We salute the chemical industry for standing up to the pandemic with an immediate and overwhelming response to meet the dynamic shift in markets. Chaos and confusion were quickly turned to organized and directed actions to ensure continuing operations as front line combatants in a global war against the invisible enemy.
America’s chemical industry was the linchpin to ensuring the safety and protection for frontline health workers and first responders with highly specialized cleaners and sanitizers for use on the person and physical spaces. General-purpose soaps, cleaners, disinfectants, and sanitizers were provided for the rest of the world to use as key weapons of war when combined with enhanced awareness of best personal practices for handwashing, social distancing, and quarantine to reduce infection and contamination rates.
But this disruption didn’t only affect the obvious products; it went deeper into the materials that make other materials used in this battle. Plastics [and other materials] were used in the production of containers and packaging for the mentioned products, PPE for health workers and responders, as well as parts and components for medical equipment (inhalators, testing instrumentation, etc.) Other specialty chemicals were used by pharma, diagnostic, and healthcare maintenance operations.
The pandemic exposed how ubiquitous the chemical industry is when considering our needs and facing urgent survival situations. Credit should go to the operational, management, and leadership teams for their outstanding performance at this time.
Operationally, this unprecedented shift in need caused an immediate shift in forecast demand along with challenges of realigning the supply chain through rapid product rationalization (demand to zero on some products versus infinite demand for others) and resulting sales control.
For many companies, it also exposed vulnerabilities of material supply chains by relying on a single source, or major portions of material and ingredients from global locations suddenly made inaccessible with government actions to close borders as citizen safety protection protocols.
As we look out towards recovery, questions flood in:
When will the recovery happen?
What will the recovery look like?
Which of my products will survive, and what will demand look like for those survivors?
How can we mitigate and/or balance out these supply chain issues?
Are we organized and have the right team to meet these new challenges?
The IMF is predicting that Advanced Economies will experience significantly greater impacts from this pandemic (see graph below), so certainly each of the concerns above, along with many others, are valid C-suite and boardroom concerns.