BLOG

Chemical Supply Chain Rationalization: When More is not Always Merrier

Aug 3, 2017

Chemical procurement is getting increasingly sophisticated with the availability of multiple sources of supply dispersed across a wide geographic area. Also, each supplier’s offerings differ in terms of material, quality, packaging, and pricing. An effective way to simplify such a complex supply chain to ensure smooth flow of operations and generate cost savings is through supplier rationalization. By mapping the supply base to business needs from the perspective of risk, process cost, and sustainability, companies can use supplier rationalization to limit the number of suppliers to an optimal level.

Here’s a look at how chemical supply chain rationalization can help businesses:

Manageable Number of Suppliers

A number of processes are outsourced in the chemical industry, add to that a large number of suppliers, and it becomes a hassle to manage the supply chain. The supply chain rationalization process breaks down suppliers into different tiers in order of their importance to the buyer. By eliminating suppliers that do not provide strategic importance, valuable management and administrativeGet More Info time could be freed up. Limiting the number of suppliers also facilitates information sharing, accurate scheduling, and improved delivery performance.

Suppliers, Fight for Your Business

Complacency could lurk within the supplier’s organization once they become familiar with the purchasing company. Supply chain rationalization eliminates non-strategic and non-performing suppliers, so suppliers are always competing to provide the best value to win your business. This healthy competition also drives innovation and leads to improved service and efficiency.

Getting Suppliers Closer to the Business

Businesses are on the lookout to bring suppliers closer to them to meet the objective of cost control, risk reduction, and sustainability measures. Sourcing locally can help cut down the lengthy procurement process and speed up the production. The term “closer to the business” refers not only to the location but also their relationship. With improved spend visibility, businesses can identify their supplier’s product portfolio and look out for other items that can be bought from the trusted supplier to consolidate the purchase.

Supply chain rationalization is not all about cutting down on the number of suppliers. It’s about optimally managing the number of suppliers to achieve operational excellence. A manageable number of suppliers improves the possibilities of identifying process inefficiencies, leading to simplified procurement reports.

Want to know more the best procurement practices for optimizing your chemical supply chain?

Get More InfoRelated Articles:

Getting Down To Business

We are offering Free Trials to all our customers or prospects who have been impacted positively or negatively by Covid-19 and are looking to connect with prospect buyers immediately.

Contact us

Sourcing and Procurement Market Intelligence Services

Products and Tools

Featured

Services Overview

Category Market Intelligence

Supply Market Analysis

Low-Cost/Best-Cost Country Sourcing

Benchmarking

Spend Analysis

Cost Modeling and Should-Cost Analysis

Total Cost of Ownership (TCO) Analysis

Supplier Risk Analysis

Supply Chain Risk Assessment

Supplier Sustainability Assessment

Commodity Price Forecasting

Category Management

Supplier Negotiations

Contract Management

Procurement Store

Purchase Ready-to-use Reports

SEinsightsTM

Our Robust Procurement Platform

BizVibeTM

Suppliers and Buyers Marketplace

SUPPLY MARKET ANALYSIS FOR A METAL MANUFACTURING COMPANY HELPS ACHIEVE ANNUAL SAVINGS OF $15 MILLION

Industries

Industries Overview

Automotive and Tire

Banking, Financial Services and Insurance

Biotechnology, Pharmaceutical and Life Sciences

Chemicals

Energy

Food and Beverage

Industrial and Manufacturing

ICT, Media and Entertainment

Mining, Metals and Minerals

Retail and CPG

Transportation

INCREASING LOCAL PROCUREMENT BY 28% FOR A COMPANY IN THE METALS AND MINING INDUSTRY – A CASE STUDY BY SPENDEDGE

Resources

Featured

Resources Overview

COVID-19 Resources

Blogs

Case Studies

Whitepapers

Webinars

Press Releases and Media Mentions

5 KEY CORONAVIRUS RISK ASSESSMENT STRATEGIES TO OVERCOME HEALTHCARE SUPPLY CHAIN CHALLENGES

IDENTIFYING STRATEGIC PURCHASING PRACTICES FOR A COMPANY IN THE US FOOD SERVICE INDUSTRY | SPENDEDGE’S LATEST SUCCESS STORY

COVID-19

Featured

Overview

Buyers

Diagnostic Test Kit

Additional Resources
Contact

A LOOK INTO THE FUTURE OF THE FOOD AND BEVERAGE INDUSTRY AFTER THE COVID-19 PANDEMIC

Identifying the Top 100 Coronavirus (COVID-19) Test Kit Manufacturers Across Regions

Clients

Featured

Clients Overview

Who We Serve

Case Studies

SUPPLY CHAIN MANAGEMENT HELPS AN IMPORT AND EXPORT INDUSTRY CLIENT ENHANCE SUPPLY CHAIN VISIBILITY

REALIZING SAVINGS OF $15 MILLION IN PACKAGING SPEND FOR AN FMCG CLIENT – PACKAGING SOURCING STRATEGY

About Us

News

About SpendEdge
Why SpendEdge?
Vision, Mission and Values
Clients
Social Impact
Global Offices

Press Releases and Media Mentions

Upcoming Events & Webinars