How Does food chemical supplier Work?

On June 18, , the FDA released for public comment its proposed method for ranking chemicals in the food supply to determine which chemicals the agency would prioritize for post-market assessment through the agency’s post-market chemical review program. The FDA encourages the public to comment in docket FDA--N- in response to the questions listed in Section 4 of the method description document. The last day to submit comments on the method is July 18, . This is one effort under FDA’s broader initiative to advance a robust, transparent post-market chemical review program to keep the American food supply safe.

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Key Points:

• The FDA ensures exposure to chemicals in food is safe. This includes chemicals authorized for use in and with foods during food packaging, processing, or other handling, or contaminants that enter the food supply through the growing or processing environment.
• Food manufacturers also have a major role in food chemical safety. The food industry has a responsibility to minimize or prevent hazards from contaminants and ensure the safety of chemicals they use.
• Our Office of Food Chemical Safety, Dietary Supplements & Innovation houses our programs for food chemical safety, dietary supplements, and foods made using innovative technologies. Under the Human Foods Program, we are leveraging our scientific expertise across these product areas and developing a more nimble and systematic approach to evaluating chemicals in the food supply.

Pre-Market Activities | Post-Market Activities | Evaluating Food Chemical Safety | Modern Methods and Tools | Enhanced Approach | Related FDA Programs | Announcements | Consumer Education

Chemicals are used in food during food production and in food packaging for useful purposes, such as preserving quality, adding nutritional value, extending shelf life, and protecting food from pathogens that can make people sick. These uses of chemicals in food or for food contact must be safe.

Other chemicals may enter the food supply through contamination. For example, environmental contaminants can be present in foods because they are in the soil, water or air where foods are grown, raised or processed. Process contaminants, such as undesired chemical byproducts, can form during food processing, especially when heating (cooking), drying or fermenting foods.

The FDA protects consumers from harmful exposure to chemicals that are in foods through a comprehensive, science-driven, and modernized approach. The work of the agency is coordinated by the Human Foods Program’s Office of Food Chemical Safety, Dietary Supplements & Innovation.

The FDA helps to safeguard the food supply through pre-market and post-market safety evaluations of chemicals as food ingredients and in substances that come into contact with food, such as through food packaging, storage or other handling to ensure these uses are safe. The FDA also ensures that industry is preventing when possible, and mitigating when prevention is not possible, unsafe exposure from chemical contaminants that can enter the food supply through the growing and processing environment. The agency monitors the food supply for chemical contaminants and takes action when we find that the level of a contaminant causes a food to be unsafe.

Food manufacturers are responsible for marketing safe foods. The food industry has a responsibility to ensure the safety of the foods they grow, make, and sell. For chemicals that are intentionally added to foods or food contact materials, they must ensure exposure to the chemical in the food or food contact substance is safe and that they have met all necessary requirements. Additionally, food manufacturers have a responsibility to implement current good manufacturing practices and preventive controls as needed to significantly minimize or prevent exposure to contaminants.

The FDA assists the food industry through our regulations, guidance documents, and regulatory programs. Our work to date has resulted in significant progress in reducing childhood exposure to contaminants from food, and the FDA’s Closer to Zero initiative builds on this progress. The agency also helps support innovation to meet demands for foods made using new technologies, ingredients and food packaging solutions without compromising our safety standards. We provide factual information about chemicals to help people make the best informed decisions about their food choices. These activities occur both before and after products enter the market. The FDA is enhancing our approach to complement our existing activities, subject to additional resources. This will help ensure that our oversight in this area keeps pace with innovation in support of our food safety mission.

Pre-Market Activities

Our pre-market programs are critical to helping prevent unsafe uses of chemicals and help ensure that innovative approaches in manufacturing food ingredients and packaging result in safe food products.

