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GHS Compliance in 2025: From Reactive Reporting to Integrated Readiness
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GHS Compliance in 2025: From Reactive Reporting to Integrated Readiness
GHS Compliance in 2025: From Reactive Reporting to Integrated Readiness 950 627 Xcelpros Team

Introduction

For chemical manufacturers, compliance is not a checkpoint. It’s a daily operational reality. And in 2025, managing GHS chemical labeling compliance isn’t just about printing the right pictograms or storing SDS files. It’s about making sure your data, documents, and decisions are aligned across systems, stakeholders, and time zones. It’s about safeguarding your brand, your supply chain, and your license to operate in a fragmented global market.

The rules haven’t become simpler. They’ve become faster. Regulatory expectations now assume companies have integrated visibility, not just paperwork. And with AI playing a more active role in industrial compliance, the assumptions around what’s “reasonable to expect” from a chemical company are shifting, pushing towards greater proactive readiness.

So, what does that mean for labeling, SDS, and compliance today?

The Realities Compliance Teams Still Navigate

Despite years of digital transformation, many chemical firms still struggle with:

  • Label duplication and inconsistency

    Teams manually adjust label templates based on product or geography, introducing inconsistency and delay. Imagine the headache of a single product requiring five slightly different labels for five key export markets, a small error here can mean costly recalls or delayed shipments.

  • SDS authoring silos

    Authoring, translation, and version control often exist in separate systems (or spreadsheets), increasing compliance risk, particularly with the need for rapid updates due to new classifications. This often feels like a never-ending game of whack-a-mole, where an update in one country triggers a cascade of manual changes that are difficult to track.

  • Delayed regulatory responses

    By the time a new DEA rule or GHS update makes it into a workflow, batches have already been produced, shipped, or flagged. This is particularly challenging given the accelerated pace of global regulatory changes in 2025. The cost isn’t just fines; it’s lost market opportunities, reputational damage from product seizures, and the sheer inefficiency of rework.

These aren’t edge cases. They’re the lived experience of mid-sized chemical companies working across geographies and product lines, companies with growing volumes, growing regulation, and limited margin for rework.

What’s Changed in 2025?

GHS compliance is now deeply tied to the operational structure of your business. The days of bolt-on compliance tools are fading. Regulators are looking not only for the presence of data but for evidence that it drives behavior.

The year 2025 marks a period of significant GHS evolution and implementation worldwide, necessitating a shift from reactive reporting to integrated readiness:

  • Global Harmonization, Local Variations – A Geopolitical Dance: While the goal is harmonization, regional adoptions of different GHS revisions create complexity, often reflecting diverse national priorities, trade bloc regulations, or socio-economic considerations. For instance:
  • Brazil mandates the implementation of ABNT NBR 14725:2023 (based on UN GHS Rev. 7) by July 4, 2025, introducing new categories and classification adjustments. This update underscores South America’s increasing integration into global chemical trade, demanding specific compliance pathways for companies exporting to or manufacturing within this growing market.
  • The European Union is preparing to align its CLP Regulation with GHS Revisions 8-10, and partially with Rev. 11 (aerosols, skin sensitizers in mixtures), with delegated regulations expected by late 2025 and a likely two-year implementation period. The REACH Recast, also expected by late 2025, will bring significant changes, including expanded hazard classes (e.g., endocrine disruptors, PMT substances). The EU, a major importer and exporter, continues to set a high bar for chemical safety, influencing global standards and requiring meticulous adaptation from its trading partners.
  • China is seeing new mandatory national standards, such as GB 45673-2025 for hazardous chemical enterprises (effective November 1, 2025) and GB 6944-2025 for dangerous goods classification (effective October 1, 2025), which refine classification rules and expand scope. As a global manufacturing hub and a critical market, China’s evolving GHS alignment presents unique challenges and opportunities, requiring careful navigation of its specific regulatory frameworks.
  • Japan’s JIS Z7252:2019 and JIS Z7253:2019 (based on UN GHS Rev. 6) are expected to be revised in 2025 (or early 2026) to align with UN GHS Rev. 9, impacting flammable gases, pressurized chemicals, and hazard/precautionary statements. Japan’s precise regulatory landscape often influences Asian regional practices, making its updates critical for companies with a presence across the continent.
  • The United States (OSHA HCS) completed its alignment with GHS Rev. 7 as of July 19, 2024, bringing stricter SDS content/format, a critical 90-day update timeline for new information, and enhanced labeling requirements (including QR codes). The US, with its vast internal market and trade relationships, mandates that companies align with its specific HCS amendments, creating another distinct compliance pathway.

What’s new:

  • Version-aware SDS workflows: It’s not just about having the latest sheet, it’s about ensuring the right sheet version reached the operator or customer at the right time, especially with continuous updates from various GHS revisions and the imperative to comply with the most current regional standard.
  • Label printing logic tied to production steps: Regulatory label changes are being tied directly to batch triggers—what gets printed when, and how it varies by geography or use-case, including bilingual requirements (as seen in India’s Insecticides Rules 2025) and the integration of new pictograms or hazard statements from GHS Rev. 11.
  • DEA compliance tracking is tightening: Reporting expectations are stricter across Schedule II chemicals. Time lags and manual reconciliations are being scrutinized. This tightening reflects global efforts to combat illicit drug diversion, impacting chemical supply chains worldwide.

