then found out the logistics of transferring the majority product into totes and delivered the liquid materials in file time to keep away from any manufacturing delays.
3. Put money into your individuals
On the coronary heart of our provide chain is our individuals, who join our producers with prospects they’ll’t effectively serve. We realized that in an effort to preserve our provide chains up and operating in the course of the early days of the pandemic, retaining the gifted provide chain professionals on workers was important. For that reason, each operational resolution that we made on the time was with the security and well-being of our workers in thoughts. We operated with a excessive diploma of empathy to make sure everybody stayed protected.
For instance, in the course of the pandemic, we had our customer support and gross sales assist groups work remotely. This not solely helped them keep wholesome but in addition helped our warehouse workers, drivers, and others who nonetheless wanted to enter our branches. They have been uncovered to fewer individuals, making it simpler to observe social distancing.
When the USA skilled a scarcity in hand sanitizer at the beginning of the pandemic, our technical groups stepped as much as formulate our personal sanitizer. Our packaging service groups assisted within the mission by packaging resolution in personal-size bottles that have been distributed to drivers and operations groups.
A part of our success in the course of the pandemic was that Univar Options has repeatedly invested within the coaching and training of its provide chain staff members. We supplemented our inner studying and improvement packages with third-party training companions. The pandemic additionally gave the corporate a possibility to regulate its operations to match the most recent business finest practices. We’ve got taken legacy provide and demand planning processes, which have been developed within the early 2000s, and supplemented them with the most recent considering to raise the group’s talents.
Univar Options is now wrapping up the second 12 months of a month-to-month coaching program for operations leaders to higher perceive the instruments we now have and easy methods to harness them. We’ve additionally sponsored 10 provide chain professionals to get skilled certifications in provide chain administration.
Expertise administration is commonly seen as an HR duty, nevertheless it ought to be seen as a enterprise course of. Development and improvement are more and more turning into key attributes in job satisfaction and, finally, worker retention. Amid speedy innovation and digitization, strategic workforce planning is essential to establishing future resilience.
The work continues
Companies have needed to climate vital provide chain challenges up to now few years. Many have made vital progress of their efforts to beat disruptions, mitigate dangers, and construct resilience of their operations. Nonetheless, most nonetheless have vital work to do, as a current McKinsey survey revealed. The survey exhibits that many corporations are nonetheless struggling to search out sufficient provide chain expertise and nonetheless lack a transparent image of the dangers that lie of their provide community.
At Univar Options, our provide chain is an ever-evolving organism. It’s core to what we do. The key of success for a chemical distribution enterprise is managing complexity. Univar Options handles over 15,000 merchandise, a number of bundle sizes, and distinctive particular dealing with necessities, security, and high quality specs. Virtually each buyer has a novel set of necessities. We acknowledge that it’s our duty to supply the optimum technique to serve these wants. As Univar Options has demonstrated, community resilience requires constructing in your success and fixed enchancment of your provide community, guaranteeing that you’re ready for no matter comes your method.
