Purchasing urged to seek innovation in supply chain

16 December 2004
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16 December 2004 | David Arminas

The chemicals industry has been urged to improve its supply chain knowledge and efficiencies or miss out on innovation, eventually losing competitiveness.

Speaking at the launch of the Society of Chemical Industry's business strategy group, SCI director John Randle said the pressure to look at supply chains for best practice and innovation had never been greater.

"Think along business lines such as corporate social responsibility, outsourcing, anti-counterfeit product programmes and drill down into supply chains for innovation," he told members.

Randle, who is also director of corporate services at BASF, said the strategy group will act as an international forum for these issues. He said: "We have to look down the supply chain, and not to just target that section of traditional chemical raw-production companies or first-tier users of chemicals. We must get all the companies involved in this."

He urged purchasers to have ideas on boosting competitiveness: "There is much for purchasing people to be involved with."

Sir Tom McKillop, chief executive of pharmaceuticals firm AstraZeneca, told the event that European companies had lost their lead in research and development to US firms.

He blamed under-investment in healthcare, an increasing burden of regulations to get new products approved for sale, and the growing trade in so-called parallel drugs, products that are illegally for sale in certain markets, despite marketing agreements.

McKillop told SM: "As profit margins get squeezed, purchasing is increasingly important. In our business, we put increasing emphasis on things such as category management."

He urged firms to use their procurement departments to create the right relationships for innovation: "We need more purchasing people to get involved in the SCI. We need innovation in services you provide and how you approach things."

The SCI was established in 1881 and has members in more than 70 countries.

SMdec2004

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