Aaryan Rana (3)
I am an experienced digital marketing analyst with a passion for data-driven insights, optimizing campaigns, and driving business growth with 3years exp.
AT A GLANCE
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The chemical industry
has been at the forefront when it comes to dealing with disruptions as it serves
a diverse range of sectors and constitutes of different attributes (such as raw
materials, quality issues, geographical/ regional safety rules, financial
instabilities, so forth.).
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Currently, the impact
of Covid-19 on chemical industry can be seen across the globe- disrupted supply
chains, demand discrepancies, halted travel and fluctuation in petroleum prices
have compelled manufacturers to deal with various chemical industry issues all
at once.
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Digitization has
disrupted the chemical industry even before the pandemic started and the
combined effect has been both challenging and a blessing in disguise for the
chemical manufacturers.
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Through the right
tools and systems, the chemical companies can pave their path in the era of
digitization and transform for a better future.
The
challenges in chemical industry have been varying in nature as the industry
relies on a large variety of stakeholders and is an asset-intensive sector. The
past few years have been all the more challenging in chemical industry management because of the onset of
Industry 4.0 and ensuing changes in IT infrastructure. However, the
digitization effect also came as an opportunity for chemical manufacturing and
distribution companies to leverage latest technologies to reduce time to
market, optimize processes and manage supply chain challenges in the chemical
industry with enhanced efficiency.
According
to a 2020 survey by PwC, 42% of chemical company CEOs said they would be
investing in digital operations and related technologies in the coming 12
months.
To
remain on top of the digital game, companies must understand and approach
chemical industry issues fully equipped with advanced
technologies and comprehensive strategy. Let us have a look at some
of the significant challenges in the chemical industry:
1.Managing Data in the Time of Information Abundance:One of the significant challenges of
digitization in the chemical industry is an overflow of data in the sector. Top
floor decision-makers are looking for ways to store, analyze and generate
insights from the abundant information flow. Data analytics remains a tricky
area for many chemical manufacturers. Legacy systems are still part of many manufacturers’
IT infrastructure and there are discrepancies in information flow management
because different functions work in silos.
2.Overcoming the Unpredictable Nature of the Market:Market fluctuation is another major cause of
chemical industry disruption. The ever-changing commodity prices put
manufacturers in a sticky spot in terms of finances. Also, the impact of the
covid-19 pandemic was felt in the form of demand pattern changes – there has
been heavy demand globally for sanitization and hygiene products. Such
fluctuations are hard to forecast, and most chemical industry management
struggles to keep up with these changes.
3.The
Need to Go Agile:The world is moving
fast, and the manufacturing industry is looking to catch up. Chemical companies
are primarily looking for ways to go agile for better delivery patterns,
improved change management and measurable productivity. However, companies face
different challenges when going agile such as financial constraints, resource
skill management, and resistance from employees.
While the challenges are aplenty,
there are ways to overcome chemical company issues. Let us have a look at how
companies can manage the disruption in the chemical industry.
1.Investing in Fortifying IT Infrastructure:Chemical companies need to turn to technology
as-required but a long-term roadmap is required that justifies the investment.
By investing in high-end tools and systems, chemical manufacturers can ensure
that their processes are automated, the data is collated and leveraged to generate
insights for better business decisions, and the operations are optimized. Going
for comprehensive enterprise resource
planning (ERP) tools with embedded BI tools can transform how chemical companies approach their
operational requirement.
BASF, the global leader in
chemical manufacturing, made use of the Microsoft 365 to improve the
transparency and efficiency of virtual teamwork within our global family. This
choice was a direct result of the company’s move towards agility.
2.Supply Chain Optimization:Another area where chemical companies can turn a corner and
embrace the ongoing changes is to optimize their supply chain. Bettering
stakeholder communication, facilitating real-time inventory monitoring, and
avoiding stock-outs or bottlenecks by proper warehouse management are some of
the steps that manufacturers need to take for a well-functioning supply chain.
FIGURE 1:Areas getting
benefitted with ERP in chemical manufacturing
3.Prioritizing
Innovation:The highly disruptive
digital landscape will multiply the challenges in the chemical industry.
However, organizations can resolve these challenges by encouraging innovation.
Chemical companies should invest in better market research, newer and more
efficient production processes, and out-of-the-box customer response management
initiatives. These would enhance overall productivity and also help companies
in cementing their position in the volatile market.
In conclusion, disruptions are
excellent catalysts to improve processes within a chemical company. Businesses
can equip themselves with the latest technologies on a path to digitization.
Key Takeaways:
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Chemical companies
need to look at disruptions as opportunities to overcome challenging times.
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Latest technologies
play an imperative role in chemical manufacturing and aftermarket services as
well.
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