Supply chain management in the chemical industry can be a challenging task. Identifying a reliable supplier of the required raw material could take days if not weeks. Once this task is completed, it would be necessary to negotiate a mutually acceptable set of terms and conditions. By the time an order is placed, the market situation may have changed. The firm that has placed the order may not require the material any longer. It could also be possible that the price at which a particular chemical is finally purchased has increased to such an extent that it makes the entire exercise uneconomical.
In such circumstances, the job of the purchasing department becomes very difficult.
Fortunately, chemical companies have the option of entering into purchase transactions by using an online trading platform. An online marketplace can significantly reduce the time required to complete a purchase transaction. In addition to this, it offers several other benefits.
Possibility of greatly reduced prices
Many chemical buyers have requirements that are easy to predict. They know months in advance about the quantities and the grades of the specific chemicals that they require. These firms can plan their purchases and enter into long-term contracts with the suppliers who offer the lowest prices and the best terms.
But every chemical buyer does not have the luxury of several months’ notice about its requirements. Certain organizations have widely fluctuating needs for raw materials. They can gain immense benefits if they are able to establish a procedure for buying different quantities of chemicals from reliable sources at prices that are within their budget.
Even buyers who place their orders a whole year in advance may experience a spike in demand for their products, requiring them to place orders for raw materials for immediate delivery.
Online trading platforms offer an ideal solution. They provide complete details about a number of suppliers who can meet a buyer’s needs at short notice. The turnaround time for an order is extremely quick as each supplier on the platform is pre-approved.
An order placed with a supplier through an online platform carries little risk. The buyer can be certain that the terms agreed upon will be strictly adhered to. The added advantage that a buyer has when placing an order through an e-commerce platform is that the competition between the different suppliers is sure to drive prices down.
The advantage of speed
A manufacturing organization may receive a new order which can be fulfilled only if certain chemicals are available immediately and within a certain price range. In these circumstances, an online chemical trading platform can often provide the best solution.
The third-party online marketplace will list multiple suppliers who offer the various raw materials that are needed by the buyer. As the suppliers have gone through a rigorous screening procedure prior to being listed on the site, the purchasing department of the buyer can confidently place an order knowing that it will be fulfilled promptly.
An e-commerce platform is superior to the traditional way of placing an order in other respects too. The buyer does not need to negotiate terms and conditions with each supplier that it deals with. A standardized agreement can be used for all purchases.
This results in great savings in time and reduces the administrative work involved in each transaction.
Online trading should be a part of every chemical consumer’s buying strategy
Practically every organization that needs to buy chemicals on a regular basis can benefit by using an online marketplace. Although there is very little extra time or effort required to begin sourcing raw materials from an e-commerce platform, the benefits that are available are simply too great to ignore.
If you’re interested to read more, click here to read the new ebook:
"The future of (petro)chemical procurement"
