Dirk Verstraeten on the supply chain

NAVIGATING INTO TOMORROW

NOW IN HIS SECOND YEAR AS CHAIR OF EPCA’S SUPPLY CHAIN PROGRAMME COMMITTEE, DIRK VERSTRAETEN PROVIDES AN UPDATE ON PROGRESS ON THREE FRONTS

When he took over the chairmanship of the EPCA Supply Chain Programme Committee, Dirk Verstraeten, director of global logistics procurement at Covestro Deutschland, could not have anticipated that his tenure would include a pandemic-inspired global lockdown, with rapid and immense changes to chemical supply chains around the world. As the European industry gathers virtually for this year’s EPCA Annual Meeting, there are still questions about how the crisis is going to affect the sector in the longer term – and, perhaps more pressingly, in the near term too.

The big question to answer is this: how can the petrochemical industry contribute to building a smarter, circular and more inclusive post-pandemic world? The session ‘Standing Strong, Moving Fast’ on the second day of the Annual Meeting will look beyond the ‘new normal' from the supply chain perspective, investigating new business practices and trends accelerated by the Covid crisis. Speakers will aim to analyse, define and reframe opportunities to identify the right way forward to build the logistics and supply chain of the post-pandemic world.

It has been evident from the past few EPCA Annual Meetings that the petrochemical industry and its logistics service provider (LSP) partners are on a journey and that that journey centres very much around the process of digitising the supply chain. But that journey into the sunlit uplands of a cleaner, greener logistics sector has three paths: not just digitisation but also – and partly enabled by digital technologies – ways to address the industry’s contribution to climate change and to foster the development of a circular economy within the petrochemical industry.

“Digitisation is with us all the way on this journey,” Verstraeten says. “It’s changing: it’s now becoming part of the corporate strategy for some companies.” But not all, though; some companies are still thinking about it.

One way in which EPCA is pushing for a wider digitisation in the sector is to open up space on SCPC for tech companies and

start-ups, beginning not least by enlarging the group with Frederick Ronse, founder and ‘chief evangelist’ of Ovinto, a digital native company, with the objective of fostering EPCA connection with players in the digital and tech ecosystem to better understand the rapidly evolving dimension of innovative solutions in the logistics and supply chain. “Many of us have a lot of experience in logistics around the world but we needed another group of people to help drive the digitisation process,” Verstraeten explains, noting that Ronse’s arrival has opened a lot of doors to new people, bringing new ideas to the table.

Formalising that approach, the EPCA Board of Directors supported the creation of a new sub-committee under SCPC, the Digital Advisory Body (DAB), to expand its digital journey by bringing in insiders from the digital arena. “The idea is to create even more value for our members in moving from an inside-out to an outside-in approach,” Verstraeten explains. “After a few years of intensive work within our own industry and our LSP community, supported by Vlerick Business School, we have learned a lot from each other and made huge progress. Now is a good time to learn from other industries that are further down the digitisation path.”

DAB will consist of a diverse group of experts from academia, government-led tech initiatives and venture capitalists, offering a broader and wider overview and dynamic outsider perspective on digital transformation of the overall economy and the petrochemical supply chain in particular. Their main focus will be on projects and initiatives leveraging digital technologies to enable more environmentally friendly practices, which advance circularity principles in the supply chain and/or reduce its CO2 emissions.

“We are honoured that they have accepted our offer to engage with us,” Verstraeten says. “We are convinced that this will help us in identifying new opportunities, challenging our industry and creating best practices that our esteemed community members can use in their daily challenging environment.”

The second path in the journey is climate change, which Verstraeten describes as a “major topic”. It was discussed during the ‘Digital Café’ event as part of the 2019 EPCA Annual Meeting, as digitisation is seen as a way to help achieve the environmental advances that are required – and are increasingly being demanded by regulators and the public at large.

But, if wallets are empty, as they are for many during the current economic conditions, reducing a company’s cost base can conflict with the demands for emissions reductions. On the other hand, there are plenty of projects under way in various fields, not least in the use of hydrogen as a power source. While economics will always play a part, digitisation

may offer a way to enable a stronger focus on sustainability, Verstraeten thinks. Again, this question will be discussed during the supply chain day at the EPCA Annual Meeting.

The third path on the journey – developing the circular economy – represents a big challenge. Industry will have to think about reducing the volume of waste it generates and increasing the re-use and recovery of material. Here the supply chain will be called on to play its part. And, Verstraeten insists, “it is going to happen”. Chemical manufacturers will have to take responsibility for their products and the containers they are shipped in, even after delivery.

Underlying all this is the current generational shift within the industry. Older people are generally comfy with the old way of doing things but they are being replaced – possibly even more rapidly during the current pandemic – by a new set of people with different skills that will be brought into play in the creation of the ‘new normal’. It is a dynamic employment environment right now, with new faces bringing new ideas. And it is the young in particular that are driving demands from end consumers for the circular economy.

These fundamental changes need an open mind to be assessed and EPCA has certainly done its best to find one to give the keynote presentation during the supply chain session at the Annual Meeting. Peter Hinssen of nexxworks, a sought-after author and speaker, will set the stage, putting the ‘New Normal’ into perspective, showing the impact of new trends and sharing his remedy for companies to recover and thrive in the post-pandemic world.

This keynote presentation will be followed by three speeches in response from diverse players in the petrochemical supply chain: a trader, an LSP and a chemical distributor. They will team up on stage to find together an industry recipe for the ‘vaccine’ to prevent further disruption and ensure growth and innovation. Speakers include Gina Fyffe, CEO of Integra Petrochemicals, Jan Arnet, CEO of Bertschi, and Christian Kohlpaintner, CEO of Brenntag. A panel discussion and opportunities for questions from viewers will round out what promises to be an illuminating and informative 90 minutes, kicking off at 14.30 CET on 6 October.

But the session will not be able to tell people how to go about taking the journey. “Everybody has to follow their own path,” Verstraeten says. It is clear that some in the industry are still struggling to find the right enablers to help them make a start. After this session, they should be a lot better equipped to do so.