In the last couple of years, the regulatory bodies have been on a hunt which is only increasing their interest in the chemical industry. Every day, they push and start new law enforcement. Still, in the rapid business growth, the lack of agility in a chemical company can hinder its ability to become competitive in the market. It’s quite evident that the chemical industry is fickle and demands market players to progress and adjust to the constantly changing market conditions.
To achieve the business objectives, the chemical companies need to curate and deploy an advanced IT system and ERP system to evaluate the operational data and support essential business operations. With each day, the competition is constantly rising, the challenges are piling up, but it’s important that chemical companies transform these challenges into opportunities. So, to help you out, we are sharing more information about challenges faced by the chemical businesses!
Abrupt Variations In Prices
A decade ago, the energy costs started rising to the top, but in the recent few years, there has been an advent of cheaper energy options. Sure, it would be good news for energy companies, but it’s only benefiting when low prices are provided to every country. The same cycle is repeating for the chemical industry, but an ERP system can help forecast price changes and create better response strategies.
Increasing Count Of Recalls & Audits
The chemical companies are under the radar of regulatory agencies and government agencies, which means they have to maintain compliance with quality management and product information regulations. In addition, they are required to gather data from various business processes, so they are always ready for audits and recalls. For this purpose, the chemical companies need to deploy traceability data and need to be accessible for every stakeholder, such as customers and suppliers.
Challenging Data Management
Every stakeholder in a chemical company has different needs. To illustrate, the shareholders are concerned about revenue and profits, customers want lower prices, and regulators are only concerned about the environmental and security concerns. With efficient and proper data management, the chemical companies will be able to respond to the changing requirements of various stakeholders within the business chain.
Reducing Formulation Costs
When it comes down to producing chemicals, the raw materials are essential, and the availability of these materials depends on purchasing costs, seasonality, and constraints related to maintenance. In comparison, the chemical companies need to ensure that they are acquiring the right materials to comply with the specifications and higher formulation standards. The chemical companies need to deploy smart activities to get the correct resources and optimize the formulas with minimal costs – it’s important to meet the requirements of internal stakeholders and external stakeholders.
There have been various tech advancements that helped scale the chemical companies, such as R&D technologies. However, it’s easier said than done because chemical companies need to ensure the teams and business processes are gaining full value from these technologies. Secondly, these advanced technologies are expensive. To overcome these challenges, the chemical companies need to provide training to their teams and align the prices.
Secondly, tech advancements have happened, and chemical companies can utilize supercomputers to evaluate the material’s properties and chemical formulation. In addition, they can forecast the interaction of different formulas conducting physical sample testing. As a result, the chemical companies will be able to create improved chemicals with efficiency and effectiveness. However, these technologies need to be adopted properly to yield the benefits, which is extremely challenging.
Business Planning During Unstable Times
The majority of profits and revenues earned by the chemical company are through standard products. If the product is more established, it will be subjected to unpredictable demand given the constant de-stocking and stocking. However, business planning isn’t this simple, and the demand can be handled by implementing price and demand planning to manage this unpredictability in a progressive manner. Also, smart technologies can be used to make smart decisions.
To summarize, these are common challenges faced by the chemical companies right now, but these can be transformed into revenue-generating and business-growth opportunities. So, are you ready to orchestrate your commercial position by acknowledging these challenges?