In recognition of the recently observed 30th anniversary of the National Association of Chemical Distributors (NACD), the CPI Edition of PURCHASING Magazine presents this special salute recognizing the group's contributions to the American economy.

Out of the vision of one man in the late 60's and his persistence to convince his colleagues of the need to organize, the National Association of Chemical Distributors (NACD) was established in 1971. Gerald Kraft, president of Kraft Chemical Company and six other chemical distribution company owners founded what they first named the Association of Chemical Raw Materials and Distributors and Manufacturers Agents (ACRMDMA) and quickly renamed it NACD. Today, NACD represents the vast majority of chemical distributor companies in the United States.

NACD was originally headquartered in Illinois, and moved to Washington, DC, in 1984. Early members in particular were enthusiastic entrepreneurs—most with small, family-owned, independent companies. Although competitors in many cases, the early days of the formal association of this group of business people allowed them, for the first time, to share problems, discuss solutions, and develop best practices.

The five regional "Distributors Councils" formed in the early days, based on geographic location, are still functioning today, and are known as regions. Each region votes in a slate of officers, and each elected regional president serves on NACD's Board of Directors.

The NACD Board of Directors consists of four elected officers (including the non-voting president of NACD), five elected Directors at Large, and the five regional presidents, elected by each separate region. Directors at Large serve staggered three-year terms and, historically, in normal course of succession, the Treasurer becomes Vice-Chairman who in turn progresses to Chairman of the Board.

Board members must be a senior executive of their respective companies—specifically, the owner, CEO, president, executive vice president, general manager—or they must have direct profit and loss responsibility over at least $50 million in sales activity regardless of their title. This requirement applies to the regional presidents too. A nominating committee considers several factors prior to placing a name on the nomination slate in order to keep a balanced representation of the very diverse membership. Among other points, they consider the type of company, e.g. factory-pack, national, or independent, as well as a Bylaw requirement that allows only one person per company to serve on the Board at the same time, unless one is a member of the Executive Committee.

NACD member companies purchase and take title to chemical products purchased from manufacturers, then process, formulate, blend, repackage, warehouse, transport, and market these chemical products exclusively for an industrial customer base of approximately 750,000.

The distributors' industrial customers use these materials to produce an endless list of products including food flavorings, perfumes, water purifiers, computers, plastics, paints and coatings, textiles, cosmetics and toiletries, detergents, automobile parts, rubber compounds, fiberglass, pharmaceuticals, and many other products.

NACD's more than 300 member companies are located in every region of the country and operate more than 1,000 chemical distribution locations. NACD also has member companies in Canada and in Europe. Member companies remain largely entrepreneurial and generally service a particular geographic region and specific industrial sector(s). They are typically small- to mid-size businesses, although several companies are national in scope.

Responsible Distribution Process™ (RDP)

NACD member companies are committed to product stewardship and responsible distribution in every phase of chemical storage, handling, transportation, and disposal through a condition of membership in the Association called the Responsible Distribution Process™ (RDP). It is the program that NACD members are justifiably the most proud of and it has become a part of the "DNA" of NACD membership. This signed commitment requires every member company to continuously improve their performance in health, safety, security, and the environment, and to file periodic self-assessments. Company memberships in NACD are terminated for failure to comply with RDP requirements.

Developed in 1991 by and for chemical distributors, NACD's Responsible Distribution Process™ establishes guiding principles, a strict code of management practice, and a practical system to assure continuous improvement in daily operations in every aspect of chemical distribution.

Twelve codes and over 50 elements include such areas as risk management, carrier selection, compliance review & training, handling & storage, emergency response & public preparedness, and community outreach, internal audits, document & data control, corrective & preventive action, and product stewardship.

Since its inception in 1991, RDP has required document third-party verification of company policies and procedures as the first verification step, which all Regular NACD members have undergone. But, in August 1998, NACD's membership voted and approved an on-site verification of member companies' implementation of RDP policies to further strengthen the process. It is known as RDP Verification (originally called On-Site Management Systems Verification [MSV]).

Since January 1, 1998, companies submitting membership applications are first considered for Candidate status. When they successfully complete document third-party verification, they move to Regular membership status. At this point, the company is scheduled for RDP Verification, which runs in three-year cycles. The second three-year cycle begins on July 1, 2002. Visit http://www.nacd.com/Rdp/ for additional information on RDP.

RDP Indices

To test the validity and effectiveness of the Responsible Distribution Process™, in 2001 NACD launched a program, which not only addresses safety and product stewardship, but also provides valuable information about the chemical distribution industry. NACD members respond to a two-page questionnaire providing the prior year's safety performance data as well as general business and operational demographics. NACD collects this data to better understand the industry and to track how well member companies' RDP policies impact their safety records.

Among the interesting data compiled is the fact that our members distributed more than 1,525,000 tons of chemicals in the year 2000 in about 2,500 company-owned truck trailers that traveled more than 146,000,000 miles. These trucks were involved in 287 accidents in which there were 64 injuries and one fatality. There were 509 fatalities in the rest of the trucking industry that year and 21 in the public warehousing and storage industry.

The results from the 2000 data conclusively show NACD members are responsible stewards of the chemical industry. NACD takes this message to Capitol Hill and to federal regulators to tell a positive story about members' companies. NACD's goal is twofold: to measure yearly progress under RDP and to educate government officials on the responsible management practices of NACD members.

