2017 is the longest year on record and the best year in a decade for the global chemicals organization. Oil demand remains strong, but price volatility is lower than in the past. Due to the development of shale technology, natural gas can meet the global power demand and chemical production at any time. Chemical companies digital supply chain, read more-
New regulations and new mobile trends are expected to affect demand for refined products. Record M & A activity continues to reshape the competitive landscape. In the rest of this decade, the chemical industry is expected to reach the peak of an upward cycle and approach a potential peak in the next decade
Despite the favourable conditions, much depends on whether the organization is ready to take a foothold in the digital age.
In order to make the current development sustainable and profitable at the speed determined by the market, it is essential for chemical companies to understand the global forces driving change, including technological progress, raw material inventory and product supply, demand volatility and sustainability factors.
Then, these companies must take action to quickly adapt and improve the customer and employee experience by investing in operational flexibility and flexibility. They must also strive to manage costs by improving asset reliability and optimizing the supply chain.
Both external and internal factors are exerting pressure on chemical companies to build demand driven supply chain. From an external point of view, strengthening the review of recall and return requires the traceability of products from procurement to manufacturing to finished products.
It must be able to quickly address price fluctuations caused by changes in energy markets (e.g. raw materials) and consumer markets (e.g. construction, automobiles, packaging and agriculture).
As competition intensifies and differentiation decreases, innovation and the ability to quickly enter the market and transform from a supplier to a solution provider become critical.
Supply chains also need to manage supply and demand disruptions caused by different suppliers, regulations, geopolitical factors and cost pressures.
From the internal point of view, the change of demand is the direct result of the change of consumer industry (such as B2B), which needs different participation models to reduce the impact on the supply chain.
The supply chain also needs to address operational challenges caused by raw material quality and availability, scheduling and plant maintenance constraints, R & D schedules, and lack of integration between sales and marketing, R & D and production. In addition, the lack of supply chain visibility (including in transit inventory) often leads to unsatisfactory optimization.
With the maturity of new markets and the increasing popularity of new material formulations, organizations in the chemical industry find that they need flexible supply chain technology to meet the growing performance standards.
At the very least, this means deploying predictive supply chain analysis systems and dynamic pricing systems. Next generation supply chain solutions may require automatic optimization and decision-making capabilities.
There is a gap in the effectiveness of the most important supply chain demand of chemical companies, which aggravates these demands. For example, two-thirds of the 460 chemical respondents in our survey said that it was crucial to increase the use of analysis in terms of supply chain data and costs.
However, only half of them tell us that their supply chain functions are effective in this respect. Chemical companies believe that there is a huge gap between the importance of advancing priorities, such as managing transportation disruption, managing material quality and risk, improving demand forecasting, integrating financial, sales and operational plans, and their current proficiency in implementing these priorities.
Among the ten requirements, the average efficiency gap is 11%.
Digital future of chemical supply chain
Successful chemical companies need to adopt advanced supply chain technology to transform from linear mode to digital future. Although current linear models have discrete, sequential, and event driven processes, the digital future can provide end-to-end, orchestrated, and insight driven processes.
Digital supply chain can dynamically predict demand patterns, improve visibility and utilize asset availability at the same time. It includes three functions: integration planning, value chain visibility and smart assets.
Chemical companies digital supply chain | Tech Review
-Integrated planning makes the operational and financial performance objectives consistent, and can quickly make decisions based on forecast differences, order changes, market intelligence, etc. It can optimize production planning, reduce installation disruption due to product or formula changes, and help reduce and hedge commodity spending on a large base of inputs.
-The visibility of the value chain helps to control the highly standardized products from entry to customer receiving.
It can identify risks and respond to evolving global supply events. It also helps to organize information from key supply chain nodes for reporting, real-time decision-making, and collaborative exception handling.
See Also- Challenges facing Indian chemical manufacturer
-Smart assets use the Internet of things (IOT) and cognitive insight to help improve the reliability and performance of equipment and assets through better visibility, predictability and operation.
They can improve the quality and output of design to production operations by supporting, and improve the efficiency of resource consumption (such as workers, labor or energy), while reducing costs.
