Automation is now an integral part of many industrial sectors, from automotive to electronic manufacturers. Meanwhile, some businesses, such as those in the construction sector, are lagging behind with older technologies. The chemical manufacturing industry falls somewhere in between, with many companies still teetering on the brink of integrating digital automation into their systems.
This means that there’s room for improvement. There are many benefits to be had by automating various aspects of the chemical manufacturing supply chain, such as significantly improving efficiency and productivity, ultimately saving time and money. Automation can also make the supply chain more precise, agile and flexible in its response to complex market dynamics, so it’s easy to see why so many industries rely on it.
The Chemical Manufacturing Supply Chain Explained
The chemical manufacturing supply chain is simply a series of processes that suppliers and manufacturers have to go through in order to distribute a product from concept to end-user. The supply chain is essential to the operations of chemical manufacturing companies. As well as providing logistical support and a network of suppliers, it also provides important information, like labeling and tracking protocols for different products.
However, this network can only operate smoothly if there is proper coordination. To ensure that your supply chain is running efficiently, the following must be established:
- Logistics management
- Information or data management
- A strong communication network
- Network of suppliers
- Storage and transportation
Inventory Reserves
Chemical manufacturing companies typically hold specific amounts of supplies that they keep listed in an inventory. This allows them to track which products are low in stock, giving them time to replenish their stores. New batches of supplies are usually ordered several months in advance, in order to avoid delivery delays or supply chain stoppages.
However, sometimes these things can’t be avoided. When that’s the case, having a good inventory reserve for raw materials, chemical precursors, and replacement components is a good idea because it helps prevent unnecessary shutdowns if there’s a delay in supply. It’s important to remember, though, that not all materials can be stored for a long time. Therefore, sometimes delays in the supply chain can significantly push back productivity.
Customised Orders
Another factor affecting a chemical manufacturing supply chain is customised orders. If you’re ordering a specialised replacement component, whether it’s for a machine or chemical precursor, it will often need to be customised so that it meets your exact requirements. This could take days, or even weeks, to produce.
Possible causes of delay include transportation risks, such as spillage and regulatory hurdles. Additionally, if a raw material, chemical ingredient, or replacement part is ordered from abroad, deliveries have to go through border regulations and custom duties.
End-users
Before any manufactured product is brought to the end-user or buyer, it has undergone several steps in the supply chain. In the case of chemical manufacturing, the end users of the products – whether raw materials or processed chemical ingredients – are typically other companies, like pharmaceutical agencies.
Other end-users of chemical products include individual households and institutions, like schools. For example, products like hydrochloric acid or isopropyl alcohol are readily available to the public, and can be bought from hardware stores and even supermarkets. Schools or universities may also require chemical products for practical experiments and research purposes.
A Brief History Of Industrial Supply Chains
In order to understand the chemical manufacturing supply chain and the automation changes it could benefit from, we must first understand the historical factors that led to its current state. This is pretty much a history of technological evolution. By tracing this evolution back through the decades, it’s clear to see how the systems in place for chemical manufacturing supply chains today are the direct result of four industrial revolutions:
- The First Industrial Revolution was a transitional period between 1760 and 1840 that saw a radical change in manufacturing processes, which went from cottage industries to factories. Central to this revolution was the steam engine, which mechanised the manufacturing process. At this time, supply chains were mainly composed of raw material suppliers, like coal miners.
- The Second Industrial Revolution dates between 1870 and 1914. It was marked by the start of the rapid standardisation of mass production and industrialisation. The internal combustion engine was also invented during this time, and it slowly started to replace the steam engine. Industries also began to use electricity. Supply chains became more advanced as one industrial sector became dependent on another for components and processed materials, such as steel.
- The Third Industrial Revolution began in 1969. It’s mainly characterised by the technological innovations on energy sources (including nuclear), electronics, and digital technology. These innovations are ongoing, though the supply chains are much more complex and multi-layered. For example, a mobile phone company is dependent on companies that manufacture printed circuit boards. In turn, these companies are dependent on advanced robotics companies, and so on.
The Fourth Industrial Revolution is happening right now all over the world. It’s characterised by automation and the interdependencies between various digital technologies and human operators, who are sometimes even able to operate from remote locations. These technologies are typically fused with artificial intelligence and robotics, which massively streamline supply chain processes.
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