MANUFACTURING


The significance of sustainable supply chains


Tim Doggett - Chemical Business Association


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Chemicals play a critical role in society and the economy as almost everything depends on or is touched by the chemical industry. If the chemical supply chain is disrupted many of the things that we rely upon in our daily lives – including beauty and personal care products – are jeopardised. Here, as chief executive of the UK-based


Chemical Business Association (CBA), I discuss recent global disruptions and highlight the importance of a sustainable chemical supply chain. Since the turn of the century, globalisation


has rapidly increased, with massive volumes of freight travelling vast distances around the world. This has been enabled by an integrated global supply chain which has grown and evolved to become highly optimised, and upon whose efficient and cost-effective operation we have become dependent. The chemical supply chain in particular is


extremely complex. It is global in scope, with raw materials and finished products moving between or through multiple countries. It is also a vital part of the global economy – in fact, the chemical industry powers the modern world as


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we know it, with over 95% of all manufactured products containing inputs from the chemicals industry. Over the last three years, however, this


critical sector has been impacted globally by a combination of extraordinary and unprecedented challenges, which wreaked havoc on global supply chains and exposed our reliance on its efficient operation.


Global supply chain disruptions During the pandemic, businesses across most sectors scaled back operations and reduced output. Although businesses have reopened and demand is increasing, many suppliers have been unable to scale back up to pre-pandemic levels. As a result, they cannot meet demand. This is an issue that has affected the


chemical supply chain as much as any other industry, with China’s ‘Zero Covid’ policy and frequent mass lockdowns, port delays and congestions, unrest and strikes in countries from South Korea, Germany, the USA and UK continuing to hamper the road to recovery. Another challenge that the supply chain has been facing are huge price increases in the


cost of moving freight, with road freight and container costs alike increasing dramatically, driven by factors such as rising fuel costs and unpredictable volumes. This has been compounded by the recurring lockdowns in China, shortages of raw materials, the closure of manufacturing plants, and spiralling energy cost. Russia’s war in Ukraine, meanwhile, has


further disrupted the global supply chain, which has had several direct impacts. Supplies from Russia have been severely curtailed due to the sanctions placed on it, while production in Ukraine is understandably impeded. Transport has also been affected, not just in the ports as has been widely reported on, but in less obvious ways. For example, many Eastern European truck fleets had significant numbers of heavy goods vehicle (HGV) drivers who were Ukrainian nationals – as much as 40% in some cases – and many of whom returned to Ukraine to defend their country at the start of the conflict. All these issues have combined to slow


down or create barriers to the movement of goods and delays in manufacture. As a result, supplies of key chemical components, many


April 2023 PERSONAL CARE


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