November 7, 2019
Traditional chemical purchasing is straightforward. You search for the product with the best price, buy it, and it is yours. This seems like the best way to save money. After all, you are getting the lowest price.
But your search for the best price doesn’t include the soft costs. These are the hidden and often difficult to measure costs of chemical management. EHS reporting, storage, and shelf life expiration are examples. The cost of chemical management can be as much as 1 to 3 times the price of chemical spend.
This is the strength of Chemical Management Services (CMS). They reduce operational costs over time and enable customers to focus on their core competencies instead of worrying about chemical management.
That is because CMS programs reduce the total cost of ownership and drive efficiency at each stage of the chemical management life cycle. What exactly is the chemical management life cycle?
This life cycle refers to the full journey a chemical goes through upon being procured by a buyer. The main stages are generally broken down into the following:
In a well-structured CMS program, efficiencies and cost savings are achieved at each of these stages. CMS providers will differ in their precise offerings, but what continues are the features an ideal program should be capable of providing.
It all starts with…
Imagine an aerospace manufacturer needs turbine oil.
If their CMS provider is a distributor, this provider will first focus on finding the best suited product for the customer’s needs. That means having a reliable supplier base. Some distributors vet new suppliers to ensure they consistently deliver quality materials on time.
That helps the end buyer by increasing the percentage of standard-compliant materials they receive in each delivery.
Another way to be sure your chemicals are ideally sourced is to go through a supplier that does not manufacture their own chemicals. This vendor-neutral status assures they will provide materials best suited to your needs, not their own.
Now that the chemical has been sourced, it undergoes quality assurance.
Buyers benefit greatly by having this service included in their CMS program, as opposed to handling quality assurance in-house. It saves time, money, and labor that would otherwise be tied up in checking paperwork. It reduces the worry of stalled operations from inaccurate labeling and frees up staff to focus on core competencies.
Best of all, it allows buyers to stock deliveries the instant they arrive.
Proper chemical documentation goes in hand with quality assurance. It is especially important for regulatory compliance and being able to trace a chemical to its batch and source in case of problems.
A quality CMS program ensures all paperwork and documentation accompanies each chemical along the management life cycle. That way, compliance and traceability are a breeze.
Now that a quality chemical has been procured along with all necessary documentation, it is time for the next stage.
Chemicals are often sensitive materials, with strict storage needs and limited shelf lives. That makes them ideal for just-in-time (JIT) delivery.
By only delivering chemicals as needed, shelf life expiration is mitigated, reducing the amount of wasted material and scrap.
JIT also reduces the need for storage space. Buffer stock can be held offsite by the CMS provider. That frees the buyer from ownership costs, including the space and labor needed for warehousing. These resources can in turn be used more productively
Right-size containers is a service not all CMS programs provide, but it is extremely helpful in scrap reduction. By receiving only as much of a chemical as is needed, less material is wasted. That means saving on material spend, waste disposal, and simplified EHS compliance.
If quality assurance has already been provided, the incoming chemical can immediately be stocked.
Which takes us to the next stage of the chemical management life cycle.
Inventory is perhaps the single biggest contributor to chemical management costs. Part of this is from carrying costs. Another contributing factor is shelf life expiration.
Shelf Life Management
Quality CMS programs address this problem head on with shelf life tracking systems. These systems monitor chemical expiration risks, implementing a highly effective first-in-first-out (FIFO) system.
Scannable bar codes on each individual chemical makes this data instantly available. They also allow for easy traceability and tracking.
Tracking, however, plays heavily in the following stage.
This is how a chemical moves from the stocking cabinet to its point of use.
Accurate tracking is the first way Chemical Management Services help at this stage. It is especially important for companies with multiple facilities.
An effective tracking system can pinpoint not only the facility where a chemical is located, but also the precise point of use. That keeps chemicals from being misplaced or lost. It also prevents the ordering of materials that are already purchased and available within an enterprise.
Safeguards are implemented in the CMS program that control the movement of certain chemicals.
These gatekeeping controls keep hazardous chemicals from going where they should not or being mishandled. Worker safety is improved and regulatory compliance facilitated.
But now, the chemicals raison d’être has come. The next stage:
This is when the chemical finally gets used. It is not immediately obvious how a CMS program can help at this stage. The chemical is used…and that is it. What can be improved?
The answer: process efficiencies.
A full-service CMS program will deploy an on-site team to audit your operations and find opportunities for improvement in how your chemicals are used.
Improvements of this type can save your business hundreds of thousands of dollars each year. After implementing the process efficiencies identified by their CMS provider’s on-site staff, a large aircraft OEM achieve $5 million in annual savings from reductions in the volume of sealant purchased and hazardous waste generated.
Now that the chemical has been used, we continue in the chemical management life cycle.
Collection, or data collection, is not really a stage. Effective chemical management software collects data throughout the entire management life cycle. But the application of this data generally comes after the chemical has been used.
Effective chemical management software will automatically collect and organize data needed for regulatory reporting. This is critical for maintaining compliance with the multiple regulatory bodies that periodically require reports from your business.
This data collection is also extremely useful when it comes to material replenishment. Usage data can be collected and analyzed to create robust demand forecasts. This allows for automatic replenishment of regularly used chemicals.
Advanced forecasting is as simple as scanning bin bar codes that sends usage data to analytics software.
This means less human error, less chance of shortages, and the opportunity for your staff to dedicate themselves to higher-value work.
We now arrive at the final stage of the chemical management life cycle.
Chemical waste management and disposal presents many challenges and requires extra care with regulatory requirements. Especially when dealing with hazardous waste.
An experienced CMS provider, however, makes it easy. As experts in waste management, they know exactly how to properly handle, process, and dispose of different types of chemical waste.
That saves your team the time and headache of waste disposal and regulatory compliance.
Well-executed and robust Chemical Management Services reduce costs and drive efficiencies at every step of the chemical management life cycle.
While traditional chemical purchasing initially seems like the least expensive option, a good CMS program does more to drive cost savings in your business.
If you have more questions about how Chemical Management Services, Wesco Aircraft is here to help. We are experts in aerospace chemical management from procurement to disposal.