Lessons from the pandemic in the lubricant industry

36

Pandemic in the lubricant industry
Ler em Português
Leer en español/castellano
Read in English

Pandemic in the lubricant industry

Pandemic in the Lubricant Industry – The COVID-19 Pandemic has severely disrupted the supply chains of the global base oils and lubricant industries, but it has also provided operational lessons that could be valuable in the coming years as companies learn to better prepare for the unexpected and worst-case scenarios.

Speaking June 30 during a panel discussion during the ICIS Asian Oils & Lubricants Online Conference, Charles Champion, director of Charles Champion Consultancy Pte. in Singapore, noted that the base oils and lubricants industries will move forward with the knowledge that supply chains can suddenly come to a standstill at any point in the chain, with zero inventories so far in many places.

“Business landscape planning, which should have been a core business principle, will now take on more importance based on lessons learned from COVID-19 and other disruptors,” said Champion, like hurricanes, “Frankenstorm,” who mix hurricanes with winter storms, the southwestern US winter vortex of the year, the blockade of the Suez Canal earlier this year, and fires and explosions at several oil and petrochemical plants.”

“Many organizations already put security and business continuity plans first, as these points are seen as a license to do business. In 2026, companies will be more serious about the pleasures of profit.”

Gabriela Wheeler, editor of base oils at Lubes’n’Greases, said companies can adopt different strategies for sourcing components and materials. “Companies will begin to look to be better prepared for emergencies and contingencies by analyzing and evaluating their supply chains,” Wheeler said.

“I think many of the problems that were caused by the pandemic showed industry participants that they cannot rely on components and materials that come from far away, not exclusively. They may have to look at regional supply from sources closer to home, to be able to continue managing the supply chain without too many interruptions.”

She said the pandemic has provided lessons on how to manage problems and how companies can make do with what they have, and that understanding can bring benefits. “For example, the pandemic resulted in a reduction in staff in different locations and factories, as well as offices, particularly in factories,” she noted. “This is something that hasn’t been seen in the industry before. I think we’ve learned some lessons from that, and hopefully, some changes in the future will allow for smoother operations without too many interruptions due to unforeseen events.”

Matthew Chong, the senior editor at ICIS, suggested that “in the coming months or years, we may see that companies have learned to be more efficient in planning and operating inventory because this pandemic has taught many of us to expect the unexpected”.

Shailendra Gokhale, the managing partner of Rosefield DAA International Consultancy LLP, based in India, also suggested that business management could evolve in the coming years to become more decentralized, with more local supply chains and increased supply from within a region. “Each region would like to build its local supply chains as far as possible,” said Gokhale.