Food additives and color additives must be authorized for their use in food before they enter the market. To obtain a new authorization, a manufacturer is required to submit information to the FDA that demonstrates the food or color additive use meets the applicable safety standard. This submission includes an environmental assessment, unless exempt, for the FDA to review to ensure the use of the additive does not have a significant impact on the environment. The FDA has established several programs to help manufacturers demonstrate with reasonable certainty that a chemical is not harmful when used as proposed. These include: 

• Food additives and color additives: Food additives and color additives require pre-market review and approval by the FDA. Manufacturers are required to supply the FDA with evidence that establishes each chemical is safe at its intended level of use before it may be added to foods. In the case of food additives and color additives, manufacturers submit data and information to the FDA as a petition requesting approval of the ingredient for a specific intended use. The FDA evaluates the petition, and other existing data and information to determine if the data available demonstrate that the chemical is safe under the proposed conditions of use. If the FDA determines that the intended use of the additive is safe, the FDA publishes a regulation authorizing its use as a food additive or color additive. That authorization can be relied on by any manufacturer for that intended use.
• Food Contact Substances: Food contact substances are substances that come into contact with food, such as through food packaging, processing, storage or other handling. Companies who wish to use a food contact substance that is a food additive are required to ensure that the food contact substance is authorized by the FDA before marketing the product in the U.S. Information about a food contact substance is typically submitted to the FDA through a food contact notification. The FDA reviews information submitted in the food contact notification, and considers other relevant information available to the FDA, to ensure that the intended use is safe. This process includes analyzing testing data that demonstrates the amount of migration of a food contact substance to food because of its intended use, and toxicological data to ensure that the consumer exposure resulting from this migration is safe. If the FDA determines that the intended use of the substance is safe, the use is authorized under an effective food contact notification. Food contact notifications are specific to the company submitting the notification and to the specified intended use of the substance.
• Generally Recognized as Safe: The definition of a food additive in the Federal Food, Drug, and Cosmetic Act, which is the law governing food additives as amended by Congress in , excludes the uses of ingredients that are Generally Recognized as Safe (GRAS). This provision does not  explicitly grant the FDA the ability to require pre-market GRAS submissions. The FDA has established a voluntary GRAS notification program to help ensure that these ingredients are safe under their intended use and to help industry meet its responsibility for ensuring the GRAS status of substances they intend to use in food. For the use of a substance to be considered GRAS, all data necessary to establish safety must be publicly available and its safe use must be generally recognized by qualified experts. In addition, GRAS uses must meet the same safety standard as for food additives, a reasonable certainty of no harm under the conditions of its intended use and have the same quantity and quality of information that would support the safety of a food additive. The FDA manages and maintains a public inventory where all GRAS notices that have been filed by the agency, along with the supporting data, and the FDA’s final response letters to manufacturers are available. Manufacturers that choose not to go through the FDA’s GRAS Notification program are still responsible to produce safe products that comply with the law.

Post-Market Activities

The FDA is engaged in various post-market activities on an ongoing basis to help ensure exposure to chemicals used as food ingredients and substances that come into contact with food is safe. We also help limit exposure to contaminants that may be unsafe by monitoring the food supply for contaminants, contributing to research to enhance detection methods, and engaging with manufacturers on implementing controls to prevent and minimize contaminants in food before they are on the market. These include:

• Continued Evaluation of Safety Information for Authorized Substances: The FDA reviews new scientific information on the authorized uses of ingredients and food contact substances to ensure that these uses continue to be safe. The FDA reviews petitions or notifications submitted by industry and other stakeholders that necessitate the reassessment of a previously-authorized use. Additionally, FDA scientists proactively reassess a chemical when new information about its safety profile warrants reassessment. These FDA-initiated reassessments are typically conducted on a case-by-case basis and focus on substances that present the greatest public health concerns.

• Monitoring the Food Supply for Contaminants: The FDA reviews new scientific information and research on contaminants in foods that can enter the food supply through the growing and processing environment. The FDA monitors contaminant levels in foods, establishes regulations as needed, and provides guidance to food manufacturers on how to meet their legal obligation to implement current good manufacturing practices and preventive controls as needed to significantly minimize or prevent hazards from contaminants in foods and food contact materials (such as cookware and packaging). The FDA also partners with other U.S. and international regulatory agencies on monitoring and regulatory activities for contaminants. The FDA is partnering with the USDA to collaborate with growers to reduce levels of lead, cadmium, arsenic, and mercury across commodities used in foods intended for babies and young children through our Closer to Zero initiative. The FDA monitors the food supply by testing both domestic and imported foods through several different programs, including the FDA’s compliance programs for toxic elements and mycotoxins. In addition, the FDA’s Total Diet Study analyzes the food supply for both nutrients and contaminants and is an essential tool that helps the FDA prioritize food safety and nutrition efforts.

  The FDA has established tolerances, action levels, and guidance levels for some contaminants in food. A consolidated list of existing contaminant levels in food is available at Chemical Contaminants Transparency Tool.

