Chemical manufacturer is using technology to move toward smarter operations
The four business models emerging in the chemical industry show that the chemical manufacturer is using technology to advance to intelligent operations and address current needs.
In the new decade, chemical manufacturers are in a dilemma: to stabilize their market position, they should not only transform into intelligent enterprises, but also ensure the output of their core business. In addition, the development trend of chemical industry has brought additional pressure to these enterprises. As a global senior director of chemical industry solutions, I see more and more challenges from the new competition in the chemical industry. A large number of commercialization and shorten the life cycle of products. Customers are taking advantage of a wider range of supplier areas and demanding greater product customization. The fluctuation of raw materials and energy prices, as well as the shift of supply and demand centers in the global market, make the enterprise executives' understanding of the market and real-time decision-making ability crucial. In addition, chemical manufacturers must be flexible in responding to changing regulatory requirements and expertise.
Visionary businesses have been able to address these challenges and overcome them by changing their perspective. Specifically, they don't see digital transformation as a box to solve the current trend. Instead, they found that it was a means to an end. Chemical manufacturers can focus on the areas of their business that need efficiency and modernization most, and transform rapidly in the way of intelligent enterprises.
SAP research reveals four business models in chemical industry. Let me outline the different strategies:
1. Deliver business results rather than products
One of the biggest changes in the chemical industry is the change of customer goals. To provide the answers that potential customers want, chemical manufacturers are collecting data on their products to quantify quality and performance. For example, coating manufacturers can use IOT sensors to determine the performance of products when processed in the customer's location, providing data on the best conditions for application and use. Similarly, resin manufacturers can remotely monitor product processing under various conditions to provide guidance to finished product manufacturers to help ensure overall product quality and reduce waste. These data can become an important part of the company's differentiation strategy to attract users and complete sales.
2. Use new technology to create error proof operation
Chemical manufacturers are also beginning to use technology to achieve operational excellence. They have found the advantage of automating standard back-end processes using technologies such as machine learning and the Internet of things. These technologies minimize the need for human intervention - and the possibility of human error. Blockchain technology also offers great potential to prevent the use of counterfeit chemicals, which is particularly important for chemical manufacturers that provide products to the pharmaceutical industry or agriculture. Blockchain can enable tracking and tracking process with less work and waste, while protecting the reputation of enterprises.
3. Compete as part of the ecosystem
Chemical manufacturer can no longer go their own way. They recognize that they have to work with customers, other businesses and organizations to conserve resources and protect the environment. As part of the circular economy, chemical companies may purchase raw materials from recyclers, which requires a solution to confirm their quality and availability. The circular economy alliance may call for reducing environmental threats such as marine plastics or hazardous chemicals to create opportunities for innovation.
Their customers may also be looking for ways to reduce waste and protect the ecosystem. For example, farmers may benefit from solutions that can immediately analyze soil quality, weather, and crops to determine the right product and the right time to apply fertilizers, crop protectants, or benefit from new seeds. With this data, they only use what they need, create less waste, and maximize output.
4. Keep agile in dynamic market
For some enterprises, it is urgent to be flexible in the uncertain M & A environment. Chemical manufacturer needs the ability to quickly divest assets, adjust their portfolios, and adjust their operations to cope with market changes. Technology can provide visibility into operations, delivery, and market conditions that executives need to make important decisions and stay agile.
