Every industry has its unique topology, business requirements and operational constraints. Technologies like TMS are designed to solve an organization’s unique challenges, and the value it brings to the table will be different, depending on your geography, industry, and network.
Businesses today are in a constant struggle to grow revenues, control costs, and reduce business risks. With the chemical industry - in addition to the above, regulatory compliance also becomes one of the major vectors to focus on - due to the hazardous nature of their raw and finished goods.
Thanks to advancing technology, managing hazardous materials (HazMat) shipping processes is easier than ever, but it takes proactive planning and thought to apply the right technology to the right points, especially in high-volume parcel environments. Chemical manufacturing depends on raw materials that are subject to environmental, political, and economic influences. Unlike most other industries, the chemical industry is also subject to potential terrorist attacks, adding yet another layer of complexity to the shipping equation. Weather events can disrupt the supply chain at any time, and unanticipated regional raw material volatility can affect production costs for many companies.
It takes an enterprise-class system to centrally manage HazMat and multi-carrier compliance across the extended enterprise. Unfortunately, most warehouse management systems (WMS), order management systems (OMS), and enterprise resource planning (ERP) software aren’t built with either hazmat or multi-carrier parcel compliance as their focus. This limits the ability of logistics teams to satisfy consumer demand for more delivery options while controlling regulatory risks, especially as they are increasingly preoccupied with securing the enterprise against data breaches. Managing these risks with systems deployed in the cloud is even more challenging.
Freight costs typically are higher as a percentage of revenue in Chemicals (15-20%) compared to other industries (4%-8% in CPG for instance). Chemical plants are heavily constrained on resources, and in dire need of better planning and collaboration to improve efficiency. Customers often expect capacity shortages and disruptions in inventory, which leads to a demand for closely placed inventory. These factors mandate chemical companies to be in constant search for right solutions and processes to optimise shipments, collaborate better with logistics providers, gain better visibility and digitalize their supply chains.
Moreover, the risks of regulatory non-compliance are a constant concern for organizations packaging HazMat. Special packaging and shipping instructions and DG classification information is critical to pass to the carriers when relaying shipping information. Detailed document management pertaining to HazMat regulations is a hassle at best for chemical companies. Given the challenges, the ‘right’ TMS can support in 5 key areas for Chemical companies, particularly those dealing with HazMats:
Real time visibility: Real time visibility of HazMat shipments is absolutely critical - While for most industries, shipment level information suffices, For chemicals and particularly HazMat, material level real time transport visibility (RTTV) is an absolute must. This is especially so for shipments coming from international borders. A container might be docked at the port for 4 days - only with material level visibility will you be able to identify when your goods are coming out of the container. This visibility can help you plan better, ensure continuous runs on production lines and manage customer expectations better. Moreover, it also enables compliance officers to better manage shipments at a line-item level, and identify at-risk shipments early.
Securing Access to Capacity: Hazmat shippers need consistent, reliable capacity that meets regulatory and safety requirements. A modern TMS addresses the unique needs of HazMat shippers and can help them solidify long-term, reliable access to capacity.
Regulatory compliance made easy: Wouldn’t it be cool if you could configure deep cleaning of a truck as a mandatory step, before it gets loaded with new material again? Validating HazMat shipments against regulatory rules, HazMat centric configurable workflows, generating accurate and compliant labes, printing shipper’s declarations and other forms and reports that comply with DOT regulations - a good TMS can do it all.
Optimizing Delivery: When it comes to shipping HazMat, the right delivery optimization tool can make all the difference. Optimization can take on multiple dimensions, such as consolidating compatible HazMat of the same or different classes or linking loads across a network to reduce the frequency of empty backhauls. It is critically important to identify infeasible matches (such as shipping baking flour directly after a truck has delivered weed killer) and accounting for any incompatible links.
Mitigating Disruptions: Proactive disruption management is key for HazMat shippers. Predictive analytics can provide the proactive planning needed to lessen the impact of unexpected events and mitigate risk. While every risk can’t be avoided, there are many steps that can be taken through conceptual, data-driven supply chain planning to make a concerted effort. By combining historical data with forward-thinking models, shippers can identify risk and mitigate it wherever possible. Once a shipment is en route, predictive tools coupled with the right execution allow for the opportunity to change course when necessary. Multiple modes, lanes, carriers, and equipment can be modelled simultaneously, and risk scores can be used to access weather patterns or other disruptions and to predict delays through dynamic ETAs.
Pando’s end-to-end solution for the chemicals industry supports all of the above. To know more get in touch with us here.
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