• Enforcing Compliance with Pesticide Tolerances: Pesticides are used in agriculture to protect crops from insects, fungi, weeds and other pests. The U.S. Environmental Protection Agency (EPA) evaluates pesticides to ensure that they are safe for human health and the environment and establishes tolerances, which are the maximum residue level of a specific pesticide chemical that is permitted in or on a specific human or animal food in the U.S. The FDA is responsible for enforcing the EPA tolerances for domestic foods shipped in interstate commerce and foods offered for import into the U.S., except for meat, poultry, catfish (Siluriformes) and certain egg products that are regulated by the U.S. Department of Agriculture’s Food Safety and Inspection Service.
• Research and Method Development: The FDA conducts a variety of research to address chemical contaminants. For example, the FDA researches how process contaminants form and develops measurement methods that allow us to survey levels of process contaminants in foods and to identify actions to reduce or eliminate any potential harmful exposure. The FDA is also focused on improving testing and methods to better estimate exposure to contaminants and on identifying ways to prevent or minimize exposure as much as possible. For example, as part of our technical assistance to states, the FDA is contributing to research to understand how per- and polyfluoroalkyl substances (PFAS) are taken up by plants and how PFAS concentrations vary between plants and parts of a plant. This is an area of research that may help us make significant reductions in PFAS exposure from food.
• International Scientific Activities: The FDA through collaboration with international regulatory partnerships also limits the allowable amount of a chemical contaminant in specific foods when they are otherwise unavoidable. Through our partnerships with international organizations such as the Codex Alimentarius Commission and the Joint FAO/WHO Expert Committee on Food Additives, we develop science-based international food safety standards and guidelines.
• Oversight Activities to Address a Safety Concern: When we identify new data and information that indicates a chemical is unsafe, we take steps to protect public health, which can include revoking authorizations or approvals for certain uses, working with industry on voluntary market phase-out agreements and recalls, issuing alerts and informing consumers. We engage manufacturers on implementing controls for potential hazards from contaminants in food and on meeting their responsibilities under the provisions of the Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Human Food rule.

As science evolves, the agency’s active post-market monitoring of food chemical safety information informs our post-market assessments. To increase transparency of our post-market assessments, we maintain a public list of chemicals under FDA review with information about the steps in our risk review process. As part of our collection of food ingredient and packaging inventories, the FDA maintains a Post-market Determinations inventory that includes memos documenting the FDA’s determination that the use of an ingredient in the food supply that does not meet the criteria for the GRAS.

Evaluating Food Chemical Safety

The FDA evaluates the safety of chemicals in food (both intentionally added and contaminants) and chemicals that come into contact with food using the scientific and regulatory tools we have in place while continually evolving to incorporate new approaches. To do this, FDA scientists:

• Stay abreast of advances in food composition including added chemical substances, chemical contaminants, food consumption and the development of new chemicals for use in or with food and methods to evaluate chemical safety.
• Apply our existing authority flexibly and effectively to support rapidly evolving areas of technological innovation in food ingredients, packaging, cell culture and plant biotechnology, while maintaining our rigorous safety standard.
• Invest resources into building our capacity to collect, analyze and integrate scientific data to assess the safety of chemicals to meet our regulatory responsibilities.

We also identify chemicals for which the science suggests further research would be beneficial. We conduct toxicological studies when necessary to evaluate a specific issue, collaborate with scientific and public health stakeholders to further support studies, and research and request data, whether published or not, from the food industry.

Evaluating the Safety of Exposure to Chemicals Intentionally Added to Food

When the FDA evaluates if a substance can be safely used in food or come into contact with food we consider all the relevant information, including:

• Information on the identity of the substance, including its chemical structure and what is known about similar substances.
• The amount of the substance that we expect people may be exposed to based on how it will be used and its use level in food.
• Toxicology, safety data and other information to show that the substance is safe at the calculated exposure levels.

We rely on toxicological data to determine if chemicals may be harmful, what the potential health risks are and at what levels of exposure harm might occur. Industry is responsible for ensuring that sufficient data and information are available to ensure the safety of any substance used in food before it can be introduced into the marketplace. This information is critical for the FDA and industry to determine which uses of the chemicals are safe and in what amount. When we identify new data and information that indicates that the use of an authorized substance is no longer safe, we take action, which may include revoking authorizations for certain uses and informing consumers. More information can be found on Food Additives and GRAS Ingredients Information for Consumers.

