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November 04, 2016 02:00 AM

New computer system causes delivery problems for Sabic

Frank Esposito
Senior Staff Reporter
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    A new computer system is causing delivery delays for some plastic resins made by Saudi Basic Industries Corp.

    Several North American plastics processors and other market sources have reported the delays. Many of the concerns were around delayed deliveries of Sabic's Lexan-brand polycarbonate.

    In a Nov. 3 email to Plastics News, Sabic spokesperson Susan LeBourdais said the firm in 2015 began working with customers, suppliers, and business partners to prepare for the new global enterprise resource planning (ERP) system. The new system is designed to further automate and simplify Sabic's business processes, she explained.

    Full implementation of the new system began in October.

    “All of Sabic's global manufacturing plants are operating and producing products, and we are shipping products to our customers,” LeBourdais said. “However, this is a highly complex migration, and we are currently experiencing some challenges that are not uncommon when implementing a new ERP platform.

    “We are working diligently with specialists and doing our utmost to resolve issues as quickly as possible,” she added. “As always, the needs of our customers, suppliers, and business partners remain a critical focus, and we are doing all we can to minimize any supply interruptions and restore order fulfillment to normal service levels.”

    In the meantime, processors are scrambling to find replacement materials. Outside of Sabic, Covestro is the only materials firm that produces PC resin in North America. Sabic is based in Riyadh, Saudi Arabia, with North American headquarters in Houston.

    The ERP system covers materials made by the former GE Plastics business, which Sabic acquired in 2007. In addition to PC, the new system affects deliveries of ABS, Ultem-brand polyetherimide, Noryl-brand PPO/PPE and other specialty resins and alloys.

    “Sabic's plants are running, but there are massive scheduling problems,” one market source told Plastics News. “Processors can't tell when their material will be produced or get delivered or if it will match what they've ordered.”

    Automotive suppliers especially could be affected, since only Sabic materials are approved for some applications. “Molders in automotive are rushing to qualify other materials,” the source said, adding that the situation is creating opportunities for Covestro and for PC imported from outside of North America.

    An automotive-focused injection molder in Ohio first was asked by Sabic to take a full month's materials order in advance, and now is receiving a jumble of various orders, an executive with the firm said.

    “We weren't getting any material, then we got a back order all at once without warning,” he said. “Or now we'll get the right material, but not in the order we were expecting.”

    The automotive firms that the molder works with now are trying to find replacement materials from different suppliers.

    “It's been very frustrating,” the executive said. “It's had a big impact on our business.”

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