NACD on Security

The Responsible Distribution Process™ is an "evergreen" program and is committed to the same guiding principle of continuous improvement that it asks of each NACD member company. Over the years, NACD members have approved modifications to strengthen RDP. These improvements do not change the intent of RDP, rather, they address suggestions made by our member companies as RDP has developed over the years. Recently, the RDP Committee and NACD Board of Directors included new security provisions in RDP and these have been ratified by the membership.

Specifically, general security provisions have been added to the RDP Guiding Principles and in the Code of Management Practice under the codes addressing Carrier Selection, Handling and Storage, and Product Stewardship. These require that NACD companies take added measures to protect their facilities and the transportation and distribution of product against terrorism. For example, the RDP Guiding Principle now reads: "To make health, safety, security, and environmental considerations a priority in our planning for all existing and new operations, products, processes, and facilities." Security has always been a part of the RDP codes; it is now a major consideration.

All member-approved changes to the Responsible Distribution Process™ have raised the bar for the continuous improvement in health, safety, and environmental performance for each member company. The recent focus on increased security measures raises the bar another notch.

OPSEM

NACD held its first Operations Seminar and Trade Show (OPSEM) in 1988, attracting a handful of vendors and about 27 attendees. Today NACD limits the number of exhibits to eighty, and approximately three hundred attendees benefit by seeing the newest products and services geared for the industry. The educational seminars provide industry-specific best practices and regulatory compliance guidance to industry professionals. Of primary interest to the mainly operations level employees that attend are the countless networking opportunities to freely give and receive advice for common problems. For more information on OPSEM , visit http://www.nacd.com/Opsem/.

Washington Fly-In

To strengthen and enhance NACD's exposure with its regulators and lawmakers, for two days each spring, NACD members gather in Washington for the Annual NACD Congressional Fly-In. Armed with positive information related to the chemical distribution industry and information about proposed legislation and regulation that would be harmful to the industry, dozens of visits are made to Members of Congress, committee staffs and regulators. For the last few years, the Fly-In has also included a White House briefing and meetings with senior officials in the Executive Branch.

NACD maintains an active and visible profile on Capitol Hill and a close working relationship with officials at the EPA, DOT, Commerce and DEA. However, nothing substitutes for person-to-person contact between NACD constituents and their Members of Congress, and the Fly-In accomplishes that task most efficiently.

Two NACD Affiliate Programs allow companies not eligible for regular membership to share the interests of NACD members in promoting health, safety, security, and environmental improvement. Affiliates can attend NACD's Annual Meeting and can choose priority booth locations at OPSEM. For program details, visit http://www.nacd.com/Affiliates/.

The Affiliate Program for Non-Chemical Handlers is open to participation for non-chemical handlers that supply products and services to the chemical distribution industry. The types of businesses eligible for this program include containers/IBC's/drums/tanks, pumps/valves/hoses/fittings, measurement & monitoring instruments, transportation & logistics management, training, regulatory & legislative services, environmental & safety consulting, insurance, waste, recycling & spill recovery, business financial services, public relations/issue communications, and publications.

The Affiliate Program for Chemical Handlers requires a company to comply with the Responsible Distribution Process™ (RDP). This program expands and broadens the performance improvement efforts associated with RDP by sharing the initiative with companies and businesses that do not otherwise qualify for NACD membership. Public warehouses, carriers, liquid terminal operators, waste management, and recyclers are examples of companies eligible to participate in this program.

NACD has strong ties and works closely with its sister organizations worldwide. Meetings are held annually with representatives from the chemical distribution associations in Canada, Mexico, and Brazil.

NACD is a member of the International Council of Chemical Trade Associations (ICCTA), and chaired ICCTA in 2000-2001. ICCTA represents chemical distributors in more than 20 countries worldwide. ICCTA members are committed to safe and responsible handling of chemical products in all phases of the distribution process, including handling, storage, warehousing and transportation. As a condition of membership in ICCTA, member companies are committed to the principles of Responsible Distribution and Responsible Care^®. Over the past two years under the leadership of ICCTA President and NACD Chairman Pat Marantette, ICCTA has been working on Indices of Performance for the associations' memberships to demonstrate the value of RDP/RC globally.

Chemical Educational Foundation^®

The Chemical Educational Foundation^® (CEF) was originally founded in 1992 as the NACD Educational Foundation to establish a chemical product stewardship network to disseminate an important message of safe chemical handling to the NACD distributor members' 750,000 customers and their communities. Recognizing the evolving scope of the Foundation, as well as the coordination of various associations' product stewardship activities, the NACD Educational Foundation became the Chemical Educational Foundation^® in January 1998.

CEF has accomplished much since 1992, notably the publication of chemical safety bulletins, presentation of prestigious industry awards, publication of the You Be The Chemist youth educational programs, and the development of top-notch training programs for industry employees. In recent years, as the industry's outreach efforts have evolved in response to the changing needs and expectations of its stakeholders, CEF has taken steps to broaden its focus with programs that help CEF convey the industry message: chemicals enhance our lives, lifestyles, health, and well being. This education and dissemination of information to key segments of the North American public— media, students, and legislators—are now primary CEF objectives.

CEF's success continues to depend on the strong financial support from chemical distributors, manufacturers, and friends of the industry. For more information on CEF, visit http://www.chemed.org.

For additional information on NACD and an up-to-date listing of members, visit www.nacd.com.

Visit the "Chemicals" channel for reports on chemicals distribution, including the most recent distribution ranking (May 2, 2002 issue in "Archives").

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