The Strongest Link: How A Flexible, Robust Supply Chain Ensures Industry Leadership
Air Products South Africa is a leading manufacturer, supplier and distributer of industrial and specialty gas products to the local market. The company has operated in South Africa since 1969, and has become a force to be reckoned within the on-sites, bulk, cylinder, specialty gas and chemicals supply markets, priding itself on an innovative culture and industry leadership.
When it comes to key managerial functions, the company places a key emphasis on effective supply chain management. In fact, the company sees its supply chain methodology as integral to success in maintaining its leading market position within the gas industry in South Africa.
This is according to Nalen Alwar, Supply Chain Manager of Air Products South Africa (Pty) Ltd. “Supply chain practice and methodology within Air Products has become a key focus area,” he explains. “However, we have become increasingly aware over the years that an effective, well-integrated supply chain is fundamental to the success of a company, both from an operational and a strategic perspective.”
“At Air Products, we aim to be both lean and agile in our approach, or ‘leagile’, and that ethos forms the basis of our supply chain methodology.”
He continues: “The two main objectives for us are, firstly, to be efficient, and secondly, effective. It is an interesting balance, and sometimes – of necessity – there is a trade-off between these two objectives.”
Alwar explains that efficiency, in simple terms, is about keeping costs down, while effectiveness relates to how the company pursues its overarching strategic goals. “In pursuing those goals, it is necessary to become both adaptive (responsive) and resilient, and therefore effective in a dynamic, ever-changing environment.”
Donovan O’Grady, Distribution Manager for the Bulk division of Air Products SA, explains that, from an operational point of view, the use of the best available technology plays a pivotal role, notably in distribution.
Continuing on the theme of being lean and agile, O’Grady says: “In distribution, we use specialised software to ensure proper route planning and logistical efficiency. The programme predicts the delivery schedule, creating the optimal route in order to save on mileage and fuel.
“We also manage our vehicles by the use of GPS and tracking devices, which has a number of functions, including ensuring safe driving practices.”
Air Products uses a telemetry system, which is key to managing supply and demand. “The system monitors our customers’ supply levels, and alerts us when replenishing is required. This is extremely effective in enabling us to plan, and to always be ahead of the game,” O’Grady says.
Technology is also an enabling factor, as it provides key feedback mechanisms, says Alwar. “Technology allows for analysis in order to examine our own efficiency levels”, he maintains. “The data provides very useful feedback for analysing costs and to what extent a transaction brings value to the company.”
While predictive software and enabling technology provides useful feedback mechanisms, Alwar warns of the dangers of relying heavily on historical data.
“For example, tank levels change all the time according to the changing needs of a company. In addition, there is the wider environment which fluctuates constantly,” he says, citing the example of the recent economic downturn. “That is why the supply chain is referred to as a Complex, Adaptive System – demand fluctuates at different rates, it is a living system, which is why a company needs to respond and be able to adapt accordingly.”
Part of a company’s capacity to adapt to change is dependent on what Alwar calls their “regenerative resource” – people. “For a great supply chain, which really works, you need broad-thinking people, people who think flexibly and efficiently, always keeping in mind the overall interests of the company. In an intra-firm situation, it is easy to focus on individual business units, and lose sight of the bigger picture,” he cautions.
Alwar continues: “Air Products encourages knowledge-sharing behaviour, which is critical when keeping in mind the overall company strategy. Communication on all levels is key, in order to gauge what is happening in the market. Thus, the Marketing function forms a pivotal part of the supply chain, as do other ways of information-sharing, such as regular, informal meetings and external and internal surveys, which Air Products conducts on a regular basis,” Alwar says.
Air Products’ successful supply chain methodology is in part due to progressive and innovative leadership, according to O’ Grady. He attributes the company’s ‘thinking-out-the-box’ approach to “visionary” leadership. “You need to be stay one step ahead, in supply chain management”, he maintains,“ which requires flexible, creative thinking in a dynamic environment.”
Alwar agrees, adding the importance of being able to ‘stretch’ in terms of capacity, as demand requires, but also being able to retract in ‘leaner’ times.
“No longer is supply chain seen as an isolated, linear process. It is a highly complex management function that requires a company to constantly adapt to a changing environment in order to maintain the leading edge,” he concludes.
Published on November 11, 2010 in Air Products News |
Air Products – ensuring security of supply, anywhere, anytime
Air Products South Africa (Pty) Ltd. has proudly served Southern Africa’s industrial gas consumers for 41 years. The company manufactures, supplies and distributes a wide variety of industrial and speciality gas products to an equally extensive range of local industries. With an innovative mindset, Air Products is constantly looking for new ways to provide optimum service and appropriate solutions to its customers.
A subsidiary of Air Products and Chemicals Inc., the company has used its world-class production and distribution facilities to become the largest supplier in the over-the fence gas supply and pipeline market, as well as a formidable participant in the bulk, cylinder, speciality gas and chemicals supply markets in South Africa.
Air Products’ expertise and resources benefit, among others, the steel, food processing, mining, petrochemical, engineering and automotive industries.
In any of these industries, the concern is to keep production constant, and down-time to a minimum. In many cases, continuous production is reliant on an uninterrupted supply of gas. An intermittent or unreliable gas supply could mean significant losses. This is why Air Products ensures that security of supply is a priority.
Sachin Kulkarni, Air Products’ National Sales Manager for the Bulk Division explains: “We simply have to make sure that our product is available all the time. So we make sure that we have appropriate storage and delivery plans.” He emphasises the importance of adequate storage, in the event of some kind of transport delay. “We want to avoid the risk of an emergency situation,” he says, “and so we always ensure there is site specific and adequate storage capacity at our plants, as well as at our customers’ facilities.”
