Trouble in Paradise for Chemical Manufacturers? 4 Key Challenges in The Industry
In today’s rapid business scenario, a company’s lack of agility will significantly affect their ability to be competitive. The chemical industry being highly volatile, requires the players in this sector to evolve and adapt themselves to the changing market conditions constantly. To help them achieve this, chemical manufacturers must have a reliable IT infrastructure and […]
In today’s rapid business scenario, a company’s lack of agility will significantly affect their ability to be competitive. The chemical industry being highly volatile, requires the players in this sector to evolve and adapt themselves to the changing market conditions constantly. To help them achieve this, chemical manufacturers must have a reliable IT infrastructure and ERP system that can analyze operational data, support critical business functions, and ensure improved organizational transparency. With the rising competition on one side and mounting challenges on the other, the only option left with the chemical manufacturers to survive in the market is to covert these challenges into opportunities. Let us have a look at the key challenges that are faced by chemical manufacturers:
Unanticipated variations in commodity prices
Going by the trend a decade ago, the energy costs appeared to be on an upward climb, but the recent years have witnessed the emergence of cheaper forms of energy. This would have been a sigh of relief for energy manufacturers if only the benefits of lower energy prices were distributed evenly on a country-by-country basis. Therefore, chemical companies are required to have a robust ERP system that will help them respond to fluctuations in energy prices quickly.
Increased number of recalls and quality audits
Chemical manufacturers are exposed to a variety of government and other regulatory compliance. Therefore, it is essential for them to maintain strict quality management and detailed product information. Chemical manufacturers are also required to capture data from operational processes accurately so that in case of any recalls they can be prepared for it. To equip themselves for quality audit, the chemical companies must integrate traceability data across the business and should be made accessible to various stakeholders such as supplier and customers during the quality audit process.
Managing manufacturing and operational data
The needs and demands of different stakeholders to chemical companies may be different. E.g., while shareholders look for profit and revenue, customers want more for lesser money, and the regulators respond to safety and environmental concerns. By managing their operational and manufacturing data efficiently, chemical manufacturers can ensure success in responding to the requirement of various stakeholders in their value-chain.
Cutting down formula costs to create new efficiencies
The availability of raw materials to chemical companies are affected by factors such as the seasonality, cost of purchase, and maintenance constraints, etc. But at the same time, chemical manufacturers have to ensure that they procure the right materials with the required specifications to comply with the standards of the formulations. Chemical companies must work smarter to achieve the right resource mix and formula optimization at the minimum cost so that they can satisfy both their internal and external stakeholders.