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Consolidations within the distributor network have reduced the number of regional or specialty third-party distributors available to supply chain managers.
September 27, 2024
By: Gary Shawhan
President, The CHEMARK Consulting Group, A Global Specialty Chemical Consulting Company
Chemical distributors have always been an important component of the supply chain. Over time, however, the landscape of the distribution business evolved. In particular, consolidations within the distributor network over an extended period of time reduced the number of regional or specialty third-party distributors available to supply chain managers. For many corporations, the strategic value that resulted from this shift was a consolidation in their supplier base with the goal of reducing the overall costs associated with managing a much more complex supply chain. At the same time, it also reduced the number of regional and more specialized distributors. These distributors were frequently the ones that offered a high level of customer support and service, especially to medium to smaller-sized, local manufacturers. During and following the COVID period, the dynamics of the distributor relationships are shifting in certain ways and for a variety of reasons. These reasons include:
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