• Large supplier base.
• Large number of chemicals used.
• Large chemical inventories - cost of
materials in inventory as high as five times the cost of materials
• Lack of supplier responsibility and
• Supplier profit based on volume of
• Resistance to change.
• Environmental compliance problems.
• Employee health and safety problems.
• Ineffective use of technology.
• High transaction cost contribution
to product (i.e. paperwork processing costs for high volume of transactions).
• Single indirect chemicals supplier
for a plant. Customer purchases chemical service not chemicals.
Chemical Manager provides materials, management, analytical, inventory
control and management information systems and services through
• Customer maintains control since its
employees coordinate overall management.
• Chemical Manager becomes a key team
player in the plant production system.
• "Just-In-Time" inventory
• More effective use of technology.
• Chemical Manager is paid on a parts
produced basis and profits are based on service.