Operating Chemical Supply Business During Supply Chain Challenges

Warehouse and Forklift

Triumphs and Struggles During Supply Chain Challenges 

2020 and 2021 have really been difficult years to operate any businesses in and 2022 is looking just as challenging. Since the start of the pandemic, managers and owners that are operating any business relying on a supply chain that stretches around the world have seen huge struggles. Supply chains continue to be stretched to the max and a lot of needed raw materials and chemicals are hard (sometimes nearly impossible) to source.

As the US economy has rebounded, manufacturers of basic chemicals have found themselves looking for scarce feedstocks, which has disrupted their ability to produce many needed chemicals used to manufacture other important products. For example, if basic chemicals like potassium hydroxide, sodium hydroxide, citric acid or very basic solvents like mineral spirits or acetone are hard to source, then consumer goods like paints, coatings, adhesives, and detergents are also going to be in tight supply since all of these are are building blocks for so many of these widely used products. 

What do these challenges mean for chemical suppliers?

As supply chain challenges have developed, chemical suppliers have really had to adjust to a new business model in the midst of ever increasing costs, tighter supplies, and labor shortages. One company we inquired about, Level 7 Chemical in Arkansas, shared some insight.

Mark Hughey, the owner of Level 7 Chemical, says that they have adjusted by reallocating resources as far as capital and personnel and have worked on becoming more of a sourcing company versus operating as a warehouser of chemicals – just stocking products and then being able to provide immediate shipping. “We have to use our time and resources differently now. Our focus is pointing our people in purchasing and customer service to align with customer needs and do more extensive sourcing. Informing customers, keeping them up to date about the challenges, and working on finding new suppliers are daily tasks. Anna, in charge of purchasing at Level 7 Chemical, says that “Every day we are seeing availability, supply, and price changes and it is all very challenging,” and added “we may not have the stock available in the warehouse and ready to ship “on demand” like in the past, but are now working with manufacturers and other distributors to get product shipped.” Mr Hughey commented that these changes have added more logistical challenges than in the past before Covid 19 started. Plus, on the purchasing side, according to Anna “since chemical costs have increased so dramatically, to help cash flow we can not have as much inventory.” Mr. Hughey relayed that they need to be “more careful in choosing what to stock in order to preserve cash flow and to be able to adjust to changing market conditions.”

Successes – Getting customers what they need, when they need it.

Over this past year, even during this tough situation as far as the supply chain disruptions, Level 7 Chemical says that they have had a lot of positives happen as they have met their customers’ demands head on. Tyler in customer service relayed several examples of how they have really come to the rescue and assisted many customers that were having lot of problems getting required chemicals and ingredients and how they kept customers up and running.  

Tyler recalled how a large auto part manufacturing plant was out of a specialty solvent, N-Methyl-2- pyrrolidone, called NMP, that they used as a cleaner in the plant. Running out of the NMP meant having to shut down part of the plant and sending many people home. She said that through their strong network, they located and procured enough NMP to keep the company up and running. Their new customer sent a truck down to the warehouse of Level 7 Chemical in Conway, on a Saturday, to pick up a drum to get them by until the rest of their shipment of 12 drums arrived. Tyler said the customer was ecstatic at not having to shut down. Because of our network headed up by Mr. Hughey and Anna B in purchasing, we kept the plant running and now we also are still supplying their NMP requirement. 

Another victory was when an oil and gas service company could not locate a foaming agent to get a well performing as needed. Their usual supplier could not provide their preffered foaming agent, Sodium Lauryl Sulfate powder used in the operations. The well service company found Level 7 Chemical on LinkedIn and Tyler and Level 7 was able to get the SLS powder shipped to W Texas and keep their crews working and their problems solved.  

If you are ever looking for chemicals and ingredients, even the hard to locate ones, we recommend giving Level 7 Chemical a call, or check out their website and request a quote on a chemical or ingredient, or any of the supplies they offer like pH testing strips or drum heaters for example.