Chemical Industry Success Factors: 6 Steps to Success

Chemical assets are capital-intensive, and hazardous materials are always associated with inherent risks because of their nature

Fremont, CA: Especially after a decade of financial struggle and consolidation, chemical companies face fierce competition as they strive to drive sustainable innovation, growth, and profitability. With the highest forecasted growth rates in more than 20 years, the future looks bright, but there are still immense challenges ahead.

To advance beyond surviving to thrive, the forerunners in this industry are already implementing six strategies.

Fully prepare for rapid globalization and growth. Rapid growth in new regions and markets through mergers and acquisitions is a critical success factor for leading chemical companies. They are entering these markets with pre-configured, field-proven best practices and adaptive business processes that can be deployed and ramped up quickly.

Drive sustainable product innovation and integrity. Product lifecycles are becoming shorter due to global competition and a growing middle class in emerging countries. Industry leaders must, however, ensure that speed to market does not compromise product quality. 

Make the most out of existing assets. Chemical assets are capital-intensive, and hazardous materials are always associated with inherent risks because of their nature. Because of this, leading companies use Big Data to maximize the use of their assets without compromising performance or safety.

Excel at managing complex and volatile supply chains globally. Due to the shale gas revolution in the United States and the rapidly growing middle class in emerging countries, there are major global shifts in demand and supply. Chemical supply chains are becoming more volatile, uncertain, complex, and ambiguous (VUCA). The leaders are responding with fully integrated processes, from planning to execution, that provides end-to-end visibility and compliance. These processes also allow for real-time event response and leverage predictive models to overall mitigate short- and long-term risks of supply chain disruption.

Focus on greater profitability through customer-centric sales and service. Having poor customer segmentation and pipeline visibility, as well as inconsistent pricing policies, can lead to lost revenue and margin erosion. By increasing visibility into sales performance, pipeline, and price waterfall at an individual customer and product level, and regional and channel performance, leaders can proactively manage prices and margins.

Proactively manage knowledge and talent. A chemical company's CEO can certainly spend a lot of sleepless nights worrying about talent management. International expansion requires relocating workers or recruiting from local talent pools while being sensitive to cultural differences. Moreover, the aging workforce is rapidly becoming a major concern, as the loss of institutional knowledge and a shortage of workers on the factory floors threaten to undermine the companies' forward progress.