How to Solve Procurement Problems in Chemical Supply Chains

Procurement officers around the world agree that chemical supply chains tend to have the most disruptions, delays, and bottlenecks. The sheer complexity of chemical supply chains can be dialed down to various factors. However, there are ways to solve these common supply chain bottlenecks.

Complexity in Chemical Supply Chains – A Brief Study

Trying to understand how we at Trademo can help companies that are in the chemical supply chain better, we got in touch with Agatha, who works as a Procurement Specialist at a mid-sized pharmaceutical company(unnamed on request).

They sell a popular off-the-shelf drug manufactured using 5 materials all of which have to be imported and delivered to their manufacturing center. Out of these 5 materials, 3 are prepared chemicals and 2 are naturally occurring minerals.

As per Agatha, procuring all of these raw materials has been a constant challenge. The 3 chemicals required come from 3 different countries creating challenges for a constant delivery delay within their supply chains. In addition, the price fluctuations of chemicals can often stress the company’s profit margins.

For mineral X, Agatha is in touch with a multitude of suppliers from various parts of the world. However, most of them can’t provide the quality they need. Mineral Y, on the other hand, is hard to find with the pharmaceutical organization being able to procure it from just a single supplier halfway around the world.

Finding Raw Materials in a Single Region

Agatha’s first problem is the fact that she has to procure three of the drug’s raw materials from different regions. This approach increases the cost of procurement and is likely to face more delays due to the fact that she has to depend on three different trade lanes.

What Agatha really needs is the ability to procure two or more of the chemicals from a single region. She needs access to a region or country’s suppliers and visibility of its supply chains.

Solving Quality Control with Competitive Analysis

Mineral X has a quality problem and a multitude of small-time suppliers who are unable to provide the quality Agatha’s pharmaceutical company needs. However, the competitors for the drug have an easier time with quality control.

Despite the multitude of suppliers, Agatha needs to find a small subset of high-quality suppliers for Mineral X. A complete supply chain analysis of the competitor’s supply chains will help Agatha identify the suppliers they use and try to procure from them instead ensuring more effective quality control.

Discovering New Trading Partners for Procurement

Mineral Y is hard to procure. In fact, due to a reliance on word of mouth, it seems that Agatha is stuck with a single supplier who can no longer provide the quantity her organization needs.

However, Mineral Y does have more suppliers around the world. Unfortunately, Agatha doesn’t know is who they are and where they operate. She needs the ability to discover new suppliers and potential long-term trading partners conveniently.

How Supply Chain Data & Intelligence Can Help

All of Agatha’s problems have a single solution. Access to supply chain data will help Agatha find and discover new suppliers, analyze her competitor’s supply chain, and find local suppliers with proximity search. All of this will help her make the company’s supply chains increase operational resilience.

Due to the advancements in AI/ML technologies, supply chain data can be collected and compiled in an accessible and readable format. We, at Trademo, achieve this with Intel. Trademo’s Intel helps you find import-export data for 100 million+ shipments, access to contacts for over 10 million global buyers/suppliers, and data-driven supply chain insights to improve your chemical supply chain.