Chemical companies should invest in modern supply chain digital technology
According to a study by Accenture, 55% of chemical companies that invest in digitalization increase their profits by 5-20%, while about 25% increase their profits by more than 20%. The current industry trend has increased the demand of chemical enterprises for supply chain digitization
Commercialization: the increasing commercialization of chemicals has become a challenge for American chemical companies. Cheap raw materials and low transportation costs have led to the influx of essential chemicals from Asia (especially China) into most parts of the Western Hemisphere.
Risk reduction: the current global situation is unpredictable - events such as trade wars, port backlogs, and factory closures (due to pandemic response, hurricanes, or other unforeseen disasters). This should become a powerful driving force for chemical enterprises to reduce supply chain disruption by establishing flexibility and resilience in the supply chain.
Globalization and localization: Historically, supply chain digitization is to achieve a longer supply chain. However, as import tariffs increase and factory closures affect product supply, manufacturers find it increasingly attractive to produce, purchase and serve customers in local factories.
Customer expectation: another influence on the development of chemical manufacturing industry is "Amazon effect". "Consumers are used to tracking orders and deliveries and knowing the expected time of arrival. They want to be informed of delays and contingency plans. Consumers also hope that complaints and problems can be solved quickly. They value the early availability of all product data and information (or at least at the time of shipment). Many of these expectations have increasingly shifted to business.
Innovation or new product introduction: in order to meet the growing customer expectations, avoid commercialization, and better achieve localization, chemical companies are constantly trying to innovate. Product innovation usually introduces new raw materials and test products / processes into the plant, which may disrupt the normal operation of the plant. It also forces supply chain planning teams to try to strike the right balance between the cost of losing throughput and changing customer commitments and the new opportunities brought about by these innovations.
Old and cumbersome ERP systems and spreadsheets are not enough to keep up with these ongoing developments. In order to maintain competitiveness, chemical enterprises should invest in modern supply chain technology to create a collaborative, cloud based, data-driven, intelligent and delivery based supply chain ecosystem, so as to provide savings, value-added and tangible returns.