Joe Kelly, Shell Polymers Manager of Supply Chain Operations, talks about what we can learn from Carvana
Carvana took away the need to visit a nearby car lot—completely overcoming the location hurdle in the car buying process. At Shell Polymers, we’re taking inspiration from the car seller and upending the idea of where a polyethylene supplier is located.
An old adage in the real estate business is “location, location, location.” But location is just as important in other industries. Sometimes it’s a positive; other times a negative.
One industry where location has historically been a factor is auto sales, particularly used car sales. In the old days, you pretty much had only your local inventory to choose from, and the sale required a trip to wherever the seller was. Also, the industry had a reputation for shady salespeople and pricing that was confusing and a little too negotiable.
In the last decade, online auto sales have taken off, addressing some customer pain points, but not all, since most online sales still involve a trip to the car lot. Sure, some dealers move cars from lot to lot, but that still requires pickup and extra fees. And some offer delivery, but customers have to pay through the nose for that privilege.
Enter Carvana, and a whole new car buying experience. Buying a car completely online from Carvana frees the buyer from ever having to visit a car dealer again.
Carvana's mission, according to their website, is to change the way people buy cars by providing customers a car-buying solution that is fun, fast, fair and powered by technology. And Carvana’s innovative car vending machines are a big part of that mission. They eliminate the need to visit a car lot, and make picking up your car fun.
To pick-up a purchased vehicle, the customer visits a nearby machine, drops a ceremonial coin into the coin slot to activate the automated vehicle delivery system, then drives away with the car. If there’s no vending machine nearby, Carvana delivers it to the buyer’s door. Location issue solved.
How This Fresh Thinking Relates to Shell Polymers
As we prepare to enter the PE industry, Shell Polymers is upending the idea of where a polymers supplier is located, which traditionally was the Gulf Coast. But like Carvana, we made a concerted effort not to do things just because that’s how they’ve always been done.
First, we started with data analysis and found that customers within 7 days’ transit had less variability in their rail transit time compared to those within 14-21 days. In other words, a longer rail transit resulted in a more inconsistent delivery time.
This research and talks with converters clearly demonstrated that the traditional location for polymers suppliers could cause serious converter headaches, which is why we decided to build in Western Pennsylvania, within 700 miles of the majority of US converters.
With our location, we’re able to offer logistical advantages and flexibility, while also bringing cutting-edge technological innovation closer to where customers need it. Bonus points that centrally located converters can visit our plant and work with technical experts in our innovation center—all in the span of a day!
Logistically, our location also means a reliable polyethylene supply that is relatively safe from natural disasters, though we recognize that there can be an occasional snow or ice event during those chilly Northeast winters.
To help combat the occasional weather-related impact, we went the extra mile to make sure our plant is able to withstand harsh elements. This involved building a co-generation unit—with three gas turbine generators, three heat recovery units, and two steam turbine generators—that generates all the plant’s power, allowing it to be 100% self-sufficient and isolate it if there is a problem in the grid, reducing risk and making our power source more reliable.
We Went Even Further
Like Carvana and its vending machines, we wanted to truly go above and beyond when it came to prioritizing location. That meant also building our SIT a short 20 miles outside of our site in Monaca, Pennsylvania.
Because of this opportune location, we have the flexibility of storing rail cars either at our Monaca site or at the SIT yard—in fact, we even have the capability to load trucks at the SIT yard!
This industry-leading trucking capability also extends to our Monaca site. Through our extensive on-site truck silo network, we can easily load PE via truck or railcar as needed. This truck silo loading is done via top-loaded gravity operation, which helps to preserve product quality by avoiding the use of blowers (the industry standard for PE truck shipments).
In summary, our Northeastern presence and overall proximity to customers makes it easier for us to respond to changing demands and optimize for a speedier and more consistent delivery time than most of our competitors—while, of course, maintaining high-quality, on-spec product.
Carvana has shown that creativity, technology and innovative ideas can combine to overcome even the most ingrained industry practices. At Shell Polymers, we used all three to create a modern solution that makes life better for converters.
Stay tuned for more featured brands. And if you’re a converter interested in finding out more about our new ways of working, send Shell Polymers an email at firstname.lastname@example.org to get in touch.
Note: Shell Polymers does not endorse, sponsor, or evaluate the services provided by any third-party companies mentioned in this advertisement. Shell Polymers does not have a business relationship with such third-party companies and any mention of third-party companies is done on an opinion-only basis.