Customers are used to having a wide range of customised options when selecting the goods and services they use. There are many options available for anything from the mode of payment and distribution channels to colour, size, and number. The chemical businesses are moving in the same direction, as well. However, the intricacy of the global logistics chain is a significant problem for chemical firms.
The worldwide supply chain for chemicals has been steadily growing during the previous three decades. Supply chain globalization has created new market opportunities and more opportunities for partnerships and collaboration as a result of several factors, including e-commerce, the deregulation of trade deals, investment opportunities in transportation infrastructure, advanced techniques of global relations, and advancements in transportation technology, among others. However, this expansion has also resulted in more difficulties.
Chemical firms are now trying to improve their supply chain skills to address complexity while meeting consumer needs more successfully and efficiently. This entails doing much more than just attaining functional excellence in the conventional models—plan, source, make, deliver, and return—and adopting new data-driven and cloud-based capabilities that enable quicker, more adaptable, and personalized client experiences.
Chemical firms should spend now to get ready for the supply chain of the future because the industry is undergoing considerable upheaval. We have outlined the following three key areas of innovation for chemical businesses:
Companies may be better able to respond to a dynamic, complicated environment by strengthening their competencies in five key areas. Let’s look more closely at each of these topics.
What are the Key Areas?
A Living Division
By employing living categorization to customize essential supply chain capabilities, chemical businesses may better serve their consumers and meet their expectations. This entails establishing a closer connection with each customer’s particular needs and adjusting the supply chain’s capabilities to meet those needs. By using this method, the following important question can be answered: Does front-end living segmentation permeate sales and operations planning to guarantee that the supply chain satisfies client expectations?
The necessary chemical inputs will increase in sophistication and differentiation along with the final products. The chemical supply chain can be made more “batch size of 1” production-friendly by using living segmentation. One base product, for instance, from a large coatings company may grow to include hundreds of SKUs for its clients based on characteristics like colour, viscosity, and finish. According to Ram Charan Co Pvt Ltd, Coatings businesses can better align their offerings to the various market segments with which they interact—such as automotive, aerospace, marine, transportation infrastructure, interior and exterior building applications, etc.—by creating micro-segments through living segmentation and adding more value.
Additionally, chemical businesses will need to support service-oriented operating models that address the unique objectives of their clients (i.e., availability vs. flexibility vs. cost).
Network With Few Assets
Building an ecosystem of partners for your supply chain—outside of the typical co-manufacturing, co-packing, and third-party or last-mile logistics providers—that can contribute new capabilities and value is the goal of an asset-light network. Technology partners that help chemical businesses be more creative and adaptable should also be part of it.
Numerous cutting-edge information technologies can give chemical businesses more adaptability so they can respond more swiftly to shifting client wants and bring efficiencies that increase market responsiveness and cut expenses. The World Economic Forum claims that corporations may now make and reverse investment decisions far more freely because of the mobility of entire operations and technological platforms.
For instance, a huge number of different cloud technologies are fundamental for increasing an organization’s ability to embrace new business models and develop brand-new goods, services, and customer experiences. Co-manufacturers and co-packers can have regulated access to shared data in the cloud, which greatly enhances a company’s flexibility and capacity to engage third parties.
Application of Data and Intelligence
Complex global supply chains can be made more swift, agile, and efficient with the use of comprehensive visibility and appropriate insights. Insights and visibility are both based on data.
The key to consistently providing excellent customer service is to gather the appropriate data and use it strategically to gain important intelligence. The industry generates a ton of data, which is excellent news. The key to using this data effectively is how it is applied, which is where cutting-edge technologies like artificial intelligence (AI) come into play.
In the chemical businesses, Ram Charan Co Pvt Ltd evaluated jobs across 30 typical job categories and discovered that in addition to operational duties (such as production or sales), administrative, managerial, and scientific work will also be impacted. According to the same report, AI will eventually cut human effort in these jobs by up to 45%. New opportunities in supply chains are being created by technologies including IoT, additive manufacturing, industrial robots, big data, AI, and simulation modelling. Companies can generate customized views of order status that can be shared with customers using AI-driven smart data to obtain detailed visibility into the supply chain, support planning, and enable real-time decision-making.
Lastly
Chemical businesses must reconsider their supply chains to pursue various strategies, including living segmentation, asset-light networking, data, and applied intelligence. They must pose challenging queries: How should our supply chain be reorganized? How can we use data more effectively within our company to foster innovation and quicken decision-making? What new functions can our partners perform to promote increased supply chain efficiency and agility?