Evaluating the Safety of Exposure to Contaminants

The FDA and our state partners regularly monitor the food supply for hundreds of chemical contaminants to help detect when levels in foods may pose a health risk. If a contaminant is detected, to estimate exposure and the potential health risk, we consider the level of the contaminant in the food, consumption estimates, vulnerable sub-populations who may be affected and the most current available toxicological information for that contaminant. If the agency finds that the level of a chemical contaminant in a food poses a potential health risk, we work with the manufacturer to resolve the issue and take action to prevent the product from entering, or remaining in, the U.S. market as well as informing consumers of the health risks. More information can be found on Chemical Contaminants & Pesticides.

Modern Methods and Tools

To keep pace with an evolving marketplace, the FDA must be equipped to meet both present and future challenges. These include reviewing an increasing number of submissions from industry and other stakeholders to assess the safety of chemicals added to food or that come into contact with food, which have increased in complexity.

We are identifying internal processes that we can build on and strengthen to prioritize our work on activities that have the greatest public health impact for contaminants and the use of chemicals as food ingredients and substances that come into contact with food. For example, adopting new methods and tools will enhance our ability to make science-based decisions and initiate risk reviews when supported by current science. An essential aspect of this work is that we have access to all available data about chemicals in the food supply, and the resources and tools to assess and integrate these data to sustain this high-priority program area.

Leveraging modern computational, analytical, toxicology and research methods and tools will further improve our oversight of chemicals in food. We are evaluating how to better incorporate modern methods and tools into our safety assessments to help us:

• Better identify and prioritize the potential risks of chemicals to ensure the U.S. food supply remains safe, nutritious and wholesome.
• Strengthen and update existing approaches and processes for evaluating and monitoring chemicals in the U.S. food supply.

Modern methods and tools that leverage new and evolving data sources better support pre-market safety evaluations, including reviews of innovative ingredients and food packaging solutions. Modern methods and tools can also help the FDA prioritize our post-market safety review efforts in a science-based, more systematic way that will focus on the chemicals that present the greatest public health concerns.

This approach will also allow the FDA to monitor the food supply for emerging health concerns from chemical exposures. This would enhance how we integrate and assess new science on the safety of chemicals in food and better inform our actions to reduce harmful exposure to chemicals in food.

We are using our existing resources to access and evaluate these modern methods and tools. We intend to validate and incorporate them into our safety assessments, as additional resources permit.

Enhanced Approach

The FDA is enhancing its approach to food chemical safety in three key areas with corresponding objectives that complement our existing food chemical safety monitoring programs. Additional resources will be necessary for the agency to pursue some of these objectives and will help ensure more steady progress toward our goals.

• Expand and Integrate Information Technology (IT) Tools: The FDA’s goal is to develop an integrated information systems approach to monitoring the food supply and food ingredients.

• Develop a new Expanded Decision Tree to prioritize chemicals and substances for evaluation: The FDA will finish development of its Expanded Decision Tree, which is a scientific tool that sorts chemicals into classes of toxic potential using a series of structure-based questions. The Expanded Decision Tree is a modernized version of the original Cramer Decision Tree tool and can be used to screen chemicals based on their structural features. The updated, expanded and greatly refined questions of the Expanded Decision Tree allow classification of chemicals with greater specificity than the Cramer Decision Tree. It will provide a consistent, systematic, and science-based tool to help evaluate the safety of chemicals based on their structure and predicted toxic potential.

  In March , the FDA submitted the Expanded Decision Tree to external peer-review as a step toward validating the tool. This peer review will collect input from the external scientific experts in line with the requirements of the Information Quality Act. Once the peer review is complete, the FDA plans to make the peer review report, and a white paper describing the Expanded Decision Tree, available to the public for additional feedback.

• Use New Approach Methods (NAMs) such as alternatives to animal toxicology testing: The FDA’s goal is to spur the adoption of reliable and new alternative methods for regulatory use that can replace, reduce and refine animal testing. This will also improve nonclinical testing to streamline the development of products the FDA regulates and bring them to consumers in the U.S. more rapidly and efficiently while ensuring they are safe. The FDA is working to develop a comprehensive strategy to evaluate the potential of new methodologies and technologies for regulatory use in food.

• Establish a framework to systematically review the post-market safety of chemicals in food: The FDA conducts post-market safety reviews of authorized uses of chemicals in food. The framework would be in addition to the safety reviews of submissions already in place and include a transparent process for identifying and prioritizing chemicals for safety reviews.

