Chemical manufacturers and distributors must streamline inventory management to defend profit margins in increasingly fierce global competition. However, streamlining extremely complex things is challenging.
In this article, we outline the specific inventory management challenges of chemical companies and the reasons why business leaders must actively address them.
The hazard communication standard (HCS 2012) developed by OSHA requires chemical manufacturers or importers to classify the hazards of chemicals they produce or import. They must also inform employees of hazardous chemicals they are exposed to through hazard communication procedures, labels, safety data sheets and training.
Labeling is the cornerstone of compliance with HCS 2012 and GHS (United Nations globally harmonized classification and labelling system for chemicals). The regulations emphasize the consistency and understanding of chemical labels, so labels are standardized and must include the following six elements:
Signal word. Indicates a hazard, such as a warning or a hazard. Chemical manufacturers and distributors, read review.
GH pictograph. Identify hazardous products and classify them according to chemical, health and environmental risks. Here is an example.
Manufacturer’s information. Identify the manufacturer’s company name, address and telephone number.
Prevention statement and first aid. Describe preventive measures for prevention, response, storage and disposal.
Risk statement. Describe the nature and degree of hazards of hazardous products.
Product name or identifier. Identify the product or chemical name.
In addition to labeling, each chemical company must maintain an updated safety data sheet, or SDS. SDS must be written or printed and hazardous chemicals must be noted in GHS standards. In the event of an audit or an accident, it must be available immediately.
FIFO and LIFO are the most popular methods of inventory management. However, due to the potential fatal consequences of product expiration in the chemical industry, it is necessary to use the first out first out (FIFO) method. (the stock code for chemical products contains the validity period, so FEFO is feasible. )
See Also- The Chemical Industry has Recovered from COVID-19 Global Recession
No customer is willing to receive a chemical that is almost out of date – too risky. In the past, customers may not be able to choose suppliers and have to adjust their operations to adapt to the supply chain. However, today’s customers have more suppliers. If chemical companies do not provide a “comfortable” shelf life, they will face the risk of losing customers (and income).
If a product recall occurs, the chemical company needs to track each batch of products sold over the years, which means knowing the name, address, delivery date, etc. of the customer receiving the specific batch of products. To achieve this, chemical companies must have a potential information system to track the relationship between all formulations and raw materials (until batch level), store recipes as product data, and incorporate complete supplier and customer data; this is the most effective for a single system integrating ERP, SCM, and CRM.
The system data must allow chemical companies to prioritize traceability so that the location of any product can be identified within 24 hours.
The system must also consider products still in transit and products that still exist as in progress. Generally, a downward traceability is also required to be able to inform suppliers of defective materials as soon as possible to ensure the safety of the entire supply chain.
The ideal information system for managing chemical stocks must do more than inventory management – it must address the visibility of the supply chain in order to respond quickly to emergencies and manage a range of projects related to actions, dates, compliance issues, related deliveries and “Live Documents” required by legal and regulatory standards. Chemical manufacturers and distributors, did you find this article useful?
Choosing the right SEO agency is an important decision for any business that wants to… Read More
RAM not detected after installing is usually caused by a loose module, the wrong RAM… Read More
Choosing the right material for a project can make a significant difference in its appearance,… Read More
When Ernő Rubik introduced the Rubik’s Cube in 1974, few could have predicted that it… Read More
A conscious wardrobe is a collection of well-made clothes that you wear often and keep… Read More
Venture capital firms manage highly sensitive information every day. This can include financial records, investor… Read More