As chemicals are key to India’s industrial and manufacturing transformation, digitization would be key to both the chemical industry and its future logistics transformation and competitiveness. Connecting buyers, suppliers, transporters, and third-party logistics providers through a robust digitized platform to collaborate and conduct business will be a game changer.

The first session of the first edition of “ChemConnect 2022”, Logistics and Supply Chain Event, organized by Indian Chemical News (ICN) on September 21, 2022 at The Lalit, Mumbai, dug deeper into the digital strides made so far into chemical logistics. The session titled ‘Digitization in Chemical Logistics’; moderated by Pravin Prashant, Editor, Indian Chemical News witnessed prominent speakers discussing the digital initiatives. 

“We believe that there is a lot of room for optimization and bringing in better visibility at larger scale, predictability and reliability in terms of inorganic chemicals that we handle at Tata Chemicals. All this was underlined much more during the few years of Covid-19 when we had disruption and anxiety among customers about how delivery would be. When we speak to our supply chain management colleagues there are a lot of factors they look at. These include having the right product, right quality, time, right quality and right price. The focus now is also increasingly from ESG, safety and other parameters,” said Rino Raj, Chief Information & Digital Officer, Tata Chemicals.

 “The large amount of these exercises we have done, such as institutionalizing the digital practices are in terms of pilots we have tried. I would say these fall into three buckets. One is increasing connectivity and that is in pockets. It is not necessary that we have end to end visibility in any of the businesses we have. That said, the visibility in each of these pockets have become better and better. There is increasing connectivity between these pockets and extended stakeholders such as logistics partners and suppliers. Logistics is an area where it is not only about you but how others are planning and shipping to you and how well are you anticipating. One part is visibility and integration and the second part is planning. A large number of tools are there and we have started trying some. There is a very interesting challenge in terms of what people expect and what software recommends and whether customers trust it. It leads us to the third bucket which is automation. It is still much far away,” added Raj. 

“Forget about the MSME units, there are large units which have reasonable systems in place which take care of their internal operations. For example, there is a good deal of seamless communication through systems between planning, production, marketing, warehouse and so on. The companies also have used

digitization in their procurement, in their negotiations. So for example if I am doing a negotiation with a supplier, there are digital tools which will bring down the cost. But we need to go much beyond that. If I have gained 2% on the freight cost from the supplier or transporter, then they have lost the 2% on their part. Now this is not sustainable as there is a limit to how much you can pull down the supplier and also that supplier will start compromising on the quality of material or the service. We have seen this during the pandemic when the shipping industry started losing their money. Later when they got their opportunity, they jacked up their rates so much that all the user industry and the chemical industry got into the mess,” said Vivek Gadre, President - Corporate Strategy, Atul Limited.

 “The next level should be not on the price but should be on cost. In India more than 30% of trucks move empty which is a huge loss which doesn’t benefit the transporter. In the US and Europe, it is 20%. Here digitization plays a good role and if there is a matching between demand and supply then there will be a lot of cost saving. This is how digitization should proceed further to narrow the boundaries of our companies and go to the much wider industry level platforms, taking into account safety, sustainability and so on,” added Gadre.

 “As far as digitization in chemical logistics is concerned, I believe there are two extremes. One is small and medium enterprises which are just warming up or haven’t even started. Second is the large scale companies who have already implemented digitization at a higher level and are using up to 5% of sales budget on such activities. Again there are two extremes that are keen on digitization. One kind is the set of companies which are spending heavily including the 90% which spend on operations such as tracking, visibility, traceability but little initiatives are taken on strategic decision making. We have seen a lot of disruption in global logistics in the last couple of years and that has opened up new opportunities. Alternative operations, multi-modal routes are the new initiatives but these are happening whenever need arises. However, if it can happen on continuous basis such as big data analytics and digitization of export import data of various countries which can throw open new opportunities and decision making that is missing even in larger companies,” said Mahesh Khetan, Vice President & Global Head – Supply Chain, Grasim Industries Limited (Advanced Material) - Aditya Birla Group.

 “The integrated demand and supply plan has to take into account planning including logistics, starting from forecasting the sales and which translates into the raw material procurement plan which then translates into the production plan and further into the logistics plan. As we have witnessed in the past couple of years, the vessel availability and schedule reliability has gone for a toss. So when vessel availability is so much of a constraint, we need to plan and book the vehicle space one month in advance. The days are gone when shipping lines didn’t charge upon cancellation. But now the booking is permitted only when you pay, particularly for US cargoes. Therefore, we are moving from pure digitization of operational KPIs towards the digitization in terms of strategic decision making,” added Khetan.

“We are using GPS, engine diagnostics, driver monitoring systems but we are yet to reach the level where autonomy will come into the picture eventually which is also complex given the current scenario. If we want to reach there, we have to identify the challenges on the road in terms of logistics, driver behaviour, overall visibility and transparency of all data points that we gather from vehicles. Lot of sensors are required to track the various aspects such as hazardous chemicals, vehicle temperature, tyre pressure and much more. The data can help in making real time decisions to prevent such accidents,” said Nisarg Pandya, Founder and CEO, drivebuddy AI.

“We have been working with many leading chemical transporters in India and in the last two years we have seen them facing many challenges in adopting digitization and technology. First part is they try to figure out whether the chemical companies they are working with will help them in the adoption of digitization as it is a cost for them. They also expect some kind of recognition and better compensation for making the first move towards adoption. Second is improving the turnaround time for each trip and better financial prospects for fleet companies. For that we need to identify which driver is suited for a particular condition of driving. For example, with help of data you can segregate the drivers who can drive better during the night time. It helps in risk assessment at the beginning of the journey itself,” added Pandya.

The conference themed as ‘Creating a Robust Ecosystem’ has lined up the country's top industry captains for the most comprehensive dialogue on the various key topics. The event is supported by platinum partner- Netradyne; gold partners - Carbanio, Moglix, and DriveBuddy AI; regulatory knowledge partner - GPC; tech partner, Ezbiz Technologies; and media partner, Indian Pharma Post.