  On September 25, , the FDA hosted a public meeting on the Development of an Enhanced Systematic Process for the FDA’s Post-Market Assessment of Chemicals in Food. The purpose of this meeting was for the FDA to share information about the development of the FDA’s enhanced systematic process for post-market assessment of chemicals in food, including considerations for identifying and prioritizing food chemicals currently in the market for safety reviews. In addition, industry and consumer advocacy experts, government officials, research organizations, and other stakeholders had the opportunity to learn more, ask questions, and provide open public comment to address specific questions posed by the FDA. We invite those interested to provide information on topics related to the systematic process outlined in the discussion paper and welcome feedback on the following questions. Electronic comments must be submitted to the docket FDA--N- on or before December 6, .

• Explore how to obtain better information on the post-market use of authorized chemicals from industry and other stakeholders: The FDA generally must rely on post-market information that is submitted voluntarily, which means we often have incomplete information to conduct safety reassessments.
• Refine cumulative exposure procedures: The FDA will work with other experts, including other government agencies, to consider updating and enhancing its approach to assessment of cumulative exposures. This will include how the FDA considers co-occurrence and cumulative exposure of contaminants in food.

• Strengthen the FDA’s compliance activities that evaluate whether industry is meeting its responsibilities under the law and following FDA regulations governing chemicals in food: This includes the requirements for the safe use of chemicals as food ingredients, substances that come into contact with food, and substances that are Generally Recognized as Safe. Separately, the FDA will also reevaluate our oversight activities related to industry’s responsibility to prevent and mitigate contaminants.
• Enhance surveillance of the food supply: The FDA will expand its ongoing work to address contaminants in food by developing and updating analytical methods, enhancing contaminant-focused surveillance (including sampling), and sharing data and analysis from sampling efforts as appropriate to ensure transparency.
• Enhance detection of emerging chemical safety issues: The FDA will develop a framework for monitoring signals that relate to emerging issues concerning chemicals intentionally added to food as well as contaminants. The FDA will develop a prioritization system and improved capacity for risk assessment, communication and management.
• Develop a systematic approach to assess feasibility and achievability: For greater consistency and transparency in FDA guidance, regulations and enforcement actions related to chemical contaminants, the FDA has established a workgroup to develop a systematic approach to assess feasibility and achievability (for instance, manufacturers’ ability to achieve hypothetical maximum limits of contaminants) and incorporate the assessment into consideration of levels of contaminants in food while maintaining a safe and wholesome food supply.
• Update administrative processes through rulemaking: In March , the agency issued a final rule to amend our regulations on how and when the FDA may determine that a Food Contact Notification is no longer effective. These changes also enable the FDA to more effectively respond to new information on the safety and use of food contact substances. The FDA will continue to work toward publishing rules updating the administrative processes for the Food Additive Petition and Color Additive Petition programs for increased efficiencies.

Read about our FY priorities for food chemical safety: Human Food Program (HFP) FY Priority Deliverables.

As we continue to enhance our approach toward regulating chemicals in food or that come into contact with food, we will also seek additional scientific and other stakeholder perspectives on the activities, processes and tools in these key areas and improved transparency.

Related FDA Programs

• Dietary Supplements
• Food Ingredients & Packaging
• Chemical Contaminants & Pesticides
• Chemical Contaminants Transparency Tool
• Toxic Elements in Foods and Foodware
• FDA Total Diet Study
• Closer to Zero: Reducing Childhood Exposure to Contaminants from Foods
• PFAS
• Science & Research

