Rising costs, in particular electricity and transport, are exerting pressure on the gas industry, forcing companies to rethink their supply chain strategies.
This is the view of Seelan Gounden, General Manager Supply Chain at Air Products South Africa.
He said, “Environmental pressures, such as tariff increases, have forced us from time to time to change the goal, so, for example, an efficient supply chain may have to make way for business effectiveness.”
“When product has to be pooled from production sources that are geographically widely spread throughout the supply chain, transport costs increase.”
“It is a matter of having an understanding that supply chain efficiencies may need to be prioritised on occasion, in order to realise a larger goal, that of business effectiveness, or, put simply, saving money.”
says Seelan Gounden, General Manager Supply Chain at Air Products South Africa.
This is the approach that Air Products has had to take in the winter months, to cope with increased winter power tariffs.
According to Gounden, Air Products South Africa has increasingly been looking for creative solutions within its production and supply chain in order to meet the challenge of proposed hikes in power tariffs.
Such solutions range from using buffer product which has been stored in summer, to switching off equipment, such as compressors, when possible, to minimising operation plant usage.
“It necessitates a re-configuration of plant usage, as well as that of auxiliary equipment such as cooling fans in the winter months,” Gounden says.
He stresses, however, that managing power usage is also closely aligned with managing demand in a fluctuating market.