Supply Chain Reliability Needs Become Clearer
Confusion is amplifying the issues around supply chain reliability, and that doesn’t need to be the norm for converters.
Recent Events Define Future Supply Chain Musts
Left in the wake of some of the most severe disruptions seen to date by the polymers industry are lessons that can empower greater risk mitigation measures throughout supply chains. That way, unforeseen events wouldn’t necessarily mean future polyethylene supply disruptions.
'Risk Appetites’ Influence Reliability Shopping List
The COVID-19 pandemic, Texas winter storms, and other world events have exposed weaknesses that require fixes to avoid long-term risks to industry performance.
Challenges highlighted by such polyethylene supply reliability disruptions include:
- Increased vulnerability and volatility by depending on single-source supply chains
- Increased labor, supply, and transit costs due to restricted supply and increased demand
- The inability to predict accurate lead times and/or significantly longer lead times due to disruptive events and related supply/demand imbalances.
Gartner offers several factors for any business to consider in successfully securing your polyethylene supply. In creating a reliability strategy, the consulting firm recommends that enterprises carefully consider:
- Its “risk appetite”—Simply put, that’s the level of risk an organization can absorb.1
- Capabilities of critical partners—Find out if they are weakened by current conditions.2
- What needs protection—That can be seen in terms of what needs to be protected (like market access) and what must be protected against (like increased costs).3
- Trade-off decisions—One example of a trade-off decision is upside versus risk. Which would more greatly deplete your resources and impact your value?4
Reliability Benefits: A Hypothetical Example
Shell Polymers is designing, building, and organizing its new polyethylene plant in Monaca, Pennsylvania with these supply risk roadblocks in mind, to make it a logical and dependable strategic supplier for converters looking for reliable supply. The plant offers an optimal location within 700 miles of most North American polyethylene buyers. Hypothetically, this could save converters from having their working capital stalled in the supply chain through various advantages.
For example, let's say that Converter X is located in Columbus, OH, approximately 150 miles away from Shell Polymers’ location in Monaca. They previously sourced all their resins from Corpus Christi, TX, 1,175 miles away from their facility. This location proximity enables converters to benefit from reduced transportation time, reduced supply chain risk, and greater supply security, especially during times when supply is tight and demand is high.
Preparations Key To Manage Problems
Converter X’s supply has various transit options and the ability to utilize the best one for any given situation. If there are unexpected and sudden rail issues, Shell Polymers has the ability to quickly mitigate those challenges:
- We can topload our bulk trucks within 20 minutes.
- We have developed a drop/swap model onsite to enable drivers to be able to quickly and safely pick up product to maximize time on the road. Why is this significant? This attracts drivers and enhances our reliability.
Options like this let Converter X rest easy, knowing if circumstances make one delivery option less than optimal, another route is ready to go.
Converter X doesn’t need to keep a close eye on the weather, either: The Monaca facility is designed to operate efficiently in all types of weather and to mitigate production disruptions. The facility is designed with sustained freeze resistance down to a steady -27℉ over several days to keep pipes from freezing and bursting, and the site is raised to protect operations from floods. And, of course, there’s less weather to worry about, with the close distance from our plant to Converter X.
Converters Need Communication & (Real)ationships
The relationship between a polymer supplier and converter can’t be simply transactional. Suppliers must be vested in the success of their customers. Shell Polymers sees the value in establishing and building (Real)ationships with its clients. We will listen to, collaborate with, and look out for our customers in everything we do, every day, to enable positive outcomes.
For example, perhaps Procurement Manager A has expressed concern over experiencing a lack of updates on where their resins are. When ordering from Shell Polymers, they feel confident learning Converter X has a designated Customer Relationship Coordinator (CRC) to actively monitor their account and alert them so the converter can act accordingly and minimize disruptions.
This helps Converter X maximize production efficiency by enabling more accurate forecasting. That empowers proactive actions that keep timelines on track, as opposed to reactive actions that add onto timelines and disrupt productivity. In the end, Converter X can confidently run their business and serve their customers knowing that they have a strategic supplier that preempts problems by offering a personal, professional experience in every engagement.
Converters Need a One-Stop-Shop for Reliability
Having a reliable supply chain is about solving problems proactively, so converters can enable continuity and plan accordingly. Any converter can use a new supplier that helps mitigate risk and maximize certainty, especially one that addresses many risks and offers various options. Shell Polymers offers a strategic location and transparency-enabling technologies that are assets for converters wanting to optimize and build reliability into their supply chains, so they can focus on what they do best.