• FDA to Revoke Authorization for the Use of Red No. 3 in Food and Ingested Drugs
• FDA Alerts Industry and Consumers about the Use of Amanita Muscaria or its Constituents in Food
• FDA Shares Testing Results for PFAS in Clams
• Update on FDA Releases Guidance on Voluntary Premarket Engagement for Foods Derived from Plants Produced Using Genome Editing
• FDA Issues Letter to Retailers and Distributors Concerning Lead in Certain Imported Cookware
• Update on FDA Announces Sufficient Capacity to Test for Mycotoxins Under FSMA Laboratory Accreditation for Analyses of Foods Program
• Comment Period Extended on Proposed Enhanced Systematic Process for FDA’s Post-Market Assessment of Chemicals in Food
• The FDA Issues Request for Information on PFAS in Seafood
• FDA Update on Phthalates in Food Packaging and Food Contact Applications
• Recording Available for Public Meeting on the Development of an Enhanced Systematic Process for FDA’s Post-Market Assessment of Chemicals in Food
• The FDA Updates Mycotoxins in Domestic and Imported Human Foods Compliance Program
• FDA Releases FY Pesticide Residue Monitoring Report
• Meeting Materials Added for the Public Meeting on Development of an Enhanced Systematic Process for FDA’s Post-Market Assessment of Chemicals in Food
• FDA Issues Warning Letter to Manufacturer of Apple Cinnamon Fruit Puree Products Containing Elevated Levels of Lead and Chromium
• Update on the Public Meeting on Development of an Enhanced Systematic Process for FDA’s Post-Market Assessment of Chemicals in Food
• FDA to Hold Public Meeting on the Development of an Enhanced Systematic Process for FDA’s Post-Market Assessment of Chemicals in Food
• FDA Revokes Regulation Allowing the Use of Brominated Vegetable Oil (BVO) in Food
• FDA Takes Additional Steps Following Investigation of Elevated Lead and Chromium Levels in Apple Cinnamon Puree Products
• FDA and Federal Partners Conclude Study on the Role of Seafood Consumption in Child Growth and Development
• FDA Announces Sufficient Capacity to Test for Mycotoxins Under FSMA Laboratory Accreditation for Analyses of Foods Program
• FDA Update on the Post-market Assessment of Tara Flour
• April Update on PFAS
• FDA Issues Final Rule to Revise Procedures and Update Reasons for Revoking the Authorizations for Food Contact Substances
• FDA Issues Import Alert for Food Products with Chemical Contaminants Including PFAS
• FDA Announces PFAS Used in Grease-Proofing Agents for Food Packaging No Longer Being Sold in the U.S.
• FDA Releases Guidance on Voluntary Premarket Engagement for Foods Derived from Plants Produced Using Genome Editing
• A Conversation with FDA on Steps the Agency is Taking to Address Unsafe Levels of Lead Found in Cinnamon
• FDA Update on Post-market Assessment of Chemicals in the Food Supply
• FDA, Industry Actions End Sales of PFAS Used in US Food Packaging
• FDA Withdraws Guidance for Industry on Enforcement Approach to Human Food with Chlorpyrifos Residues
• FDA Proposes to Ban Food Additive, Continues Assessments of Additional Chemicals
• FDA Works to Enhance the Assessment of Ingredients in Foods and Food Contact Substances on the Market
• FDA Update on Post-market Assessment of Certain Food Ingredients
• How FDA’s New Approach to Reviewing Chemicals Added to Food Will Strengthen Food Safety

Consumer Education

• Food Facts: Chemicals in Food 
• Consumer Update: Is Food Safe if it Has Chemicals?

Chemical and process manufacturers need to purchase chemicals to produce products for nearly every industry sector worldwide — from agriculture to automotive to pharmaceuticals and cannabis. Establishing a clear chemical procurement procedure can help your company stay compliant, streamline operations and better serve customers. But where do you start?

Contact us to discuss your requirements of food chemical supplier. Our experienced sales team can help you identify the options that best suit your needs.

In this post, we’ll cover what chemical companies need to know about the chemical purchasing and procurement procedure, including:

• What is chemical procurement?
• Benefits of ERP software for chemical purchasing
• Chemical procurement procedure for raw materials
• Chemical procurement procedure for MROs
• Chemical purchasing policy best practices

What is chemical procurement?

Chemical procurement is the process of acquiring items and/or ingredients for business purposes. This involves not only the act of hitting the “buy” button, but also includes the considerations leading up to that point and the tools used to complete the process. 

These procedures help you keep track of what chemicals you have on hand and follow proper safety measures. There are two types of chemical purchasing and chemical procurement procedures: raw material ingredients, and maintenance repair and operating supplies. We’ll cover both of them below.

Benefits of ERP software for chemical purchasing

Using enterprise resource planning (ERP) software is the best way to create a chemical purchasing policy that all staff members can easily follow. ERP systems are robust, integrated software suites that aggregate, automate, organize and streamline all the major aspects of your business operations. 

