5 Best Practices in Chemical Logistics and How to Implement Them

Mike ChallmanFor chemical manufacturers, knowing what you don’t know about your transportation process can be your greatest asset. But many logistics customers are reluctant to admit their shortcomings. One of the biggest weaknesses we see in new clients is a lack of control over the shipping process, the data and the decision points.

That’s why it’s critical for chemical companies to work with third-party logistics providers that are able to develop customized programs tailored to their industry. Following are the key practices we’ve identified for chemical logistics success.

5 best practices for chemical logistics

  1. Supply Chain Visibility – Chemical companies need to know how their products are being handled at every stage of the shipping process.
  1. Effective Information Management – A robust reporting system is essential, but too much raw data can be overwhelming. Information should be communicated in a meaningful and engaging way.
  1. Active Participation in Supply Chain Issues by Multiple Shipper Departments – To do the best work, everyone from production to customer services to sales needs to be plugged into discussions.
  1. Current Market Intelligence – An effective two-pronged approach involves staying abreast of both the overall transportation market (e.g., knowing carrier rates and who the players are in your areas) and the chemical-specific market (e.g., knowing the current rules for shipping hazardous materials).
  1. Strong Carrier Relationships – Transparency and regular, planned communication is key to strengthening relationships among all parties.

4 Tips for implementing these practices

While it’s essential to identify best practices, you won’t benefit from them unless you formulate a plan to implement and stick to them. These four tactics can help:

  1. Find the right technology. While technology such as transportation management systems, benchmarking tools and reporting tools may be abundant, not all of it is suited to the chemical shipper. And it’s especially dangerous to rely on a manual system of spreadsheets, sticky notes and email. If you’re putting your faith in tribal supply chain knowledge, your first priority should be capturing that information using the appropriate technology for chemical logistics.
  1. Implement a structured and disciplined engagement strategy between your key departments and your 3PL. Groups such as production, customer service, sales, marketing and executives often work in silos so it’s important to get them talking not only to your 3PL, but also to one another to help them understand how they’re connected. The 3PL should take the initiative to create a schedule and agenda for key meetings with you and your departments.

We recommend three types of meetings between stakeholders:

–  Monthly operations conference calls to talk about tactical issues like what’s happening this month, whether there are any campaigns coming up, and how to approach an upcoming season of bad weather.

–  Quarterly business reviews to discuss the programs being worked on together to improve the process and what the metrics that have been gathered tell us. These strategic meetings should be held in person and be rotated from the 3PL headquarters to your headquarters to regional offices. This gives the stakeholders a chance to hear from individuals who might not speak up on conference calls.

–  Semi-annual or annual meetings to address the overall program and find out whether it’s meeting your expectations and if you have additional needs.

When we began working with Pilot Chemical, the company’s various departments were isolated and unharmonious. Actively participating in supply chain meetings helped create a culture of collaboration where every department understands the impact their decisions have on the company as a whole. This engagement strategy paved the way for Pilot to implement all five of the best practices outlined above.

  1. Create a robust and active information management program. Determine which key performance measures need to be tracked. There’s lots of stuff you can measure, but not everything you can measure is meaningful.
  1. Utilize a flexible engagement strategy. A canned solution may be adequate when you’re shipping boxes of nontoxic goods, but when you’re dealing with chemicals, you need a customized solution that meets your requirements.

This tactic is key for creating supply chain visibility — both outbound and inbound. In fact, gaining control of inbound transportation is a huge opportunity but also an enormous challenge. Not all manufacturers are willing or able to do so, but Emerald Performance Materials is bravely taking the step this year, something that wouldn’t be possible if the company didn’t already have visibility with its outbound program.

When it comes to shipping hazardous chemicals, off-the-shelf logistics solutions just won’t do. Chemical manufacturers evaluating a 3PL should look for those that offer proprietary solutions for chemical logistics. And together you can build those customized solutions by starting with these five best practices.

 

Mike Challman leads all of ChemLogix (a division of CLX Logistics) Managed Services in North America, including freight management operations; benchmarks & bids; carrier programs; dedicated truck & rail fleet operations; and brokerage services. His multifaceted background includes operations, customer service, solution development, project management and continuous improvement programs.

Prior to joining CLX Logistics, Challman spent nearly 25 years in the transportation industry.  He has held leadership positions with several motor carriers and third party logistics companies.  A decorated Air Force veteran, Challman earned his Bachelor of Science degree at the U.S. Air Force Academy and holds a Master’s of Business Administration from Oklahoma City University.