Bright Spots in Tough Times - Delivering a commercially driven supply chain is the biggest challenge that chemical manufacturers face in 2013, according to industry research. Macroeconomic factors, such as a volatile economic environment and increasing pressure on European margins due to the rise of shale gas in North America and large outputs from emerging markets, force supply chain managers to standardize processes and to deliver improved supply chain best practices and modeling systems.

Mark Nikolich, CEO Europe for Braskem, said these challenges can become opportunities for growth. In his opinion, the chemical market can take advantage of volatility by investing in people and specific projects, achieving improved synergies in multiple regions, and by understanding the risks and capitalizing on the opportunities in current global production and demand trends.
Nikolich will speak at Logichem Europe, April 16-18 in Antwerp, Belgium about the importance of using the supply chain to drive commercial strategy. Fellow speakers Peter Devos and Sukumar Narasimhan also will address effective supply chain management at Logichem, the world's largest gathering for the chemical supply chain community.
Devos, supply chain competence director at Monsanto, and Narasimhan, senior vice president, supply chain, with Reliance Industries Limited, answered questions recently about supply chain strategies.

What have been your biggest changes and/or successes of 2012?

Peter Devos (Monsanto): Our company and businesses have been growing over 2012, and we faced the challenge in the supply chain to cope with this growth - not only from a volume but also from a people, process and systems point of view.
Besides, we are starting to work in a more global supply chain environment where we start aligning the SC business processes and systems globally.
Third, we are bringing the supply chain closer to the customer, increasing customer focus and customer-commercial integration.

Sukumar Narasimhan (Reliance Industries Limited): There is an increasing awareness in organizations about the impact effective/efficient supply chains can have on the operating results. Hence, the route to survival - if not competitiveness - has been for firms to continuously search for improvement opportunities in supply chains. 2012 and onward should be the best times in the career of SCM professionals.

What are your biggest challenges for 2013, and how are you planning to tackle them?

Peter Devos (Monsanto): Cope with fluctuation in sales demand. This is being tackled by investing in demand planning processes, tools and organization.
As we have been faced with continuous business growth, our supply chain focus is on new people development and training. With this development of new people, you build new future talent.
Realignment of the S&OP/IBP processes also remains a continuous attention point.

Sukumar Narasimhan (Reliance): The biggest challenge in 2013 would be to sustain the steam on supply chain initiatives that have all too suddenly sprung up in companies all the world over.

What approach do you take to balancing the need for increased flexibility and agility against that of over-complexity?

Peter Devos (Monsanto): As indicated above the more you grow and the more a company integrates the processes globally, the higher the end-to-end complexity becomes. Luckily, we can offset part of that complexity through process simplification and standardization. Another part of the complexity can be offset with new, higher performing IT systems, allowing continuous cross-functional alignment while focusing on complexity reduction, cost and service.

Sukumar Narasimhan (Reliance): We ceaselessly work toward simplifying processes in supply chains, not only within our own organizations, but across our suppliers and customers as well. This way, we are able to achieve a quantum improvement in efficiencies and tackle sustainability issues along the complete spectrum of firms engaged in a vertical product chain. I guess this should be the way forward across all companies in the next few years, if we are serious about sustenance in the long run. Industry associations will need to come together to create "cluster communities" so end-to-end solutions can be put in place that enhance standards across the board. Simplified processes will automatically make organizations agile.

Some critics argue that the financial crisis has been good for supply chain and logistics functions, raising its importance in the wider business structure. Do you agree, and do you think it will last once we are "beyond the crisis"?

Peter Devos (Monsanto): I would say that every crisis situation - on the financial downside or on the business upside-growth - forces a company to rethink its processes and organization. So, yes, a crisis can help and forces to refocus. I'm afraid we need to learn to cope with that on a more continuous basis, not just waiting for the next crisis.

Sukumar Narasimhan (Reliance): I completely agree. Global meltdown has meant a "heating up" of the supply chain function as the provider for these elusive "cash liberation" strategies in business. It will be completely up to us SCM professionals to perform and remain in the center of all businesses.

What have been the most effective strategies you have employed to improve your team's alignment with the rest of the business?

Peter Devos (Monsanto): Putting the problems on the table as they appear, making them discussable cross-functionally, and ensuring you are using the same vocabulary/lexicon across commercial, finance and supply chain. Allow people to discuss burning topics in an open way while being bold but also respecting each other's opinions. Try to work together; consider a problem as a joint opportunity.

Sukumar Narasimhan (Reliance): Constant prodding of the benefits accruing from an end-to-end assessment of processes both one step back - suppliers - and one step forward - customers - in addition to our own processes has been achieved after quite some time and with great reluctance!