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Chemical Technology • March 2015
26
Profitability through supply chain
excellence −
A ‘Technology Insight’
for specialty chemicals
producers
Supply chain excellence through
software
Specialty chemicals companies who implement supply
chain excellence programs report as much as a 10 % in-
crease in margins. This tangible impact on the bottom line
demonstrates that supply chain excellence is not an esoteric
term, but an actionable initiative that specialty chemicals
companies cannot afford to ignore.
Supply chain leaders need to evaluate the critical issues
that prevent their supply chain operations from adapting to
their business needs. Typical issues include operating in
business silos, lack of visibility, and lack of decision support
tools, which compounded, significantly hinder the ability for
the business to respond quickly to customer demand. It is
important for business leaders to identify these challenges in
their organisation and to take action to achieve supply chain
excellence to successfully navigate market complexity and
unlock opportunity.
This article discusses the challenges of effective supply
chain operations and decision making, introduces software
solutions to transform the Sales & Operations Planning
(S&OP) and Scheduling functions, and outlines the benefits
and opportunity for specialty chemicals producers to maxi-
mise profitability to gain a competitive edge.
Challenges facing the specialty
chemicals business
Specialty chemicals companies navigate a number of
external and internal variables on a daily basis that chal-
lenge decision making around forecasting, planning, and
scheduling on both short and long-term time horizons. The
typical challenges that add complexity and place pressure
on operations include:
• Globalisation –
The rise of multinationals has had a
dramatic effect on the industrial sector. For specialty
chemicals producers, globalisation has heightened the
focus on the supply chain, introduced new complexity
and narrowed the margin of error between profit and loss.
Producers face the double-edged sword of pursuing new
markets (and new opportunities) and opening themselves
to new competition. The net result has been a new drive
for supply chain excellence.
• Uncertain demand patterns –
Specialty chemicals producers
face uncertain and unpredictable demand patterns with
limited visibility of future customer orders. Events, such
as the introduction of new products, expiration of patents,
the appearance of generics or announcements by regula-
tory boards, may introduce minor shocks to demand. In
turn, the impact on product pricing creates major swings
Globalisation and the uncertainties of
an ever-changing economic landscape
have introduced new complexity to the
specialty chemicals business. On a daily
basis, specialty chemicals producers
must navigate multiple variables to
determine the most profitable products
to produce, when and where to produce
them and how to successfully execute
against that plan.
Article supplied by IChemE and Aspentech
This article is
published with the
kind permmision
of IChemE and
Aspentech