Skin ADV

eng
About   |   Newsletter
Demand & Supply Chain Management Evolution




23 Jan 2020
The biggest supply chain challenges chemical manufacturers face part one

INFOR
INFOR

To stay competitive in today’s chemical industry, manufacturers must sustain a high level of operational productivity. Moreover, current issues like rapid commoditization, complex supply chains, aging assets, and increased need for dynamic operations planning make it more demanding than ever before to achieve the level of productivity that drives differentiation and innovation. Manufacturers often become locked into patterns where they’re implementing shortsighted cost-cutting measures that can adversely affect operational productivity and decrease overall market responsiveness.

To ensure you don’t fall into these traps, it’s vital that you not only understand the industrial challenges you face, but also recognize the top trends that are reshaping manufacturing. Gaining this knowledge is the first step toward building a foundation of digital transformation.

This blog post is a helpful summary of the top challenges a supply chain faces today. If you’d like to learn more about how to turn these obstacles into opportunities, please read our recent executive brief for an even deeper dive into the topic.

Supply chain complexities

Chemical manufacturing production can run as continuous or a batch; various streams and chemical processes can merge, demerge, produce intermediate (bulk) material or finished goods, and be made-to-stock (MTS) or made-to-order (MTO) on different asset combinations with various starting points. These kinds of variables make planning, costing, formulation, and quality management complicated, as the supply chain must operate under the constant pressure of minimizing asset downtime and maximizing asset utilization.

On top of that, chemical companies often cannot foresee the full reach and scope of their products or molecules that are often only an intermediary step toward another final product—typically produced downstream. Additionally, the chemical manufacturing industry is under constant regulatory watch due to the nature of its materials and products and must balance those demands as it deals with unique supply chain pressures.

One result of such complications is poor productivity, which often goes undetected because the workforce is simply trying to keep working with outdated, generic, or poorly integrated software solutions. Today’s fast-paced technology landscape has changed the way business is done. In fact, Accenture states in a 2019 report: “As a result of all the technological disruption, the typical sequence of activities from sensing customer demand to fulfilling an order will soon look very different from today.” The very nature of many chemical industry challenges has changed—and will continue to change.

Supply-demand unpredictability

Supply chains are mercurial. Disruptions can occur anywhere in the supply ecosystem and cause ripple effects up and down the value chain.

For instance, the rapid commoditization of the chemical industry means that customers often have numerous sources from which they can procure needed materials. If you don’t have what customers need, in the right quantity, at the price, when they want it, they can go to one of your competitors.

And because chemical manufacturers (and their customers) are often so high up in the value-chain, they can be victims of the “bullwhip effect”—small changes that happen at the “tip of the tail” (end-market) translate into major changes by the time they reach the “grip handle” (producer).

All of this takes place amid interconnected global economic cycles that impact one another. In such a dynamic environment, it can be extremely difficult to provide accurate forecasts. So much so, that even confirmed purchase orders can be moved around, making it problematic for manufacturers to satisfy the most profitable demands at the best times.

In part two, we’ll take a look at hindrances to a smooth-running supply chain that are a bit more under a manufacturer’s control.









 
           Circular Economy     Industry 4.0     Blockchain 

     Internet of Things     Omni Channel 


Join us on


News & Trends
 

Last update 7 Feb 2020
Global Manufacturing PMI at nine-month high in January
   Source: J.P.Morgan Global Manufacturing PMI   -  IHS Markit



Chemicals & Pharmaceuticals

Maximum safety and reliability and reducing the costs for our customers at the same time: we are able to offer the chemical industry an extensive range of chemical logistics services that hardly any other logistics specialist can match. It is our goal to harmonise our services with your specifications in s...


Consumers crave trust and control in the Fourth Industrial Revolution

90% of consumers are using at least one ‘4th Industrial Revolution’ technology (4IR) including AI, internet of things, blockchain and drones. Consumers willing to share personal data if there’s a big...

   

Education
 
16
Mar
2020
Master Certified in Logistics, Transportation & Distribution - CLTD
     Lausanne
19
Mar
2020
Master CPIM - Certified in Production & Inventory Management
     Lausanne
23
Mar
2020
Master Green Belt in Lean CGBL 1st Level
     Lausanne
26
Mar
2020
Master Green Belt in Lean CGBL 1st Level
     Basel
30
Mar
2020
Master Certified in Logistics, Transportation & Distribution - CLTD
     Basel

Local & Regional Agenda
 


Resources
 
Erema: Gaining a competitive edge through preferential exports

Erema, an Austrian manufacturer of recycling systems, uses AEB software to accelerate the proper classification of its components, manage supplier’s declarations, and ensure compliance in its exports. Erema ship...

JDA Survey Finds Understanding Consumer Behavior Is the Missing Link in Manufacturers' and Retailers' Path to Omni-channel Success

In today’s highly competitive, omni-channel market, companies are realizing the path to success hinges on their ability to understand consumer behavior. Retailers and manufacturers can unlock significant competi...


International Agenda