LONDON (ICIS)–Disruptions to the automotive
supply chain caused by the coronavirus have
highlighted the importance of managing risk, an
executive at major lubricants manufacturer Fuch
Petrolub said on Thursday.
The more global the supply chain becomes, the
more disruption a global disease can cause,
said Holger Karnetzky, vice president, supply
chain at the Germany-based manufacturer.
“China is one of the largest suppliers of
automotive parts in the world. The answer for
the global automotive industry lies in actively
managing risk with contingency planning,” said
Karnetzky.
“We track very narrowly what is going on …
Whenever we see a risk, we jump on it locally
to manage it … A lot of work has gone in recent
decades into managing risk.”
The other key area which demands industry
attention is the work to be done in explaining
what lubricants are doing for sustainability.
“We need to have a fact-based discussion. It is
our duty to find ways to explain in an easy and
understandable way, with examples, and
demonstrate the real value [that lubricants
bring],” the executive said.
“We need to show young people the contribution
from our side. [It is about] simplification.”
The feedback from lubricant customers is that
there is a strong demand to move to electric
vehicles (EVs).
Karnetzky said that “everyone is trying” to
speed up the transformation, adding that this
is likely to cause a decrease in overall
consumption of lubricants.
“But, on the other side, products are getting
much more complex. We are being a solution
partner, looking at the complete supply chain,
and we all have to work together. We are ready
because we have wide experience,” he said.
“The lubes industry is part of the solution. We
are at a critical point in time today, and we
must demonstrate we take sustainability
seriously. To get acceptance from society and
commit on common standards, we must be very
transparent.”
That would imply, for instance, talking about
the whole life of the product.
Other challenges facing the lubricant industry
are the volatility of demand down the supply
chain and variations in specifications.
“We must manage the volatility down the chain.
There are months with big increases in demand,
months with big drops,” he said.
Equally, there is a wide variety in which
products are allowed to be sold in different
countries.
“[Standards are] not aligned around the world.
So, we will see a trend towards the
regionalisation of products,” concluded
Karnetzky.
The 24th ICIS World Base Oils and Lubricants
Conference runs on 19-21 February in London.
