7 Procurement Problems in the Chemical Industry

Procurement is at the heart of any large organization. Finding you the raw materials needed for the very best price is what keeps your business ticking over. In the complex and nuanced world of the chemical industry, suppliers who tick all the boxes are few and far between. Here are 7 common procurement problems faced in the chemical industry:

1. More Competition and Greater Complexity

You’re not scared of the competition but neither do you want them to have the upper hand when it comes to procuring the best source for chemicals. The industry is complicated and demanding and so are your orders. You need a supplier who’s going to fully understand your complex needs and meet them every single time.

2. Going Over Budget

It’s far easier to go over budget than we would care to admit. Overspends can have immediate and serious consequences, impacting credit lines, throwing off profit projections and halting further procurement in its tracks. While often the situation can be remedied, it’s important to make the procurement process streamlined and efficient.

The issue generally boils down to a lack of joined up communication within the organization rather than careless spending activity. More linked up internal communication, real time accounting software and regular budgetary updates should quickly remedy the issue.

3. Need for Supply Chain Transparency

Your standards are high, and you demand that exact same quality from your suppliers. Finding a supply chain that offers you complete transparency from source all the way through to delivery is the level you’re aiming for, anything less won’t do.

The challenge comes when you find a supplier who offers you this level of supply chain transparency but lacks some of the other fundamental business practices that you need alongside, such as timely dispatches and flexible ordering.

4. Need a Greater Choice in Raw Materials

When your chemical needs are complex and varied, you need to be able to buy raw materials that cover an array of uses. When a trusted supplier can’t offer you that choice, you know it’s time to make a switch.

As your business grows so do your demands and you need your sourcing to keep up. To fail will impact negatively on your name and your business.

5. Damaged Goods

You wouldn’t accept a damaged order in your personal life, so why should your business? Of course these things can happen and a one-off misadventure you may feel compelled to gloss over, but repeated orders that arrive damaged spell trouble.

Most chemicals, by their nature, are highly toxic and a supplier that exposes your workforce to unnecessary risk will soon find their name off your procurement books.

6. Shipping Logistics

Once your order is placed, you need to be able to trust that it will arrive in a timely fashion. The logistics, the courier, that’s down to your supplier. You’ve paid your side for the service, it’s up to your supplier to figure out the rest.

Having a supplier who takes your custom seriously is what you’re striving for. Someone who knows what well timed supplies mean to your company and who strives to live up to their delivery promises. You want to be able to track your order, you need flexibility and the option of fast-track service. You need your supplier to be every bit as flexible as your business.

7. Accidental Orders

Like an overspend, accidental ordering is generally in the ballpark of miscommunication. Software that allowed you to double up on an order or just simple, every day human error. How flexible are your suppliers when it comes to sending back orders made erroneously?

Take a closer look at your procurement lines and figure out how the error occurred. Mistakes do happen but too many mistakes cost money. While your supplier might be happy for you to return a first item ordered in error, the same might not be said for a second or third.

 

AG Scientific exists to be your sourcing ally in limitless scientific discovery.

It might be a lot to ask from any sourcing company but thankfully, there is an organization that can manage all your complex needs and sourcing requirements. Talk to AG Scientific today and find out how they can help you get the chemicals you need on time, every time. Their procurement professionals are ready to assist and help navigate around these common procurement problems.

 

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