Processors of chemicals in crisis mode: A paint and coatings manufacturer urgently needs solvents so that it can continue to produce. A producer of lubricants is frowning as stocks of its basic materials in the warehouse dwindle by the day. Supplies have been ordered, but are stuck. Logisticians specializing in chemical transport are doing their best, but are in turn dependent on factors over which they have little influence. We talked about this with Michael Kriegel, Department Head at Dachser Chem Logistics.
MICHAEL KRIEGEL Very positive as far as the general cargo segment is concerned, i.e. packaged and palletized goods. We can see this in concrete terms in the steadily growing number of shipments. In 2021, we moved around four million consignments of chemical products at Dachser. Among them were 1.25 million dangerous goods consignments. This development is in step with the chemical industry, which, as we all know, is one of the most successful and competitive industries of all. Despite the positive development, supply chain disruptions, material shortages and capacity bottlenecks have severely challenged chemical logistics in the last two years. It is essential to manage these bottlenecks in global supply chains with foresight in order to keep the chemical industry's supply chains running without interruption.
The pandemic has shaken many certainties. There are repeated disruptions in global supply chains. Currently, seaports and airports in China are having to restrict or even completely shut down their operations for a certain period of time due to the rigorous Corona measures. This leads to capacity bottlenecks that cannot easily be made up. In addition, there are permanent, structural problems such as the shortage of drivers and skilled workers, which are particularly noticeable in the current situation and which logistics operators and shippers must tackle together.
The reduced ability to plan with regard to supply chains will continue, at least this year, and companies will adjust their supply chains to a certain extent. The importance of supply chain management has increased in this context - the topic is now being discussed by many customers, right up to the boards of directors. As a result, logistics is increasingly perceived as a business-critical success factor, also in the chemical industry.
We act as a partner and solution provider in this situation. Crucial to this is a robust and balanced transport network that remains capable of performance and control at all times, even under the extreme stress conditions of the pandemic, and can activate appropriate transport capacities.
Our company is investing decidedly in research and development in this area and already has a number of e-vehicles in operation in inner-city traffic. However, so far only a few zero-emission heavy trucks are available on the market, which are needed for general cargo distribution of chemical goods in the main run. That is why today, optimal utilization of transport capacity remains the biggest lever in making chemical logistics more climate-friendly. At the end of the day, nothing is more harmful to the climate than empty runs. We are also currently converting our fleet to mega-trailers, for example. These have a larger loading space for the same length and width and are therefore more economical and resource-saving than conventional trailers, especially on long-distance journeys (main run).
We have many years of experience in warehousing, including in energy-intensive industries - and with our internal construction department, we have the expertise in-house to design expansions and new buildings in an energy-saving way. At the same time, we are implementing various projects such as the Europe-wide switch to industrial trucks with energy-saving lithium-ion battery technology or the use of energy-saving LED lighting. Since 2022, we have been sourcing electricity exclusively from renewable sources worldwide and are significantly expanding our renewable energy generation. To this end, we are investing in the expansion and construction of new photovoltaic systems on the roofs of our European logistics facilities and office buildings.
Digitization and thus the use of "Big Data" will make work in logistics along the entire supply chain easier, more efficient and less prone to disruption. However, we see the particular strength of digital technologies primarily in supporting people in decision-making processes or relieving them of routine tasks, thereby increasing motivation and giving them room for more demanding tasks. Supply chains become less susceptible to disruptions by linking goods and data flows, thereby creating transparency and quality across all process steps. For example, we are already using machine learning applications for data from day-to-day operations to better forecast incoming volumes. Wherever possible, we are also replacing paper with digital processes, such as the tried-and-tested clipboard used to check dangerous goods vehicles.
In addition to the topics of digitalization, sustainability, and driver shortages already mentioned, the topic of supply chain resilience and the associated network concept will be of major concern to us. For many companies, the current bottlenecks are a wake-up call. They want and need to become more resilient in order to better arm their supply chains against potential threats. IT security and IT resilience will also be of utmost importance, as secure data and its exchange keep the physical supply chain running.
Michael Kriegel has been active in the logistics industry for more than 20 years and specializes in solutions for the chemical industry. Since 2007, he has been responsible for the Dachser Chem Logistics industry solution throughout Europe.
> dachser.ch
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Logistics is on everyone's lips: for many, its importance became even more obvious during the pandemic, when supply chains were disrupted. According to Patrick Köpfli, Managing Director of Prologist AG, the importance of logistics will only increase. Digitalization will accelerate processes - something his company has long recognized.
