How Chemical Companies Can Achieve a New Level of Enterprise Performance
Rise to New Challenges
Simple cost-cutting measures are no longer enough for chemical businesses to boost their bottom line or attract more business. Customers demand more in terms of product performance, innovation, improved recyclability, and circularity – and they want these products quickly. In fact, according to Accenture research, the vast majority of executives (76%) agree that customers are looking for faster order fulfilment than ever before.
To diversify portfolios and quickly meet growing demands, mergers and acquisitions (M&As) are often the order of the day. At the same time, many chemical firms are looking to collaborate with new start-ups, and create innovative testing and incubation centers, and specialist pilot plans.
While all this activity can bring a swathe of opportunity, it can also add more complication. It accelerates the already disparate nature of the industry and puts inefficient processes in the spotlight.
Today’s chemical supply chains, for example, are complex beasts, with volatile prices of raw materials, the most efficient production and delivery routes, and stipulations from regulators changing on an almost daily basis.
Your chemical company’s success in this complex environment requires a whole new level of agility. Executives at chemical firms need to track trends, evaluate threats, and be prepared to apply structural adjustments at any point in time. In fact, according to Accenture, 85% of executives agree that the supply chain of the future will have to adjust in real time to best meet order requirements.
Effective strategy execution is key, and requires harmonization between your business, products, and innovation. Digitalization is integral to this and is a significant part of the reinvention of the industry known as Industry 4.0.
What’s reassuring is that most chemical business leaders recognize this. According to EY’s survey, the majority of respondents agree that no function will be unaffected by digital technologies. Industry decision makers expect that digitalization will affect their innovation and development (56%), customer interface (56%), processes and efficiency along the value chain (55%), logistics and distribution (62%), sales and order management (59%), and customer service (58%).
In fact, according to Accenture, digitalization could unlock up to $550 billion in value for the chemical industry, with digital innovation initiatives driving $70 billion of that value. Furthermore, by systematically combining digital technologies, chemical companies can drive efficiencies and realize average savings of approximately $90,000 in terms of cost per employee.
It’s Time for Your Business to Transform
According to BCG, 75% of chemical firms’ digital transformation efforts fall below expectations.
At the same time, recent PwC research has found that 33% of chemical CEOs are not very confident about their company’s prospects for revenue growth in the next 12 months. This is more than quadruple the share (8%) who responded similarly in the previous year’s survey.
These two statistics go together. Without the digital technologies in place to provide the insight you need to meet today’s operational challenges, you are on the back foot when it comes to growing your business and improving enterprise performance.
The success of your chemical organization hinges on making the right decision – every time. How can you optimize the budget you have? How can you make the best decisions about what programs, projects, and products your chemical firm will prioritize? And how can you come up with ideas for new products and validate them, so projects can be approved?
Make these decisions fast, and you will be able to adapt quickly to new needs, values, and market demands. You’ll be able to expedite innovation and get more sustainable products to market faster.
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