Why Is Chemical Inventory Management So Important?

With just a few exceptions, everything we do in business depends on chemicals. In fact, no matter what industry you’re in or what you’re selling, chemicals are likely essential to your operations.

Chemicals can be anything from fuels to pesticides, paints and solvents, cleaning chemicals and disinfectants — to name a few.

As such, good chemical inventory management is a must for any organization that wants to reduce risk and improve overall performance.

What is chemical inventory management?

Chemical inventory management refers to the process of organizing and tracking chemicals throughout their lifecycle. This includes procurement, storage, handling, use, cleanup, and disposal.

Benefits of chemical inventory management

Now that we have a definition of chemical inventory management, let's look at six of the biggest reasons chemical inventory management is so important.

Increase safety

Not every chemical is toxic or hazardous, but many are. Chemicals can pose a wide range of hazards, including fires, explosions, leaks, accidental releases, and adverse health effects. According to a report commissioned by the California Legislature, 50,000 workers die every year due to chemical exposures, and another 190,000 suffer illnesses including cancer, lung irritation, kidney damage, skin rashes and burns, heart disease, stroke, intellectual disability, and reproductive diseases.

Without 100% accurate knowledge of your chemical inventory, managing these risks is impossible. Effective chemical inventory management helps you identify potentially toxic or harmful substances in your facilities. This information is needed to prevent accidents and injuries, as well as identify safer alternatives to frequently used chemicals.

Save money

Good chemical inventory management practices can make a big difference to your business’ bottom line. If you have a tendency to lose track of your inventory, you probably also end up re-purchasing things you already have on hand. Keeping careful track of your chemical inventory is an easy way to prevent redundant purchases and cut unnecessary spending. Over time, inventory data can help you forecast demand for chemicals in order to make more informed purchasing decisions.

Storage is another area where companies can save a substantial amount of money. Storing excess chemical inventory that isn’t needed in the short term ties up cash and resources. And, because you’ve already spent money to purchase or produce it, any chemical inventory that is not used or sold is recorded as a loss. By avoiding these situations, good chemical inventory management will help your business save money and operate more efficiently.

Reduce waste & increase sustainability

Along the same lines, good inventory management can help minimize waste. Many chemicals are perishable, meaning that unused inventory can expire and become unusable or even unstable. When that happens, you’ll have to discard or in some cases pay to dispose of it — this is essentially money down the drain.

But excess chemical inventory isn’t just a waste of money. It also contributes to your company’s carbon footprint and resource usage. This will all have to be tracked, reported, and shared with stakeholders. By avoiding this waste in the first place, better inventory management can make a positive contribution to your sustainability efforts.

Avoid fines & ensure compliance

Not only is tracking your chemical inventory good for business, it’s also required by certain regulations. For example, OSHA’s Hazard Communication Standard (HAZCOM) requires employers to develop a list of all hazardous chemicals present in their workplace. Failure to meet this standard can result in a fine of up to $134,937 per violation. In addition, state and local agencies often have their own requirements regarding chemical inventories.

There are also numerous regulations governing the storage, labeling, transportation disposal of hazardous chemicals. Without an accurate chemical inventory, there’s no way to know if these guidelines are being met.

Poorly maintained inventories can result in costly fines, but these can be avoided. You may also find some other positives as well — including time savings on reporting for federal and state requirements like Tier II or voluntary initiatives like ISO 14001.

Hazard communication

Under OSHA’s Hazard Communication Standard, all employers with hazardous chemicals in their workplace must have labels and safety data sheets (SDS) for exposed workers, and train them to handle the chemicals appropriately.

Are your employees trained on the chemical hazards they might encounter? Do you have the correct labels and safety data sheets on hand? What about personal protective equipment (PPE)? Without a good system for managing your chemical inventory, it's impossible to know for sure.

Emergency response

In the event of an emergency, your chemical inventory will be crucial. A good chemical inventory will include information about which hazardous materials you have on hand, where they are located, and in what quantities. This information will help you plan your emergency response and ensure you have the correct spill control materials and equipment. And, should a fire or chemical spill occur, this information will need to be accessible to first responders and emergency personnel as they assist your facility.

The bottom line

Without good chemical inventory management, you’re exposing your business to unnecessary risk.

Investing the time and resources necessary to manage your chemical inventory will increase safety, save money, reduce waste and improve sustainability, improve hazard communication, speed up emergency response, and help your company avoid fines.

As such, chemical inventory management software is no longer a “nice-to-have”, but an essential tool for your business. Do you use a chemical inventory management system? If not, there’s no better time to get started — request a demo today!

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