Knowledge Is Savings - This year's Forum for Chemical Logistics will focus on the importance of transparency in logistics processes as well as the resulting cost effects.

Bundesvereinigung Logistik (BVL) will organize the May conference, and Infraserv Logistics will be the host of the event in the Industriepark Höchst. Dr. Sonja Andres talked to Thomas Schmidt, managing director chairman, and Jochen Schmidt, managing director of Infraserv Logistics.

CHEManager: Mr. Thomas Schmidt, what was the motivation for your company to host the event this year at your place in Frankfurt Höchst?

T. Schmidt: As the largest location for research and production of the chemical and pharmaceutical industry in Germany, the Industriepark Höchst is particularly suitable as a venue for this gathering of the industry. This is where more than 90 companies in the chemical and pharmaceutical industry undertake research and production with more than 22,000 employees, and of course many very special logistics services for the companies are also provided here.

Hardly any other location can be used to illustrate in a similar way how the intensive networking of production and logistics works in practice and can lead to a sustainable increase in the competitiveness of manufacturing companies. The central location within Europe and favorable connections to all modes of transport also allow it to assume the role as a hub for chemical and pharmaceutical products.

Mr. Jochen Schmidt, the theme for the event is "More Transparency - Less Cost." Is this also the main motto of Infraserv Logistics?

J. Schmidt: Transparent cost structures are always a prerequisite to achieve lower costs sustainably. Only if you know what processes cause which costs and to what extent, is it possible to identify savings potential. As a specialized logistics service provider for the chemical and pharmaceutical industry, Infraserv Logistics has a lot of experience when it comes to operating as a part of the supply chain of the customer and to support its production processes with customized solutions. The aim is always to represent services and associated costs transparently.

We offer a very wide range of services for our various clients. Sometimes we are involved only in a part of the supply chain, for example, in storage or the organization of internal transport within the industrial park. Therefore, we are able to make the costs transparent for each individual service, and the customer can choose each module individually. This allows maximum cost transparency and the possibility to consider the respective logistics services from the point of view of costs and, if the prevailing conditions or production processes change, to make targeted adjustments, if necessary.

In terms of chemical logistics, where do you see the greatest need for companies in the chemical industry and their external logistics services providers to take action?

T. Schmidt: I see a differentiated situation here with quite different areas requiring action. Many companies have long since recognized the cost advantages of close collaboration with logistics service providers and have taken advantage of these opportunities accordingly. In the process, the understanding is growing more and more that intense cooperative partnerships offer the greatest savings potential. Whoever understands the logistics partner as part of its own value chain and integrates it into processes can gain most from this cooperation.

Logistics is much more than just the transport of goods from A to B, especially in the chemical industry. The regulatory compliance of statutory requirements, the qualification of employees who deal with sensitive products, the framework of customs and fiscal conditions surrounding the international exchange of goods - these and many other issues can have a significant impact on cost structures. Sometimes, the know-how that experienced chemical logistics specialists have is used only partly.

Supply chains within the chemical industry have become not only more international, but they also have to be assessed increasingly according to ecological and social aspects. How can this be brought into line with cost optimization?

T. Schmidt: In this case, there is also a need to pool efforts and to cooperate in partnership with a professional logistics service provider and to be prepared to relinquish those parts of processes that, up until now, you controlled yourself. At the Industriepark Höchst, we are able to shift large transport from the road to more environmentally friendly modes of transport through our trimodal port alone, which permits an optimal network of the transport modes rail, road and water to be developed accordingly. This is, of course, not available everywhere. In addition, companies can use the site as a transshipment or distribution point for breaking up or assembling large shipments. All companies, e.g., those for whom our block train connection is interesting, can also use the trimodal port. This makes ecological sense and saves on transport costs.

We just mentioned the aspect of transparency. In relation to the complex international supply chains and their wide variety of stakeholders, is it at all realistic and possible to create transparency?

J. Schmidt: Yes, this is possible. First of all, the overall processes with the individual process steps have to be analyzed and recorded also in terms of costs. That takes time and, of course, money and not everyone can do it. But the effort is worth it, because the result is a detailed taking stock of the supply chain with the individual costs, which can then also be appropriately adapted and modified. Because we operate in the industrial park and other locations for our customers at very different intensities, we have to make exactly this analysis of the processes. We tell the customer exactly at which point we can provide what services and the costs to be expected, or can be saved under optimal conditions.

The monitoring and control of complex supply chains takes place via our Internet-based system solution LEA (Logistics Excellence Anytime & Anywhere). With LEA, we are able to reproduce customized supply-chain solutions across all routes of transport, to automate and standardize processes, and create greater transparency in the supply chain. This saves our customers time and money.

How important are global standards and hence also transparency with regard to the safety of the entire supply chain?

T. Schmidt: The value of standards should not be underestimated, because they guarantee customers an appropriate level of quality. Furthermore, they encourage cost transparency, as it is possible to compare different quotations and services at the same level, furthermore they can contribute to a reduction in the complexity of the supply chain. Less complexity creates more trust and transparency and ultimately minimizes risk.

They also offer advantages for logistics companies as the processes of different customers can be harmonized, and full advantage can be taken of potential synergistic gains. Only the interaction of all those involved and the same level of understanding provide such benefits. Ultimately, however, these standards also contribute to sustainable actions. Imagine, for example, if shipping containers or pallets were not standardized, this would mean different handling, repeated repacking, differences in the necessary equipment, etc., and would result in significantly more time and effort. Uniform standards are therefore essential.

Finally: Sustainability is required in chemical logistics. How should future transparent control mechanisms be organized, and still remain affordable?

J. Schmidt: Sustainability is a many-sided issue. As a company and part of the Infraserv Höchst Group, we confront ourselves with all checks and audits that demonstrate the careful use of natural resources. The industrial park undoubtedly assumes a pioneering role on this issue. For me, sustainability means choosing the ecologically most appropriate and most cost-effective means of transportation. The industrial park offers certainly some excellent possibilities in this respect with the trimodal port and the transfer of transport capacities to both the rail and waterway options. Also, the modern hazardous goods warehouses, which meet the highest safety standards and avoid adverse effects to the environment, are part of a sustainability concept.

As a company, we are thus in a relatively comfortable situation, however, considering the diverse regulations and statutory requirements, we should look as an industry more towards the practicality of these specifications. The number of companies that place emphasis on sustainability in all areas of the production process is growing and as a consequence causes chemical logistics service providers to keep suitable records of certification in their own interests, because in addition to the aspects of cost, quality and timeliness this provides the necessary competitive advantage.