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SOURCING OF MATERIALS AND SUPPLY CHAIN MANAGEMENT

There are three different general approaches for selecting and sourcing materials for use in formulations and compounding: (a) Internal sourcing of materials, (b) sourcing of materials from suppliers, and (c) use of formulation and compounding service providers. 

Companies often use a combination of at least the first two resources, and some companies use all three resources.  Internal sourcing involves the practice, by a company, of the vertical integration of its supply chain, by sourcing the key building blocks used in producing their polymeric products internally.  External sourcing involves the purchase of these building blocks from other companies.  For example:

  • Dow Chemical once produced both styrene monomer and polystyrene made from this monomer. It then sold or shut down many styrene manufacturing plants and also spun off its styrenic polymers business and some other businesses as Trinseo in divesting itself of low-value commodity businesses.
  • Dow Chemical, a leading supplier of polyether polyols, also provides, through Dow Automotive Systems, polyurethane foam technologies for automotive use. Hence it provides the technology and some of the key precursor formulation ingredients for the implementation the technology, but foaming is normally done at a customer’s automotive manufacturing facility, since selling the precursors and the technology is both more convenient and of greater value than selling the finished product.
  • Avantium manufactures both the furanics family of biobased monomers and the thermoplastic polyester poly(ethylene furanoate) which is a completely biobased and hence more sustainable alternative to PET. This topic was discussed in a post titled A PLANT-BASED RENEWABLE ALTERNATIVE TO PET (created 09 November 2018).

Hence, companies pursue whichever strategy is likely to generate the greatest value, involving any one or combination of: (a) Internal or external sourcing of key polymer building blocks, (b) licensing or teaching of polymerization technologies for using those building blocks, and (c) preparing the polymers in their own facilities.  Producers of finished polymeric products (such as polystyrene or automotive polyurethane foam) will often purchase the key building blocks (such as styrene monomer or polyether polyol) from other suppliers, but sometimes the same company will produce both a building block and a finished polymeric product made from that building block.

Polymeric products often also use additives for enhancing processability (catalysts, surfactants, rheology modifiers, etc.) and/or end use performance (plasticizers, impact modifiers, dispersants, coupling agents, fire retardants, etc.).  Most often, the manufacturer of a finished polymeric product will purchase most or all of these additives from companies specializing in manufacturing additives.  There are a few leading suppliers specializing in the manufacture and sale of each of the major different types of additives.

It is also common for polymeric product manufacturers to work with formulation and/or compounding service providers to obtain complex combinations of ingredients used in manufacturing products or even sometimes to obtain the products themselves.  For example:  (a) Clariant is a global leader in color and additive concentrates and performance solutions for plastics, (b) RTP Company is a leading thermoplastic compounder, and (c) Adhesives Technology Corporation is a contract manufacturer of epoxies, polyurethanes, polyureas, polyesters, methacrylates, and their hybrids.

It can be seen from the discussion above that there is an elaborate supply chain in industries involved in the production and distribution of polymeric products.  The optimized management of supply chains is a specialized field.  Aspen Technology (AspenTech) provides a valuable software tool for supply chain management, with the features summarized in the snapshot provided below from the product literature for this software package.  Polymer supply chain management applies the general principles and techniques of supply chain management to the area of polymeric products.

aspenOne Supply Chain Management

Call Bicerano & Associates Consulting, LLC at (912) 235-2238 or use our online form or email us at info@polymerexpert.biz today!

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