Energy Market Supply Chain Insight

Feb 15, 2023

Article Provided by: Rick Limon

Supply chain disruption is a phrase that we have come to know recently, and it has had impact in literally every Thumbnail-Images-24.png​area of our lives. From eggs to toilet paper the model of "just in time" inventory has taken some major hits in recent years.

Hurricanes happen, countries have wars and sometimes, even ships get stuck sideways in shipping canals.

The petroleum industry has certainly been impacted in recent years. One of the main areas we have seen disruption is in oils and grease. It is important to note that the petroleum industry never fully recovered from the impacts of covid, multiple hurricanes in the gulf since 2020 and a devastating plant fire.

Other issues that have stressed the industry are the war in the Ukraine and its impact on lubricant additives, the current labor issues and even a shortage of the actual grease cartridges because of labor problems. Even the recent increase in electric vehicles has had an impact. Lithium used to make the batteries for electric vehicles is the same lithium used as a base for many popular lines of grease.

Unfortunately, prices increased through all of this disruption. 

A positive or all of these events impacting the industry, is that Cenex Lubricants has worked hard and planned ahead to ensure their available inventory to us has remained at a 6 month or less rotation. This aligns perfectly with MKC’s lubricants inventory. The importance of having relationships with the best in the business can not be overstated. 

As much as the model of "just in time" inventory has taken some hard hits, the model still works. As is the case with any disruptions, the industry has made changes and improvements to get back closer to normal.

Though it is not perfect, things are getting better. Production plants have expanded their capabilities, additive providers have been able to increase availability from other sources and the bases used in greases have moved away from using lithium to using other reliable bases.

The changes to what we used to know as “Normal” are not all bad. It has forced the industry to get better at what it does and how it does it. Fortunately, MKC’s desire to always get better and be better is the NORMAL.

We will continue to work with our key partners to achieve SHARED GROWTH AND SHARED SUCCESS!