The chemical industry is a major player for the Dutch economy, contributing almost € 20 billion to the balance of trade in 2010 (51% of the total balance of trade goods). It is currently estimated that only 60% of load carrying is utilized. This poor yield is due to an imbalance in location of production and consumption, empty returns, short-term focus in optimization, and limited flexibility for the carrier to plan shipments. While the first issue (imbalance) is hard to address from a supply chain and logistics perspective, this project will address the remaining three.
The chemical supply chain accounts for about 10% of the transport flows (ton/km) in the Netherlands. The vast majority of these flows are international; 19% of all exported goods by weight are chemicals.
Three new and innovative approaches will be applied to the supply chain planning process, being improved forecasting and planning of transportation needs in the medium-term and improved short-term coordination between off and on-site logistics (PLAN), sharing of inventory and railcar resources (COMBINE), and bundling of transportation flows (BUNDLE).
In this project, relevant decision support models and new operating concepts will be developed, evaluated and where applicable tested:
A business model for a logistics service provider to extend services in this sector, allowing the LSP to operate at a higher added value level if certain controls are transferred to the LSP, for instance in the operation of, or in coordination with, site logistics.
Within the scope of the competitive situation of the European chemical industry, we anticipate that logistics capabilities and concepts are particularly relevant for the Dutch chemical industry, putting them in a better position to take full advantage of this.
Building on the successful concept of pipeline management, we believe there is a basis for establishing a similar joint venture for inventory pooling related concepts.
An important general objective is to use this project to establish a supply chain innovation community for the Dutch chemical industry and associated logistics services.
The project aims to realize a substantial increase in chemical bulk transport efficiency (5-10%), generate a competitive advantage for LSPs in the combination of off and on-site logistics, and provide the basis for a startup company for the management of shared inventories.