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Challenges faced by the Chemical industry

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The chemical industry is regularly plagued by challenges and bottlenecks. These barriers can be sorted out by identifying what they are and moving along with it.

For instance, increase in the chemical product commoditisation, feedstock supply disruption which may lead to trading tensions, price volatility due to unpredictable prices, foreign exchange volatility and global economic slowdown may cause worries to the chemical industry decision makers. Let’s explore what are the challenges faced by the supply chain and manufacturing unit:

More quality audits and recalls

Every once in a while, chemical manufacturers would have to face regulatory compliance. Hence they should always maintain more strict quality management with precise product information. They should also be in a state where they can capture different data from various operational processes. This would prepare them well ahead of the audits. To make this happen, every chemical company should make sure that they integrate their traceability data across their business. They should also make it more accessible to different stakeholders like customers and supplier while handling quality audit process. Nobody wants to risk their business efforts over minor confronts like not filing a VAT return or adhering to the audit compliances. You need to be a step ahead of your business demands to safeguard yourself from business risks. With an ERP system, you can always get a clear picture of what procedures you need to follow.

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Organising operational and manufacturing data

Every stakeholder would have different demands and needs. Mostly shareholders would look for revenue and profit whereas customers would focus on cost affordability. Every regulator would also have to respond firmly to different environmental and safety issues. When they manage their manufacturing and operational data in an effective manner, they can ensure long-term success.

Reducing formula costs

Every chemical company is run by the raw materials and their availability. Be it managing purchase cost, seasonality or maintenance constraints, every chemical manufacturer must ensure that they are procuring the right materials by mindfully following the needed standards and specifications. Chemical companies should always work way too smarter if they want to be ahead of the curve with the right resource and formula optimization. This would be helpful while satisfying all the internal and external stakeholders.

Managing business portfolios

The chemical industry is constantly facing product diversification. There are acquisition and mergers happening every moment in the chemical industry. Hence keeping track of the changes is a must. The chemical producers should find way for new market entries. Globalization has also been a factor that we need to consider. Integrating emerging technologies into the market should also be taken care of. When you increase new products, there would be a need for frequent adjustments while you have to adapt to your existing products. All these challenges have led to further increase in the operational complexity.

Customer intimacy is increasing

Every business should look for challenges pertaining to bridging the gap between the customers and the industry. With tailor-made products and customer-specific service arrangements, the overall complexity has risen. This also demands more product differentiation.

How can SAP for chemical industries help businesses overcome these challenges? Contact iQuantM to know more.

 

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