Air Products’ two larger manufacturing and storage facilities are located at Vanderbijlpark in Gauteng and at Newcastle in KZN. The Newcastle plant has recently undergone a multi-million rand refurbishment and expansion. This very major upgrade was in response to the demand for a continuous supply of oxygen to a steel-processing plant in the region.
Regional Sales Manager for KZN, Jasper Allardice, explains that the greatly enhanced capacity at Newcastle has gone a long way to ensure security of supply for Air Products’ customers in KZN. But he explains that there are other factors which are just as important, such as the availability of road tankers for transporting the gas: “We have a dedicated fleet which operates 24 hours a day, and we make sure that there is enough flexibility in our fleet to allow for uninterrupted distribution.”
In addition, as Kulkarni explains, Air Products keeps its fingers on the pulse by holding regular supply-chain meetings. “At these weekly meetings, we look at dynamic trends in the market as well as at customers’ needs in terms of storage, and then we plan for the following week accordingly.” All important role players, including Sales, Onsites Operation, Packaged Gas Production and Distribution participate in these meetings. “If, for instance, we see demand shifting in a certain area, we have the flexibility in our facilities and storage management planning, and can quickly make the necessary adjustments,” says Kulkarni. “All three departments interact, in order to act effectively when our customers require it.”
Air Products also makes sure it remains in touch with its customers’ needs via the company’s innovative Telalert on-line telemetry system. Kulkarni describes this system as “a key component in managing both supply chain risk and security of supply.”
He explains that Telalert enables Air Products to closely monitor an individual company’s demand patterns. “The system helps us to understand our customers’ gas usage patterns better. It alerts us well before the critical stage, so we can plan our supply options timeously.”
“In the gas industry, it is all about putting the customer first and winning their trust,” says Allardice. “We aim to be as flexible as possible in our approach, so that we can offer, not only the best quality gas products, but also the safest and most reliable service,” he concludes.
Published on November 11, 2010 in Air Products News |
Bulk gases in South African mining – a vital link in the process
Air Products South Africa has been supplying gas to South African industry for more than 40 years. The company supplies both industrial and speciality gas to a vast array of industries, from steel to paper and pulp, petrochemical to engineering. And nowhere is gas more vital to industrial processes than in mining.
Air Products has established ongoing supply relationships with a number of mining operations in Southern Africa. These operations include gold, platinum, uranium, iron ore and coal mines. In some cases, such as platinum processing, Air Separation Plants are established on site, due to the large volumes of oxygen required.
However, when it comes to the supply of bulk gas to a gold mine, for instance, the liquefied oxygen is transported to the mine in one of Air Products’ cryogenic tankers, before going through an on-site vaporising process.
Sachin Kulkarni, Air Products’ National Sales Manager for Bulk Gases, explains that leaching is the main application for oxygen in minerals beneficiation. “Oxygen plays a hugely important role in the leaching of gold, platinum and uranium,” he says.
“In gold processing, the injection of oxygen into the leaching tanks increases yield and reduces the processing time. So obviously there is a huge incentive for gold processing operations to include oxygen in the equation,” he says.
In one of the uranium leaching processes, oxygen is used in autoclaves, where acid leaching takes place under extreme pressure and temperatures. This demands a reliable supply of large volumes of oxygen at high pressure.
Air Products is involved with yet another application of bulk gas in the mining industry – again with positive results for the environment. The company has had a great deal of success with the use of ozone in the destruction of cyanide in gold tailings slurry.
By adding ozone, the cyanide in the slurry is effectively broken down, allowing the tailings to be safely re-introduced underground to be used as backfill. This has significant benefits to the mine in terms of reducing the quantity of tailings sent to surface dumps and allowing water draining from the talings to be recycled back into the mine’s system. The overall benefit is the minimising of the release of heavy metals and cyanide compounds into the environment. Kulkarni explains that when it comes to dealing with cyanide tailings, Air Products offers a complete solution for its customers. While the process is operated by the customer, the system is owned and maintained by Air Products.
“This is a tailored, value-add to our customers: we look after the system and maintain it, making it easy for the customer and giving him complete peace of mind,” he adds.
Apart from oxygen, which forms the main part of Air Products’ bulk gas supply to the mines, nitrogen also plays an important role – in the blanketing of fuel in storage tanks, tyre filing and in the extinguishing of underground fires.
Part of Air Products’ success in the supply of its bulk gases to the mining industry rests in its security of supply strategy.
In mining, as indeed in any industry reliant on gas for its processes, it is critical that interruptions in supply are avoided. Air Products has a sophisticated and multi-pronged process in place to ensure continuous supply. A key component in the strategy is an on-line programme, ’Telalert‘, which assesses a customer’s requirements in real-time. Nalen Alwar, Supply Chain Manager explains: “The system constantly keeps us updated about the quantities of gas remaining in our customer’s tanks. It alerts us well before the critical stage, so we can plan our supply options timeously.” He goes on to explain that the on-line Telalert system provides information to both supplier and customer, so that both parties have a good understanding of the customer’s gas inventory.”
Nalen continues: “Air Products’ underlying strategy is to make sure that our product is available all the time. Telalert is just one side of the coin: we also have to make sure that we have proper delivery and storage plans in place, so we can forestall of any kind of supply problem. We strive to avoid any emergencies, and so we always ensure there is effective and sufficient storage capacity at our plants, as well as at our customers’ facilities.”
Air Products’ Bulk Gas division aims to provide complete peace of mind for its mining customers. “We ensure that our customers can depend on us at all times, not only for the best quality bulk gas, but also for optimum service and security of supply,” concludes Kulkarni.
Published on November 11, 2010 in Product News |