Purchasing departments that handle the procurement of chemicals often face customer service issues. The level of difficulty in resolving a problem that chemical buyers experience is usually inversely proportional to the size of the buying organization. Large companies demand and receive a high level of service. Suppliers go out of their way to ensure that bulk buyers do not find any reason to complain about their services. If something does go wrong, they immediately take up the issue and initiate corrective action.
Chemical consumers face the challenge of identifying suppliers who can deliver raw materials of the required quality at a fair price. Once they have found a reliable vendor, buyers have a tendency to continue the association even if there is a possibility of finding alternative sources that are more economical.
The success of a manufacturing process is often dependent upon the quality of the chemicals that are used. Purchasing departments face the challenge of buying raw materials that meet required specifications and are priced within the stipulated budget. In many instances, it is not possible to satisfy both these requirements. Consequently, a choice has to be made between one and the other.
A manufacturing company that spends large amounts on the purchase of chemicals can gain a significant cost advantage if it is able to bring down the amount that it pays for its purchases. Many organizations however, assume that optimizing the procurement function is limited to getting the lowest possible prices from their suppliers.
Topics: Pricing in Chemical Industry