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Not on my plant floor

Staff -- Purchasing, 4/4/2002

Inventory's a sticky wicket in the CPI. While buyers report plenty of inventory shifting to their raw materials and/or custom chemicals suppliers, there is less evidence of the types of activities that might permanently remove inventory from supply chains. For example, 68% of CPI buyers say they demand just-in-time delivery from chemical or chemical raw materials suppliers (which can often force suppliers to carry higher safety stocks) and 59% use consignment programs (where suppliers provide product on site, but are not paid until said product is consumed). Ability to shift inventory costs appears strongly correlated to company size; 88% of large-volume buyers use consignment programs vs. just 48% of smaller-volume chemical consumers. By contrast, the survey finds just 27% of chemical-buying firms offering suppliers onsite access to information about demand that might help them manage production and stockpiles better. Just 22% of the survey participants cite participation in any types of automated tank telemetry programs (where suppliers replenish tanks according to automated demand signaling).

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