Chemtech Inc is a leading company located in Minnesota, which provides all sorts of industrial cleaners to different types of industries. The company provides solutions to different companies that seek to make their workspace safer and more reliable, with custom-made products that are applicable to a wide range of situation. It exclusively engages in various manufacturing activities as well as value adding activities like packaging, designing, the actual production, and shipping of the finished products to the target market or specific clients. Chemtech has fully embraced the use of environmental friendly technology, since all its products are termed as non-biodegradable.
Potash Company is one of the leading suppliers for Chemtech Inc. Although the company is located in the United States, it sources products from different places like Canada, and has a wide range of clients that include leading companies, alongside Chemtech. The company is devoted to developing long-term relationships with its supplier, and is aiming at building better relationships with its clients in order to ensure reliability and sustainability of its business.
The supplier-consumer Potash-Chemtech relationship is significantly hindered by lack of a long-term or a contractual basis relationship. Both partners quite understand the shortcomings from each side, and Chemtech has gone ahead to voice its genuine concerns about delays in supplies, long and slow procurement process as well as inefficiencies in the supply chain that affect its operations (Coyle et al, 2008, pp. 588). On the other hand, Potash understands these complain, but it would take a considerable deal of efforts and resources to streamline their operations in order to serve Chemtech better. Since their relationship is not contracted and can be terminated at any point, it would not be a wise move for Potash to invest many resources in streamlining things for the sake of Chemtech.
Potash has difficulties in sourcing for supplies from different places due to the distances involved. Their supply chain process is quite slow, but as the director of marketing at Potash admits, it would be possible to change this in order to suit companies, as Chemtech, but this would be quite expensive. Although they maintain an inventory for Chemtech’s needs, it would require more resources in planning for Chemtech’s many demands that are sometimes unpredictable.
Chemtech relies on the consumers to place orders for the products that they need, then they source them from the suppliers. The logistical problems that they face in this case is that although they can plan in advance for orders placed, the suppliers take time to deliver some of the products. On the other hand, consumers at times have urgent needs that cannot be catered for urgently due to the complex and time-consuming process. This results in delays thus a lousy business move. The company also has the habit of changing suppliers who do not deliver timely, whereas the problem is partly on their side. This habit is what limits companies like Potash from dedicating many resources towards the company, since the contract can be terminated at any point.
Chemtech seems to be unable to meet its client’s demands on time, and it is genuinely concerned that is why it keeps changing the suppliers. However, this approach is not working, but what is needed is for the company to do better planning and plan for unseen contingencies, since this will lead to better relationships with suppliers and faster deliveries to the clients. A company facing a similar challenge is Covidien, a global supplier of various medical equipment. The company has a wide market base with branches in different countries of the world. Some of their products are centrally manufactured and have to be procured from a central location. The fact that demand keeps fluctuating because to competition and change in market demands makes it difficult to accurately predict the demand, hence source for raw material in time as well as deliver supplies to the market in time.
Works Cited
Coyle, John. Langley, John. Bardi, Edward. Gibson, Brian and Novack, Robert. Supply Chain Management: a logistic perspective. New York: Cengage Learning, 2008.
http://www.covidien.com
