Purchasing is at the heart of any large organization. Finding the raw materials you need at the right price is the key to keep your business going. In the complex and delicate world of the chemical industry, there are very few chemical suppliers who meet all the requirements. Here are seven common procurement problems faced by chemical suppliers:
1. More competition and more complexity
You’re not afraid of competition, but you don’t want them to have the upper hand in getting the best sources of chemicals. The industry is complex and demanding, and so are your orders. You need a vendor who fully understands your complex requirements and meets them every time.
2. It will exceed the budget
It’s much easier to exceed the budget than we’re willing to admit. Overspending can have immediate and serious consequences, affecting credit lines, disrupting profit forecasts, and stopping further purchases. While this situation is usually remediable, it is important to make the procurement process streamlined and efficient.
This problem usually comes down to a lack of communication within the organization rather than careless spending activities. Closer internal communication, real-time accounting software and regular budget updates should solve this problem quickly.
3. Transparency of supply chain is needed
Your standards are very high and your chemical suppliers are required to have the same quality. Your goal is to find a completely transparent supply chain from source to delivery, otherwise it will not work.
The challenge comes when you find that a supplier provides you with this level of supply chain transparency, but lacks some of the other basic business practices you need, such as timely delivery and flexible ordering.
4. More choices of raw materials are needed
When your chemical needs are complex and diverse, you need to be able to buy raw materials for a variety of purposes. When a trusted provider can’t offer you such a choice, you know it’s time to make a change.
As your business grows, so does your demand. You need your supply to keep up. Failure will have a negative impact on your reputation and your business.
5. Damaged goods
You won’t accept a damaged order in your personal life, so why should your business accept it? Of course, these things may happen, and you may feel that you have to cover up a one-time disaster, but repeated orders will lead to damage spell trouble.
Most chemicals are highly toxic in nature, and if suppliers expose your employees to unnecessary risk, they will soon find their names disappear from your purchasing books.
6. Shipping logistics
Once you place an order, you need to be able to trust that it will arrive in time. Logistics and express delivery are the business of chemical suppliers. You’ve paid for your services, and the rest is up to your suppliers.
Having a supplier who takes customers seriously is what you pursue. Someone who knows what timely supply means to your company and works hard to live up to their delivery commitments. You want to be able to track your orders, you need flexibility and quick tracking service options. Your supplier needs to be as flexible as your business.
7. Accidental order
Like over consumption, unexpected ordering is often a general misconception. This software allows you to double your orders, or simply make daily human errors. How flexible are your chemical suppliers when returning wrong orders?
Take a close look at your purchasing route to find out how the error occurred. Mistakes do happen, but too many mistakes cost money. While your supplier may be happy that you return the first item that you mistakenly ordered, this may not be true for the second or third item.