PATRICK KÖPFLI: 30 years is a very long time. Back then, when my father Stephan Köpfli started the company in 1992, there was practically no Internet, only a few cell phones, and the logistics went unnoticed, almost only in the background of the economy. Personally, I have been running the company for 15 years now. What we are seeing is a rapid change that has shaped the industry and is still doing so. Change has always required logisticians to adapt their strategy to be ready for customer needs. Today, this evolution with globalization, digitalization and the expansion of value chains is leading us back to local performance priorities, especially for comprehensive, customized logistics solutions. This includes everything from goods receipt, warehousing, order picking, component assembly, packaging, to shipment preparation and the organization and scheduling of transports. We call this logistics 360 degrees - today mostly integrated into certified and individualized customer processes.
For us as a microenterprise, the customers with their needs are an enormous challenge, but also a great opportunity. After all, they are in the same boat as we are and are virtually embedded in the economy and politics, with all their challenges. You are right: times have not always been easy. Large fluctuations in orders, constantly rising costs, upfront investments in our warehouse infrastructures, ups and downs in market and currency situations, then trade wars - and in the midst of these upheavals we find ourselves with our own. But what has been and continues to be really serious and decisive is digitalization. For us, it's not a new trend. We've been cultivating this topic, as it were, creepily for 30 years now. The logistics processes, especially the information about them, have always been of great importance to the customer. This data, processed into usable information, makes it easier for our customers to manage their logistics. Ensuring this is a duty for us. In the past, monthly reports from the warehouse management system were sufficient, then weekly and later daily reports were required and used. Development, demands, the technological feasibility and finally the benefit of being able to retrieve this information every second brought us to the current state of digitalization. And it will continue to do so. But fortunately, our employees are still needed. Because only with an individual, personal commitment to bridge any technical interfaces in the process will "logistics digitization 360 degrees" succeed.
In general, the current situation is not expected to ease, but rather to worsen. Raw material, energy and transport costs along our logistics value chain have risen massively. And there are the interrupted supply chains and the pandemic that has not yet subsided - and already the effects of war and international tensions are our new challenge. Active, rapid anticipation and cautious planning in investments and - very importantly - intensive communication with our customers are our focal points for mastering these difficult times.
Logistics is more than ever the focus of supply chains. It is not only products that can no longer be manufactured due to supply bottlenecks; the maintenance and repair of machines and vehicles is also limited. A reassessment of logistics is therefore necessary, and it shows that some of the risks, such as bottlenecks, distortions in transport chains or even manufacturing interruptions, can be offset to some extent with improved planning for warehouse and goods management, larger inventories and more flexible, individual logistics services. With these additional services, we support existing and new customers in these times as well.
From a logistics perspective, for example, digitization expands the product range and adds new functions. Our customers should pay attention to this. Whereas the focus used to be on the physical product, the service component of the product is increasing with general product services and the new possibilities offered by digitization. Traditional production companies have to adapt to these changes in order to delight their customers and secure their market position. We in logistics can proactively address this customer challenge with specific services and thus integrate their logistics processes better and faster.
In logistics and supply chain, different factors will take effect until probably 20 years from now. Certain standards will remain established and some new issues will become prevalent. Even then, standard sea containers and euro pallets will continue to dominate physical logistics. Likewise, paper and cardboard as well as plastic will continue to be used. What is likely to increase is orchestrated data exchange to enable forecasting capabilities and autonomous decision-making along the entire supply chain, thereby creating benefits for all players. Customers will increasingly demand green logistics. Sustainability will become a critical success factor for companies - after all, reverse logistics is already in focus today.
We strive to offer our customers the best possible, individual service for logistics and technology. This also means ensuring a stable and secure logistics base with all functionalities, even through difficult times. This security and reliability are qualities that our customers value highly. We are then a kind of "reliable buffer" for their value chains. These are our daily goals and it is important to us to integrate added value directly into our logistics services. This also includes seamless transfer into digitization, into all sub-processes of our infrastructures and, wherever possible, into customer projects.
Since 1992, Prologist has been a service provider for comprehensive logistics and technology solutions that can cover virtually all needs and perspectives. In the meantime, the company has been able to implement over 200 successful logistics projects in areas such as IT-supported warehouse systems, reverse logistics, spare parts logistics, IT rollouts and more.
> www.prologist.ch
