Plastics Pipeline Blog

Do You Have a “Great” Supply Chain?

Every plastics company wants to be known for delivering quality product on time and within budget. Part of achieving that goal is how well your company can manage its supply chain.

In the article, What Makes a Great Plastics Supply Chain by Custom-Pak.com, the point is made that “A healthy supply chain is the circulatory system of a strong business. You rely on it as much as your body relies on your heart, and without it, the lifeblood of your company would cease flowing.” The article then lists several characteristics to a good supply chain, including Transparency, Transportation, and Systems Integration.

Transparency – “Strong supply chains sync many moving parts. Transparency is crucial to keep suppliers, manufacturers, and executives all on the same page.”

Marcus Battin agrees that transparency is a key to successfully managing a plastics supply chain. Battin is the Purchasing Manager/Planner for Team 1 Plastics, a plastic injection molding company for the transportation industry. In a recent interview, he said that it’s vital to be in constant communication with Team 1’s plastics suppliers – currently numbering at 19 material suppliers and 15 component suppliers. “We need to know if they are experiencing any difficulties in supplying their products to us. When I know what their current challenges are, I can work with them and get a little more stock into Team 1’s inventory so we can avoid any interruptions to our production.”

Transportation – “Every stage of the plastics supply chain depends on transportation that functions smoothly. From the ship or train that delivers resins … to the truck that freights your finished product to your customers, a great supply chain runs on well-managed logistics.”

Battin said, “One of the greatest challenges in supply chain management is being up to date on natural disasters that can affect the distribution of materials. I have learned that it is important that you try and maintain a certain level of inventory so if there is a hurricane or fire that disrupts suppliers’ production or shipping, you can avoid any major delays to your production.”

Team 1 Plastics’ main material suppliers are located in Battle Creek, Michigan (only 25 miles from the Albion, Michigan company), Wyandotte, Michigan, Orlando, Florida, and Sugarland, Texas. Cross country transportation is pretty reliable for Team 1 Plastics.

Battin continued, “The recent hurricanes did not interfere with Team 1’s production because we continued to monitor when and where they might hit land. And, we communicated with our suppliers in the potentially affected areas to get in more stock before the hurricanes hit, anticipating that after the storms, there would be a delay before distribution was back up and running.”

Systems Integration – “Great plastics supply chains integrate procurement, quality control, production, inventory, transportation, and warehousing to reduce redundancy and increase efficiency.”

Team 1 Plastics relies on both its proprietary Enterprise Resource Planning (ERP) software, Promon, and the human aspect to manage its suppliers. Battin explained, “Promon tracks how much material is being used during a production run and deducts that amount from inventory records to maintain an accurate inventory level. When I run the Material Shortfall report, I can see what needs to be ordered and when to order the material, based on lead times.”

Team 1 Plastics’ ERP software works well for the company. It’s another company’s ERP system that is currently causing the largest challenge for Team 1 in managing its supply chain. Team 1, like many other plastics companies, continues to struggle with the reliability of product from Sabic, a company that is, according to its website, “a global leader in diversified chemicals headquartered in Riyadh, Saudi Arabia,” with its U.S. headquarters in Houston, Texas.

According to Plastics News’ article, “Sabic to close Huntersville Office in 2018,” Sabic’s “customers for months have been reporting shipments that were late or incomplete or that were of the wrong material.” The article cited that Sabic has been having struggles “… with resin deliveries since installing a new enterprise resource planning computer system in October 2016. Market sources have told Plastics News that they were seeing delays for shipments of PC, PC/ABS, polybutylene terephthalate and related compounds made by Sabic.”

Battin said, “Sabic’s inability to deliver product efficiently has affected Team 1 by pushing out our orders and creating interesting communication between ourselves and the supplier.”

It’s been over a year since Sabic installed the ERP system. According to the Plastics News article, Sabic’s spokesperson, Susan LeBourdais said that the company has made “substantial progress” and continues “ … to pursue post-implementation actions that will take us to industry-class fulfillment levels.”

“Substantial progress,” is debatable in Team 1 Plastics’ perspective. Battin said, “As of now, there has not been any improvement from Sabic.”