Chemical Manufacturing: A High-Speed, Volatile Supply Chain
by Greg Wimble, on October 31, 2017
Manufacturing and distributing vital chemicals is a challenging field defined by complex regulations and unexpected supply chain risk. Companies operating in this sector have to streamline their processes as much as possible to define themselves against one another. Many behind-the-scenes factors can have highly relevant effects on performance in terms of speed and reliability.
The Post-Hurricane Market
The Chemical Activity Barometer, run by the American Chemistry Council, recently showed just how prone to disruption the U.S. chemical production industry is - and how quickly it bounces back. The storms that caused heavy damage to the southern United States hampered companies, though not enough to stop year-over-year growth in key metrics.
The ACC measures the amount of chemicals produced, the price of equities, product costs and inventory. According to the organization, all four of those key metrics have recovered since the massive supply chain interruptions caused by the hurricanes making landfall. The ACC added that due to chemicals' role in the production of other goods, a healthy chemical market often serves as an indicator of a strong economy in general.
Scrambling to Recover
The general bounce-back numbers are encouraging, but within the data are companies scrambling to get production and supply back on track. Plastics Today explained that polyethylene production has become difficult following the storms, specifically Hurricane Harvey. With a large-scale linear alpha olefin production center damaged by the weather, companies making polyethylene have had to stretch their supply chains to the breaking point to keep up with demand for the versatile plastic.
Managing supply and demand is challenging in a fast-moving sector such as chemicals, especially due to chemical production's effect on many subsequent manufacturing functions. Companies need to accurately track their products as they move around the world and between trading partners, all without ever slipping out of regulatory compliance. Labeling solutions play a major role in keeping these links strong.
For more on chemical labeling check out our report on the topic.