Acquisition Function
Supply chain functions manage the acquisition of bulk atmospheric and process gases used in manufacturing and energy sectors. This industrial gas procurement involves the negotiation of long term contracts for substances like oxygen, nitrogen and argon. These gases are delivered either as a liquid in cryogenic tanks or through a dedicated pipeline from a nearby production plant.
Delivery Method
The delivery method chosen depends on the volume of gas needed and the distance from the air separation unit. For a smaller facility, industrial gas procurement might focus on cylinder delivery or small bulk tanks that are refilled by a truck. Large steel mills or chemical plants often have an onsite plant built and operated by the gas supplier to ensure a continuous and reliable flow.
Pricing Model
Contracts usually include a base price for the gas plus additional fees for the rental of storage equipment and the cost of delivery. The pricing model in industrial gas procurement often contains clauses that allow the supplier to adjust the rate based on changes in electricity costs, which are the main expense in gas production. Buyers must carefully monitor these indices to manage their monthly spending and predict future budget requirements.
