Precise planning for supply chain success

As one of the leading manufacturers of industrial gas, Air Products has established a successful supply chain strategy crafted from industry experience, best practice, and knowledge sharing by global counterparts.

So says Maropeng Bahula, general manager of bulk gases and supply chain.

Bahula is of the opinion that individual strategic focus areas within the supply chain should be treated with equal importance. This, he says, is the reason for the company’s success and strength in this area.

He explains that Air Products’ supply chain ecosystem contains both inbound and outbound logistics: “The inbound logistics include the strategic sourcing of equipment, consumables, spares, and services, as well as warehousing of critical spares. Outbound logistics, on the other hand, include the delivery of bulk gases to our packaged gases depots and to bulk customers nationally.”

According to Bahula, Air Products has established measures to optimise the company’s supply chain over the years. Metrics are in place that are tracked on a day-to-day basis to achieve specific objectives. In terms of sourcing, the company has robust processes to procure goods and services at competitive prices, thereby ensuring that its customers benefit from well-priced input materials. “We continuously test the market to ensure that we are paying competitive prices for goods and services we procure,” he notes.

Driver efficiency is also measured, and non-driving delays are minimised to keep distribution costs to a minimum. Flowmeters have been installed on tankers, which helps from an efficiency perspective: the company is able to accurately measure the product being delivered to a customer, while weighbridge delays are also eliminated.

Bahula says that deploying capital by purchasing new truck tractors and tankers is key to ensure that sustainability objectives are achieved. “By making informed purchases, the more efficient vehicles play a crucial role in reducing our carbon footprint. By optimising our tankers to a specific gas service, we are able to maximise our payloads, which ultimately assists us with our sustainable supply chain management endeavours,” he elaborates.

Air Products’ supply chain success is underpinned by data analytics and technology that is used daily. According to Bahula, telemetry and enterprise resource planning (ERP) system JD Edwards is the backbone of Air Products’ distribution operations. “This enables us to download reports and data that provide insights into operations and performance. Telemetry is a powerful tool that monitors storage tank levels at customers’ sites 24/7,” he explains.

Bahula mentions that 2020 was the most difficult year – not only for Air Products, but for companies globally – and that the effect is still felt today. Shipping has been the biggest challenge, as lead times were extended when shipping lines were under pressure. Imported equipment that typically took six to eight months to be delivered previously, now frequently takes up to 14 months from the order being placed until it is received.

“Planning is mission critical. We are faced with having various product sources and plant configurations, customer locations across the national footprint, cross-border customers, tanker sizes that vary depending on customer storage tank sizes, and so on. Within the industrial gas manufacturing industry, there are stringent requirements, as well as several protocols we need to follow to meet all the regulatory requirements pertaining to dangerous goods transportation,” says Bahula. “These factors all need to be considered, which makes planning critical to ensure that customer requirements are well understood and met on time and in full, without violating regulatory requirements.”

To maintain the high standards of service delivery and security of supply to key customers within the regulatory framework, Bahula states that Air Products’ supply chain is set to achieve clear future objectives. These include reducing input costs; reducing its carbon footprint; improving fuel efficiency, vehicle utilisation, and driver efficiency; minimising inventory; and optimising the bulk gases delivery process.