According to Mohd Yusri Mohamed Yusof, managing director and CEO for PETRONAS Chemicals Group Berhad, supply chain issues are "a distraction we have to manage."
Yusof broke down his approach to supply chain management into three levels.
"First, we try to create flexibility in how we look at the supply chain," he said. "We have to look at what options we have, [like] maybe multiple and different types of containers."
The second level, he said, is for companies to commit to those options in order to reach their desired customers.
"We have to work with the regulators to make sure our customers get what we promised they were getting," Yusof said, speaking on a panel at the World Petrochemical Conference 2022.
The final level, he said, is learning how to manage not only the regulations but also the regulators - a lesson leaders industry- wide learned, especially during the early days of the COVID-19 global pandemic, he noted.
"Ships had to wait for two weeks for crews to be quarantined before they could even enter the port," Yusof said.
Yusof reflected on the challenge for industry to conform to the constraints caused by COVID-19 restrictions that were established to protect the workers, balancing protocols and safety measures recommended by scientists and health care professionals versus the economic impact of those restrictive recommendations.
"We did what we could," Yusof said.
Luis Serra, president and CEO of NOVA Chemicals, shared his "glass halffull analysis" of supply chain disruptions.
"We talk about supply chain issues as a bad thing, but there's also a good part of it," Serra said. "For North America, the ability for others to export into the continent is getting harder. The difference ... between China and North America, for example, was and continues to be at a very elevated level."
That difference, Serra said, is providing opportunity to North American manufacturers, "and we're certainly taking advantage of that."
Serra pointed to the conundrum of the economics of container ships traveling across oceans.
"There is a significant difference in direction with the same container crossing the same ocean going east or west. One price is 16-times more expensive than the other, so we have the opportunity to go in the opposite direction and take advantage of that. Those are good things," he said. "We're also able to benefit from this."
Using local suppliers to source local markets means less competition from imports and getting a more advantageous freight rate, Serra explained.
"We should try to make as much use of that as possible," he said. "We don't export a lot."
Addressing the necessity and eventual reward of industry working with regulators, Tom Crotty, director of INEOS Group, said his company was able to "kick off a new consumer business because of COVID-19 - our hygienics business of alcohol products, wipes, hand sanitizers and so on."
"That required, collectively, a lot of flexibility on regulations," he said. "There are certain restrictions in moving alcohol around in terms of customs, excise duties, etc. We had a lot of cooperation with every government we dealt with to streamline that process so we could get into production quickly.
"I think there were lots of positives." Crotty called circularity "a new supply chain consideration."
"Circularity is a massive deal for our industry," he said. "We're all working hard on advanced recycling techniques, and we're making good progress.
"The supply chain requirement to move to feedstock, which is used plastic, is huge. That's a new supply chain that has to be built virtually from scratch."
Serra said the adoption of circularity is an example of where the industry "can see the light at the end of the tunnel" with decarbonization.
"Circularity is a lot more complex because there are a lot more actors involved, from public landowners to us and our customers," he said. "It takes a lot more coordination and interaction across the whole supply chain."
To most effectively make change happen, Crotty said, industry leaders must engage in a "perfect triangulation" among the consumer at the end of the supply chain, the industry and with regulators.
"That's where we have to have a lot of cooperation," Crotty said.
