September 25, 2020
Kemin: Arising nimbler, shoulder to shoulder
During Singapore's lockdown in response to the COVID-19 pandemic, Kemin Animal Nutrition and Health, Asia Pacific, which is based in the city-state, experienced skyrocketing raw material prices.
The price of a particular raw material could shot up four hundredfolds, resulting in an end product that was four times in cost, recalls operations director Kelvin Wong during a virtual interview with Livestock & Feed Business.
When Singapore went into lockdown in April, it was a priority for Kemin to safeguard its employees' safety and health following the requirements of local authorities while ensuring its business continuity. Kemin's business continuity plan had evolved according to the local market situation and customer needs as lockdown restrictions gradually eased.
With regard to the need for local on-site customer support, Kemin has regional representatives based in several countries to offer their services, therefore reducing the need from its regional headquarters in Singapore to physically visit a customer's location.
90% of Kemin's employees involved in the supply chain had to work from home as a result of the lockdown. It was a situation that had never occurred before throughout Wong's career in the supply chain for over 20 years. Kemin had to rethink how to help employees adapt to the new working conditions, such as working remotely or at the company's campus in shifts or split teams.
Kemin's leadership team also implemented several initiatives to help maintain the employees' morale, for instance, offering cash incentives for staff who worked on-site and allowances for those who worked from home, as well as conducting virtual recreational activities to engage all employees.
In terms of sourcing for raw materials, Kemin was already well-diversified before the lockdown, enabling the company to be at a competitive advantage in supplying products to the market. Besides Asia, raw materials for Kemin's Singapore plant were also obtained from the United States and Europe, according to Wong.
Moreover, Kemin allocated additional investments of cash flow to ensure adequate inventories of raw materials and finished products at its Singapore plant to cater to increasing product demands.
"With the full support of employees who work closely to prioritise customers' orders based on customer sales forecasts and run rate as well as ensure inventories readiness, Kemin is able to respond promptly to the customers' demands while still ensuring consistent quality of its products and services. We are glad to say that we have fulfilled all our customers' orders despite a lockdown in Singapore and several other regions. This has strengthened the trust that our customers have in us," Wong highlights.
During the pandemic, it was a challenge for many suppliers within the industry to meet the demands of the market and several companies were unable to deliver on their customers' orders or have delayed orders for months. Wong says that Kemin puts in its best efforts to cater to every demand and minimise any possible delays of orders to its customers.
Kemin's toll manufacturers and logistics service providers also play pivotal roles in ensuring that the company met its delivery targets for the region. "We have strategic, win-win partnerships with our toll manufacturers and together, we place precedence on ensuring that our customers' needs are met," Wong emphasises.
Embracing the new normal and moving forward
In 2019, Kemin's global supply chain operations adopted a new organisational structure, where Wong oversees operation management for the Asia-Pacific region and China.
Wong and his team learnt the importance of further diversifying their sources of raw materials from various parts of the world and standardising product formulations and production processes. The key factor is about balancing investments to ensure an uninterrupted supply chain to cater to the customers' demands, Wong says.
The pandemic had highlighted the increasing importance of automation and digitalisation of supply chain operations.
Last July, Kemin was at the planning stage of its customer portal, where delivery status can be conveniently tracked. The portal would be first implemented in Europe and later offered in Asia Pacific after adapting the programme to meet business and resource requirements specific to the region. The first launch is expected in 2021.
Wong concludes that "in the light of a 'new norm', Kemin, whose supply chain can best demonstrate the agility and ability to react to huge demand fluctuations and support its customers, will be the eventual winner."