Compound availability is worse than you suspect. Read on…
Two years ago, as COVID-19 was rapidly spreading around the world, in the MolPort logistics warehouse parcels were piling up as our clients’ labs were closing for lockdowns. Even though we started this year with the most intense COVID-19 wave yet, we felt a certain optimism for the year ahead as the end of this pandemic and its lockdowns seemed near. These past two years were full of uncertainty about compound availability, lead times, and facility closures on the client side. Everyone was looking forward to a more normal business rhythm.
Seven weeks ago, the February 24th Russian military invasion in Ukraine forever changed the lives of millions of people. It also completely changed compound availability for drug discovery. Instead of 8 million stock compounds, only about 800,000 were available.
MolPort’s goal is to aggregate the world’s chemical inventory, and to provide clarity about which compounds are available, and what is their lead time, price, and supplier reliability. We could take a very passive approach while doing this and rely on information from suppliers. When a supplier says that their lead time is five business days, this is often their aspirational goal and buyers experience many exceptions. When ordering single compounds, such an approach leads to frequent delayed or cancelled orders. When ordering compound libraries aggregated over many suppliers, nearly every order faces delays.
Our approach is different. On the MolPort platform (both online and offline via emails) we give compound availability that is guided by:
- Past order fulfillment statistics of a particular supplier
- Order or product type
- Information on current events (holidays, global logistics situation)
- Up-to-date information provided by the supplier on their current order processing capacity.
It is not uncommon that our estimate of order lead time differs markedly from what the supplier, or our competitors communicate. Our estimate is not an average lead time by supplier, but how many days is takes to fulfill 90% of their orders. And this time is usually longer. We have lost orders because the customer viewed our estimates as too pessimistic. And it does not bring us any joy when clients contact us later to say that the lead time we estimated was correct.
I must admit that now we can no longer give you reliable order fulfillment estimates.
The global logistics chain is a complex system. Complex systems have many hidden interactions between elements. The Butterfly Effect says that a wing flap by a butterfly may influence the formation of a hurricane on a different continent weeks later. Current global events are strong and not subtle. Everyone in the chemical compound logistics chain is trying to bring certainty. However, there are so many delayed orders! Oftentimes neither we nor the suppliers know when they will be delivered. What’s causing these uncertainties?
Here are the major contributors:
- Russian military invasion in Ukraine
- COVID-19 situation in China
- Logistics capacity issues in Europe
- Upcoming holidays (Easter, Labor Day, and others).
Each of these factors is complex and would take a blog post to describe. But that would be of little help to get your order to you quicker.
We estimate that compound availability will remain difficult to estimate for the foreseeable future. As some issues get solved, new issues appear. There is only one certainty: wars, pandemics, and global financial crises cannot be predicted. Take opportunities to order compounds. However, do not count on the lead time provided by the seller. It is better to err on the side of caution side when scheduling screening assays for compounds you order.
What MolPort is doing now to bring more certainty to you:
- We are in touch with all suppliers and get their assessment on the situation frequently, often daily.
- Update compound availability and lead times on our platform as soon as new information is available.
- Communicate the latest information to you on our website, in quotes, order tracking updates.
- We suggest splitting orders where appropriate to get available compounds now and the rest later.
- Monitor the order flow data stream to identify any new issues emerging and assessing how their impact can be lessened.
In our lifetime these are unprecedented business conditions. I hope that you value the transparent and trustworthy communication that MolPort has chosen, even if the news sometimes is bad. Let’s be patient with suppliers that experience temporary issues or are trying to resume operations under war conditions. What is to us an inconvenience or frustration about order uncertainty may be an existential struggle for them.
Kind regards,
Imants Zudans, Ph.D.
CEO
