Leading players in the chemical industry could significantly increase their competitive advantage if they start leveraging logistics as well as other global industries do, according to new research commissioned by DHL, the world's leading logistics company.
DHL's whitepaper "Supply chain in the boardroom - 5 levers to boost a chemical company's bottom line" highlights opportunities to boost performance and overcome challenges such as commoditization by getting logistics onto boardroom agendas in the chemical industry.
According to the report, the five levers that can help chemical companies increase performance and competitiveness are: optimizing logistics costs, better inventory management to free up capital, smart investment in logistics assets, increased focus on end-to-end safety and security processes and differentiated logistics services.
"Logistics in the chemical industry is expected to run smoothly and reliably with senior executives usually only paying attention when something goes wrong and rarely regarding logistics as an opportunity," the report quoted Michael O'Hara, Global Head of Chemicals Sector, DHL Global Forwarding, as explaining.
With a worldwide sales value of Euro 3,000 billion, the chemical industry is one of the world's largest and most important sectors, generating international trade volumes above 700 million tons of freight annually.
The industry is exceptionally diverse with complex supply chains challenged by the variety of products, highly specialized transportation and storage requirements, and growing safety issues. With the ongoing globalization of the supplier and customer base, chemicals are fast becoming commodities and as a result, competitive advantages are getting harder to find, sais a DHL press release.
Nooruddin Chowdhury, Country Manager, DHL Global Forwarding Bangladesh said,
"It is essential that industries understand the benefits of a well-managed logistics and supply chain. This new research will help companies in the chemical sector re-assess and optimize their logistics operations," the press release quoted as saying.
To meet these challenges, the report urges senior management to change its perception and see logistics as a strategic asset rather than a transport and delivery service. Authors of the report - Prof. Dr. Thomas Krupp (Cologne University of Applied Sciences), Prof. Dr. Carsten Suntrop, (CMC? GmbH / European University of Applied Sciences) and Uwe Veres-Homm (Fraunhofer Center for Applied Research on Supply Chain Services SCS) - found that a holistic end-to-end approach to logistics can achieve: greater logistics value through cost optimization, increased supply chain liquidity, smart investments in logistics assets, standardized safety across the supply chain, and differentiated logistics services.