Understand the supply chain challenges of chemical manufacturer

The increasing globalization is opening up new markets for manufacturing enterprises in the chemical industry. US based chemical manufacturer is currently distributing products and chemicals to emerging markets. In fact, half of the $5 trillion global demand for chemicals comes from emerging markets.

However, new opportunities bring new and different challenges to the chemical industry, especially in its value chain.

1: Fluctuations in raw material and commodity prices

Chemical manufacturers are very vulnerable to sudden changes in the prices of raw materials, energy and other commodities. For example, the price fluctuation of crude oil or natural gas accounts for 50% of the production cost of chemical companies, which has a significant impact on their profits. It is difficult to track cost and price changes due to the large variety of chemicals in the inventory.

In order to cope with rising costs and maintain healthy profits, chemical enterprises need to have a comprehensive understanding of their supply chain. They need to understand the fluctuating prices of raw materials and commodities in order to integrate them into their resource planning systems. This enables them to adjust the supply chain, improve market efficiency and make better purchasing decisions.

2: Higher quality control risk

The chemical industry is a highly regulated industry. Governments and regulatory agencies have strict compliance requirements, such as the global system for the classification and labelling of chemicals (GHS), which aims to ensure the protection of the environment and human health in the process of chemical treatment, including use and transportation. Chemical manufacturers need to address and comply with these requirements in the procurement phase of the supply chain.

Moreover, with the rise of social media and stricter consumer protection programs, the risk of failing quality control and initiating product recalls has never been higher. Negative news and public supervision will significantly reduce the brand image, leading to the loss of goodwill and long-term negative impact. Chemical enterprises also need visibility in the whole production process to quickly identify unqualified batches and trace the root of the problem.

3: Managing large amounts of data

For chemical manufacturers, data management has become more and more difficult and complex. Information on the price and quality of raw materials and goods from suppliers, regulatory and compliance requirements from governments and regulatory agencies, agreements and contracts with customers and customers, and manufacturing and operational data - all of which generate a large amount of data that must be cataloged, processed, and used to generate business insight.

However, many chemical enterprises and manufacturers still lack the system and it infrastructure to obtain key information. For example, some chemical companies do not have complete information to accurately determine the end-to-end cost of each of their products, from procurement to delivery. As a result, they are unable to correctly judge which products contribute positively to profits and which products perform poorly or poorly.

Rescue of big data solutions

Big data solutions enable chemical manufacturers to overcome these challenges and develop advanced supply chain management methods. The integration capability of big data solutions allows chemical enterprises to integrate price and quality information from different sources into their own systems. This enables them to effectively track price fluctuations and quality changes in their suppliers' raw materials and commodities.

The data mining ability of big data solutions enables chemical enterprises to quickly identify problems and potential problems in the whole value chain, and quickly track their root causes. It also makes it easier for chemical companies to comply with regulatory requirements.