Unlike in other industry verticals, the chemical and petrochemical supply chains are not usually linear. They don’t often flow in a straightforward manner from raw material into a finished product. In the chemical sector, common flows are far more complex.
Visibility challenges for chemical sector supply chains
What makes chemical supply chains so complex? Here are some of the reasons (also illustrated in the diagram below):
- While materials flow downstream into finished products, often after many transformation stages, there are certain outputs that go back up the chain to re-enter the transformation process at an earlier stage.
- The segmentation of the delivery patterns to the market through direct sales or through distributors (themselves able to perform certain stages of transformation) is also a complexity that goes beyond what is seen in other industries, since products can be delivered in bulk, semi-bulk or in packed form, either direct to the customer or via a distributor.
- The distinction between hazardous and non-hazardous products at each stage generates specific constraints for the control of logistics and transport operations, depending on the state (gas, liquid or solid) of the product.
- The availability of infrastructure that can deliver intermodal is key. Needing to transport product in bulk or packed (FTL, LTL or parcel) format via vessel, rail, barge or road is specific to the chemical industry, only comparable to certain supply chains of the agro-food industry. When combined with lead-time requirements, this can become very complex.