Strategic Chemical Logistics in Global Markets.

The chemical industry and its management have changed a lot during the past 15 years; most importantly, generational change on decision maker level. Chemistry, finance, marketing have been represented through professionals on top management level - except Logistics.

Logistics, as a business tool, is often underrated when it comes to strategies for regions and markets. The question of the past was: How to participate in the fast growing markets like China? Tomorrow’s question will be: How to avoid endangering the whole company and still to participate in world markets? Today’s question is: How to organise production and distribution, i.e. should we set-up more production sites e.g. in Asia or in Eastern Europe or should we centralise more? In most instances the answers will be: too many production sites, too many “islandsolutions”, too many small units to manage efficiently. Logistics will allow you to streamline your business, strengthen your home base and concentrate on being close to your customers and markets. With harmonized production cycles, transparent order processing and integrated logistics you will achieve your business objectives.

Regional Logistics

In Asia, Singapore is the best choice as ahub to cover Asia Pacific and the Indian Subcontinent. Third party logistics providers fulfil all the needs of chemical companies from real-time inventory reporting to same day order execution. The port offers high frequency of shipping services, provides the best command of English language in Asia, and follows high standards in handling hazardous goods. Not by surprise, major international chemical companies as well as car manufacturers have chosen for Singapore.

Europe suffers from too much road traffic. The use of waterways and short sea shipping will only become alternative modes of transport bringing logistics costs down, if planning and forecasting improve significantly. For most companies the choice to develop a logistics solution on a green field does not exist. However, Hamburg, as the fastest growing port and as a gateway to and from Eastern Europe, is more than a second best location choice.

The American market is still divided in North and South. From a European shippers’ perspective there is no sensible hub covering all areas. The lack of harmonization of railways is still a hurdle for country wide distribution networks by rail. Road transport is still inefficient due to payload restrictions and equipment being deployed. High safety standards in the US are a good precondition for high-quality chemical logistics.

Regional Location Strategy for Your Business

With good regional logistics concepts you can participate in global markets and avoid proliferation of know-how which is the main problem connected to Globalisation. The new industrial giant will be China. The Chinese have learned fasterthen any other economy before in recent history and they have started to leapfrog development stages of economies: buying companies and businesses (like Siemens Mobile Phone or IBM Personal Computer), understanding branding, dominating market segments.

The concept has to be: Integrate logistics on top management level and manage your supply chain needs by starting from your customers and integrate backwards to your suppliers - taking regional logistics aspect into account.