Choosing an ERP system for the chemical industry, such as Datacor ERP, gives you specialized functionality for chemical purchasing and procurement. There are a number of benefits to using this software, including:

• Enables informed decision-making and cross-departmental collaboration through integrated, up-to-the-minute data. 
• Reduces the potential for human error.
• Eliminates manual methods, saving time and effort.
• Automates common calculations and tasks, increasing accuracy and efficiency.
• Inventory, pricing and other key information is automatically updated across all departments and databases in real time.
• Keeps you compliant with health, safety and regulatory requirements at local, state, federal and international levels by automatically generating and sending key documents.
• Enhanced reporting and analysis tools for both compliance purposes and internal insights.
• Connects sales, marketing, warehouse, production and distribution departments for enhanced communication and operational efficiency.
• Helps you create and maintain a clear, documented chemical purchasing and procurement process that all staff can consistently follow.
• Allows you to reliably assess the risks of certain chemicals before purchasing.

Chemical procurement procedure for raw materials

Raw materials are all the items chemical companies are either reselling or using in production. This includes everything from the chemical ingredients used in manufacturing down to the shrink wrap, labels and pallets needed to ship finished products. 

While the individual process may vary by company, a chemical procurement procedure for raw materials should include the following steps:

Determine demand. Raw materials should be purchased based on the demand for the finished products in which they are being used. Your first step in purchasing and procurement is determining how many complete products or items you expect to sell for a given time period. 

For example, determine how much antifreeze and radiator coolant you expect to sell over the summer and winter. Specialized chemical purchasing and procurement software, such as Datacor ERP, offers demand planning and forecasting functionality that can help predict what products you’re likely to sell to which customers in the future. 

Calculate the ingredients needed to fulfill demand. Next, you’ll need to determine how much of a given raw material is needed in order to meet your forecasted demand. This is done by multiplying the number of raw materials it takes to produce one unit of finished product by the number of products you expect to sell.

In discrete manufacturing, this calculation is simple: Simply determine how many finished products you expect to sell, and then multiply the raw material by that number. If your finished product is a car, one of the raw materials you would need would be tires; so, you would simply multiply the number of cars you expect to sell by the number of tires needed for each car: four. You might even order excess inventory if you wanted to keep spares on hand.

In chemical and process manufacturing, however, the process can become more complicated, since the same ingredients can be used for multiple products, and most companies don’t want to keep excess inventory. 

If raw materials are only used in a few products: simply figure out how many of those products you expect to sell, and order ingredients based on that number. In our example, if antifreeze and radiator coolant are the only products that use ethylene glycol, you can determine the amount of ethylene glycol to purchase based solely on the forecasted demand for those products.

However, if the same ingredient goes into many different products, then purchasing must factor in forecasted demand for all of the finished products. If ethylene glycol is used not only for antifreeze and radiator coolant, but also for solvent and paint, then the amount you need to order will be based on the number of all of those products you expect to sell over the summer and winter.

That’s why chemical manufacturers and distributors need an ERP system with demand planning and forecasting and material requirements planning functionality, such as Datacor ERP. This software can perform all of these complex forecasts and calculations for you—ensuring accuracy, timely ordering and proper stock levels for optimized procurement and purchasing. 

Maintain just-in-time inventory. Chemical raw materials have a shelf life, and it’s often short; if the product goes bad, then you’ve lost the money. This is why most chemical companies try to maintain just-in-time inventory: having exactly enough raw materials to meet demand without storing any excess inventory. In this system, raw materials are ordered with just enough time to replenish stock before they run out.

Returning to our example, this would mean ordering just enough ethylene glycol to fulfill the projected antifreeze and radiator coolant orders for the summer, with supplies being replenished just in time to begin production for the winter orders.

Optimize shipping quantities. Transportation and logistics costs may represent a significant percentage of the landed cost of your materials. That’s why it’s important to optimize purchasing and procurement based on full truckload or shipload quantities: a partial load is often twice as expensive as a full one. 

The right ERP software will determine when to order what quantities of raw materials from which suppliers in order to build full truckloads and optimize just-in-time ordering. The system will then suggest orders to the supply chain or purchasing manager. Datacor ERP offers this capability through its demand planning and forecasting module.

Factor in other logistics. In addition to freight costs, you’ll need to consider the logistics of getting raw materials from the source—the supplier—to their final destination, the production facility or laboratory. This can impact not only the overall production cost, but the profitability of the finished product. A good ERP system will allow you to accurately track all of your logistics costs, which may include ocean freight, insurance, duties, tariffs and taxes.

