Outsourcing Distribution
OUTSOURCING AND SOLE SOURCING help to define a new approach to distribution, but their application in the chemical industry is far from definitive. While gaining competitive advantage is an objective shared by these strategies, numerous variations are emerging to accommodate the idiosyncrasies of individual chemical companies and plants.
Change is being driven by market pressures such as globalization and a realization that, far from being a fringe activity, dis tribution dovetails with many corporate processes and making it more efficient can yield high returns. As a result, redesigning the distribution process now preoccupies many chemical companies. "They are all doing it," says Mat Swain, senior v.p./sales and marketing for tank truck carrier Bulk Materials Inc. (BMI; Cleveland).
This does not mean that the industry is engaged in a headlong rush to divest itself of all but a few core carriers and most established practices. As Swain says, the pace of change varies tremendously from company to company.
SCRAPPING. "Some companies have quite vocally told us that they are scrapping the core carrier partnership concept and are going back to a philosophy of seeking out the best transportation possible. They are using good old quality assurance," says Swain.
According to Peter Funke, director of marketing at Chemical Leaman Tank Lines (Exton, PA), approaches vary not only between companies but between business units within large corporations. Funke says the chemical industry has been slow to adopt new distribution concepts relative to industries such as retail and automotive. Now, much of the impetus is coming from the need to compete globally, he says.
A benchmarking study carried out by management consultants A.T. Kearney (New York) looks at the supply chain management of top U.S. chemical companies. It concludes that few …
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