Purchasing departments in chemical companies face increasingly complex challenges in procuring raw materials. While it is important to ensure that the chemicals being bought meet quality norms and are priced competitively, it is also essential to meet all the applicable regulatory requirements.
However, government regulations are constantly changing and new laws and rules are introduced on a regular basis. Large companies have the resources and the manpower to track these new directives and modify their procurement practices in a suitable manner.
Small and medium-sized firms find it very difficult to keep up with every new rule that a local body or state agency may issue. In fact, chemical firms shoulder a great responsibility as far as compliance issues are concerned.
They have to first modify their own processes so that they remain compliant. In addition to this, they need to also take the responsibility for the raw materials they buy from their suppliers.
Many chemicals present special challenges
In the US, the Environmental Protection Agency (EPA) plays a key role in monitoring the activities of chemical manufacturers and firms involved in importing chemicals into the country. The recently introduced Frank R. Lautenberg Chemical Safety for the 21st Century Act has modernized the four-decade old Toxic Substances Control Act (TSCA).
The new law has introduced several far-reaching changes. For the first time, the EPA has been mandated to evaluate the safety of existing chemicals in commerce. The agency is also required to collect information to allow it to evaluate the risk that chemical facilities across the country pose to the environment and to the population.
How can a chemical consumer meet these new regulatory requirements in an efficient and cost-effective manner?
E-commerce platforms can help
A chemical company which uses traditional purchasing methods would need to vet each supplier individually. This process could be both time-consuming and difficult. If the raw materials are being sourced from overseas, the challenges could multiply further.
However, if chemicals are being purchased through an online platform, buyers would find that much of the due diligence exercise has already been completed for them. Before allowing a supplier to list its products on the marketplace, the platform administrators ensure that the seller meets certain norms.
A company that buys on the platform can also communicate directly with the supplier and request it to provide information regarding its adherence to regulatory requirements. Buyers can ask the platform’s administrators for help in ascertaining the details that they need.
Online platforms also help buyers lower their purchasing costs
B2B e-commerce platforms can deliver a range of benefits to chemical buyers. For many chemical consumers, the foremost reason for making purchases on an online platform is the possibility of lowering raw material costs.
Online marketplaces bring a great degree of transparency to the purchasing process. Chemical consumers can see a listing of several suppliers who can provide them with materials that meet their requirements. It is possible to communicate directly with a seller and request details that are not available on the platform.
The intense competition among sellers on the platform helps buyers to get the best prices. A survey conducted by Forrester Consulting found that 84% of B2B buyers said that they would buy from the same supplier provided the prices remained consistently low. The ability to view the prices offered by many different suppliers in real time gives chemical buyers a great advantage.
Buyers gain several benefits by routing their purchases through an online marketplace
Chemical buyers, especially those that do not buy in bulk, need all the help that they can get in complying with the complex set of regulations that are applicable to them. Online platforms make their task simpler by pre-approving suppliers before allowing them to list their products. An added benefit that buyers get is that they have the opportunity to lower costs by selecting from the wide range of suppliers who are listed on the platform.
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