Leverage your human resources. Your supply chain or procurement manager might know something the software doesn’t—for example, that there is a global pandemic happening, and delivery times are now 14 weeks instead of two weeks, or perhaps a hurricane is about to hit the Gulf and temporarily shut a plant down. 

A good manager stays abreast of everything that might affect the supply chain. Taking the ERP software’s purchasing recommendations and combining them with their on-the-ground knowledge of the industry and current events leads to more informed decision-making and smarter chemical purchasing. 

Place a PO. Once the manager determines what to purchase, they should always create a purchase order (PO) that documents everything they are procuring, including quantities and freight costs—then send an or a hard copy of the PO to the supplier(s). Since a PO is a legal document, this ensures that pricing and quantities are fixed and guaranteed if there is a problem with the order.

Datacor ERP and other specialized chemical purchasing and procurement software can easily create POs and automatically send them to the appropriate parties. 

Chemical purchasing procedure for MROs

Maintenance, repair and operating supplies (MROs) are the products used to keep your company running smoothly, from your warehouse to your production plant. These internal purchases include items such as safety glasses and propane for your forklift as well as office equipment, such as a desk chair or computer.

The procedure for procuring these items is much simpler:

Set up automatic ordering for inventory items. Items that are important to maintain daily operations can be set as inventory, so you’ll always have them in stock when you need them. Maybe you need a pump filter to keep the plant running, and these filters are expensive to order at the last minute. Even though you aren’t selling these items, you can set a minimum reorder point, just like just-in-time inventory for a raw material; for example, when inventory gets down to two filters, the system automatically triggers a PO to order 10 more. 

Create a PO requisition for non-inventory items. There are plenty of other materials that you’ll need to procure through one-time orders, such as a new desk chair. The right ERP system can help you create a PO requisition: the prerequisite to creating an actual purchase order.

PO requisitions are often general requests from staff who either don’t know what they need, or don’t have the authority to place the actual order. For example, maybe they know they need a desk chair with wheels, but don’t know the brand name; or perhaps they want to buy a fancy, brand-name chair, but they need approval for this big-ticket purchase. 

Using a specialized ERP system with PO requisition functionality, you can also set approvals based on the department or the dollar amount. Perhaps the standard, $30 office chair can be ordered directly by anyone in any department, but a $3,000 Steelcase chair needs to be approved by the CEO. 

The right ERP system will offer material requirements planning functionality that utilizes standardized workflows based on the parameters you set, automatically queuing up requisitions for manager approval and turning approved orders into POs. 

Chemical purchasing policy best practices

Before beginning the chemical purchasing and procurement process, ensure that you have a clear, documented policy in place that all staff members can easily follow. Your chemical purchasing policy should include the following steps:

• Create a list of common and approved chemicals that can be purchased by Supplier.
• Determine the process for approving and adding chemicals to the list.
• Identify the quantities that are allowed to be purchased.
• Create a receiving process that is linked with inventory management, so quantities are updated in real time (Datacor ERP and other specialized software can do this for you automatically). 
• Establish a review process for chemical purchase requests.
• Create standard request, order and approval forms.
• Document all processes and procedures and make them available to all staff who need access (these can be generated and stored within your ERP system).
• Assign roles and responsibilities and train staff.

Now you’re ready to start purchasing. Here are some best practices for chemical manufacturers and distributors to keep in mind in order to stay safe, compliant, organized, efficient and profitable: 

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• Make sure that all chemicals on the approved list meet safety and regulatory requirements, and have been reviewed against a risk assessment.
• Ensure all chemicals being purchased are on the approved chemical list.
• Purchase orders are reviewed and approved by the proper personnel.
• Staff are properly trained to determine essential versus non-essential and raw material/production versus MRO procurement requests.
• Staff are trained to properly assess and address chemical safety hazards.
• Ensure all chemicals include Safety Data Sheets (SDSs), and are handled and stored according to their requirements.
• Verify that the chemical supplier is knowledgeable about safety and hazards and can be consulted with questions.
• Keep ingredients properly labeled and stored with the corresponding SDSs.
• Have an accurate, reliable chemical inventory management system in place that is linked with purchasing and procurement (Datacor ERP provides this out of the box).
• Follow just-in-time ordering and eliminate excess stock for raw materials.
• Set minimum and maximum order points for inventory MROs.
• Ensure production, shipping, receiving and warehouse facilities follow safety and regulatory standards, including offering proper Personal Protective Equipment (PPE) and waste storage and disposal.