Schoeller Allibert UK, the European market leader in reusable transit packaging solutions for the chemical industry, has shared insight into how the chemical supply chain can learn from the retail sector’s adaptations for Covid-19 operation.
The manufacturer, which serves both industries, has noted key differences in how the two sectors have shored up their supply chains and believes that better sharing of best practice between the two could help deliver a more robust chemical industry and underpin the innovation and resilience of the sector.
Nick James, Sales Director – Chemicals, Schoeller Allibert UK, commented: “Our business sits in a very privileged position, with a birds-eye view of both food and chemical manufacturing markets. Too often, these industries are siloed despite having a great deal in common. From our perspective as a leading supplier to both, we have seen challenges and successes on both sides, and there are fantastic opportunities for the chemical sector to learn from how retailers responded to Covid-19.
“From the outset, retailers escalated their use of big data and used it more strategically, which hasn’t been as common in the chemical sector. Audit and insight specialist KPMG notes that the industry has been a ‘slow mover’ in adopting digital and data technologies in key areas such as machine learning and AI, which rely on big data to be effective. By making better use of sales and customer behaviour data, retailers have been able to shore up sales in a remarkably volatile market. Rather than trying to underpin every single process at once, which could easily have been the knee-jerk reaction, retailers streamlined their supply chains to focus on core ranges, to support their logistics and stockholding scenarios. It’s the ideal time for the chemical industry to follow suit and identify what data is available through production, storage and sales and to use it to create more agility and value in the supply chain.”
The manufacturer also commented on the rapid acceleration of automation in the retail sector, which has allowed many brands to continue operating at speed. Schoeller Allibert has worked with high-profile retailers to switch from existing containers systems to durable returnable transit packaging (RTP).
Nick continued: “There is a great deal of opportunity for the chemical sector to explore greater digital automation. Intelligence agency McKinsey notes in its 2020 insight report on the state of the chemical sector that it has typically been a slow adopter of digital and analytical technology, which is why we see so much potential on the table for automation and big data-driven decisions. There is certainly movement towards this in the industry in terms of chemical handling, but overall take-up has been slow. From the start of the Covid-19 pandemic, retailers – particularly FMCG – were able to use digital automation as a means to speed up logistics and ensure accuracy, with technologies such as RFID showing real commercial value. In fact, we have been able to assist larger retailers in turning warehousing and logistics into a competitive advantage with recyclable transit packaging that enhances space, time and manpower efficiency, while supporting sustainability initiatives at the same time.
“To help the chemical sector achieve the same results, we’ve recently launched the ChemiFlow® IBC, a 100% plastic UN approved container purpose-designed for the sector. Created to blend sustainable operation with durability, security and handling excellence and in response to the cross-industry demand for digital automation, the range can be equipped with IoT (Internet of Things) and RFID (Radio Frequency Identification) technology.
“Automation in areas such as order picking has allowed retailers to operate with fewer staff at any one time, creating a safer and less-dense working environment. The chemical sector has, overall, been much slower to adopt automation and we have seen some businesses struggle to retain their productivity on the warehouse floor. A report by market research business Deloitte found that 52% of chemical enterprises don’t have a digital strategy and transformation roadmap in place; the pandemic could be a great jumping-off point for the chemical sector to embrace greater digital automation.
“Finally, we have to compare the overall mindset of the two sectors, because that’s just as important. As a legacy industry, the chemical sector is known to have traditionally been slower to adapt and change. However, volatile situations like the pandemic have shown that disruption and agility are crucial across all markets. The retail sector has been a great example of almost ‘starting from zero’, in that sales strategies, supply chains and even business models were redesigned in short order. The result has been that the expected volatility in sales could be addressed very early on. While the overall decline in consumer sales has impacted many businesses, this combination of foresight and flexibility has enabled some retailers to defend the bottom line. We’d like to see the chemical supply chain become more flexible with strategy, to ensure the continued success of the industry.”