"Disaster-proofing" Dow Chemical's Supply Chain
Dow Chemical has a long history of applying science to solve thorny problems. In 1995, Dow undertook a 10-year program aimed at improving its safety and environmental performance, resulting in significant progress across a variety of metrics. Two years ago, the company renewed the drive, setting 2005 as the baseline and establishing another 10-year set of targets and goals centered on sustainability. As part of the new initiatives, Dow undertook to reduce what it calls its "footprint" for the shipment of highly hazardous chemicals; an essential component of reducing this footprint is improving the company's ability to respond to any incidents involving these chemicals. "Our incident rate is very, very, very low," says Mathes, "but we want to drive it to absolute zero."
Dow's challenge is formidable. The company is the largest bulk chemical shipper in North America by truck and by rail, and its fleet of 26,000 railcars is the second largest in the world. As global supply chain director of logistics operations at Dow, Mathes oversees the company's complex worldwide logistics network, which handles shipments of more than 100 billion units of product annually from sites in 200 countries to 45,000 customer locations. Overall, Dow has been ranked as the seventh largest U.S. exporter and 64th largest U.S. importer. Lots of product in motion, lots of exposure to potential disruptions.
Dow's strategy for supply chain sustainability includes four elements: shipping container design, supply chain visibility, greater collaboration with private and public sector partners, and supply chain redesign. With regard to the first, Dow has traditionally adhered to high standards for packaging its goods, essentially "over-packaging" materials to exceed government standards, but the company also has come together with other shippers, transportation service providers and government agencies to develop new container designs that are safer and more secure. Dow is conducting a number of active projects targeting incremental upgrades to container design, and it has partnered in a major project with Union Pacific Railroad and Union Tank Car Company to develop a "next-generation" railcar that could incorporate various new concepts and technologies, such as head and side impact limiters, electronically controlled pneumatic brakes, crumple zones and impact-resistant coatings.
The company's supply chain visibility initiatives involve applying a mix of track-and-trace technologies — including radio frequency identification (RFID) and GPS, in combination with good old fashioned bar codes — to heighten security and improve overall supply chain efficiency. Packaging for products retains the traditional bar code, while shipping containers may be tagged with RFID devices, and transport vehicles are outfitted with GPS technology, all of which allows for tracking goods throughout their movement in the supply chain. Dow takes a multi-mode approach to shipping, and the company has tracking initiatives running in all its transportation modes.