General / Sustainability

New Sustainable Chemistry Supply Chains – A Blue Swan Opportunity?

Steven Peleman
March 26, 2020
All topics

The King is dead. Long live the King…

No, I’m not talking about Elvis Presley! I am talking about how paradigms shift and new realities haphazardously also means intentional or accidental successes for those willing to receive the gift of serendipity. To bring it back to Elvis, “We will rock you” (Queen), “You can’t always get what you want” (the Rolling Stones), “The Model” (Kraftwerk) and “Born Slippy” (Underworld) were all B-side recordings that unexpectedly turned into hit singles.

I’m not sure where I got the idea, but over the past few weeks, I’ve reread Nassim Taleb’s ‘Black Swan’, I’ve been talking to dance choreographer and artist-in-residence Marc Bogaerts and to The Visible Authority founder Luk Smeyers in addition to my ‘normal’ work related skype calls. These open and sometimes more creative discussions have pointed me towards a new reality, it seems. Because of COVID-19 our A-side world has stopped playing, making the B-side world, the not so obvious, more audible.  Why not enjoy getting to know these new tunes…?

Allow me to give a few practical examples to illustrate this metaphore. The healthcare system seldomly gets a lot of attention and all of a sudden the entire system and its individual heroes are the saviors of entire nations. War zones in Jemen, Libya and Syria have been preoccupied with Corona leaving no time and energy to continue regular hostilities. Traditionally more conservative environments such as the educational or judicial systems have very rapidly switched to online continuity.

No how does this relate to your world of polymers and polymer supply…? I’ll tell you! COVID-19 can be described as a ‘Black Swan’ event impacting traditional supply chains from now on. We have seen how exposed we are to – in terms of geographical spread – very long supply chains. Also, we have seen how dependent we have become not just on natural resources from abroad, but also on foreign – mainly Chinese – manufacturing facilities leaving us short of critical supply in key areas. Not only that, our outsourcing frenzy of the past also on home turf has caused a shortage in workers to harvest crops in Germany. Because of this mismatch and timing, certain food prices are already rising.

It is my firm belief that the above also presents opportunities that would otherwise be considered economically sub-optimal. When talking about sustainability and sustainable chemistry – and this is even more so for circular economy examples -, this immediately implies equally sustainable and robust supply chains. Sustainability and circularity favor stability of an entire value chain. This in turn will favor a divide between certain hub & spoke, efficiency logistics chains and more local, circular supply and value chains.

If you wish to benefit from the opportunity that currently presents itself, please review your business in the following way:

  • How local can you make (part of) your feedstock or supply base
  • How local can you make (part of) your output markets
  • How well do you know your end customer base:
    • This is where value from differentiation is created
    • This is where your material will end up at the end-of-life
    • This is where you best organize – with partners – the start of your sorting & recycling
  • How does this map on your existing product or service portfolio
  • How does this map on your existing customer & supplier grid

It is crucial to understand and continuously explore alternative, more circular value chains for what you do. It will make your business more robust and at the same time i twill become easier to comply with the UNSDG’s and more and more stringent regulation such as Extended Producer Responsibility Schemes. I am well aware this is not just something to organize over lunch, but it is an essential ingredient of the future of doing business. By all means, do reach out to us if you wish to know more.


About the author

Steven Peleman
Managing Partner

Hello, I’m Steven Peleman and I’m helping chemical industry leaders and investors to create necessary, urgent, lucrative and sustainable options for the future. Over the past 30 years, I have been serving the industry in various positions in the value chain and in fact also in different roles: as engineering manager in polymer processing machine manufacturing at Husky, as EMEAI strategic marketing director at Huntsman Polyurethanes, as co-founder of the European Center for Open Innovation and as a venture innovation coach and entrepreneur. In addition to my executive and entrepreneurial endeavors, I was also director strategy & innovation for Deloitte’s chemicals, oil & gas business. Because of this multi-disciplinary and seemingly unique range of experience, I have had the honor and pleasure of regularly being asked to publish or present a fresh, alternative view on how to achieve transformations and disruption in industrial or societal ecosystems.