This is where integrated systems start making the difference – not by doing more, but by making the compliance layer the natural byproduct of production, not a separate task to remember. It transforms compliance from a cost center into a strategic enabler for seamless global operations.

Where AI Is Starting to Matter

AI is no longer a novelty in chemical manufacturing; it’s a real tool. But in compliance, how it’s used — and how leading organizations adopt it — makes all the difference.

In 2025, we’re seeing three dominant AI capabilities emerge alongside proven industry practices:

  1. Predictive AI

    AI models now flag labeling issues before they happen based on past violations, region-specific rules, or unusual material usage patterns. This means compliance risks can be anticipated across diverse markets. For example, an AI engine can highlight a potential non-compliance issue for a shipment bound for Brazil before it leaves the factory floor, saving immense time and cost.

  2. Agentic AI

    Semi-autonomous agents assist with exception handling, template configuration, and even SDS language suggestions based on the latest rulebooks like GHS Rev. 10 or Rev. 11. Imagine an AI assistant autonomously proposing the correct precautionary statements for a new hazardous substance classification based on EU CLP updates — then routing it to compliance officers for review.

  3. Industrial AI with Built-in Regulatory Intelligence

    The new frontier is models that self-train on compliance libraries (GHS, OSHA, WHMIS, DEA, etc.) and adapt dynamically as regulations change. Instead of manually feeding in updates, these AIs learn the nuances of evolving standards — whether Chinese GB updates or Indian CMSR drafts — and reduce the burden on human compliance teams.

How Industry Leaders Are Approaching GHS Compliance

While AI is enabling compliance, global leaders are pairing technology with rigorous governance:

  • Supply Chain Rigor: Companies like Apple, Google, and Microsoft enforce strict Restricted Substances Lists (RSLs) and supplier codes of conduct. They mandate GHS-compliant SDS, labeling, and worker training throughout their supply chains — even in regions where enforcement lags. Proactive auditing of supplier chemical management reduces global risk exposure.
  • Internal Operations & Product Stewardship: Within their own operations, these companies embed GHS into Environmental Health & Safety (EHS) frameworks, covering chemical storage, handling, and waste. Amazon, for example, requires sellers to provide GHS-compliant SDS and labeling for listed products — extending compliance to its vast ecosystem.
  • Leveraging Technology: These same tech giants use digital platforms and analytics to track chemical use, manage SDS libraries, and enforce compliance at scale. This aligns closely with the integrated readiness that AI platforms like iCM support.
  • Strategic Advisory & Transformation: The Big 4 consultancies (Deloitte, PwC, EY, KPMG), along with firms like Accenture and McKinsey, are helping chemical manufacturers translate GHS into enterprise strategies. Their work spans compliance roadmaps, integrated EHS platforms, AI-driven SDS authoring, risk gap assessments, and training — embedding GHS into broader ESG strategies.

The Takeaway

AI is only as good as the infrastructure underneath it. Solutions like iCM are enablers — unifying labeling templates, SDS logic, regulatory mappings, and audit histories so AI has structured, trusted data to work with.

At the same time, the way industry leaders approach compliance — combining rigorous supply chain standards, operational EHS discipline, technology adoption, and advisory expertise — offers a blueprint. Together, these trends show that GHS compliance in 2025 is less about reacting to regulations and more about building proactive, resilient systems that integrate AI, governance, and global best practices.

Discover how AI-powered compliance reduces risk.

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What iCM Represents

We built iCM not as a response to market buzz, but in direct collaboration with teams who live these problems daily. DEA reporting inconsistencies. Multi-region SDS formatting. GHS label updates that miss a country-specific nuance and trigger rework.

iCM brings SDS, DEA, and GHS into a single environment. But that’s not the pitch, it’s the baseline.

What it means practically is:

  • Fewer touchpoints for error.
  • Real-time synchronization between regulatory updates and operational templates.
  • Faster reaction when rules change, because the system changes with them.

And perhaps most importantly, a space where compliance data doesn’t just sit idle, it drives decisions.

What’s Ahead: Compliance as a Workflow, Not a Checkpoint

In the next 12–24 months, chemical companies will face a compliance environment that is more fragmented, more digital, and more unforgiving:

Region-Specific Variance Will Accelerate

With GHS Rev. 10/11 rolling out, EU CLP 2023–2024 amendments taking effect, and India’s CMSR draft nearing enforcement, global exporters will contend with sharper regional differences. Leaders are already adopting supplier codes of conduct and RSL frameworks that assume compliance everywhere, not just where enforcement is strict.

AI Validation Loops Become Standard Practice

Compliance teams won’t just use AI for SDS authoring or label checks, they’ll actively validate and retrain it against constantly updating regulatory libraries. This closes the gap between fast-moving revisions and the slow pace of human-only reviews, reducing both risk and rework.

Real-Time Compliance Reporting as a Mandate

From DEA precursor tracking to SDS distribution logs, regulators are shortening compliance reporting windows. SDS updates within 90 days (US), instant hazard communication requirements in EU, and traceability expectations in Asia all point toward a world where “near real time” is the new baseline.

Compliance as an Operational Advantage

Organizations that treat compliance as part of supply chain resilience and ESG strategies, not just audit prep, will be the big winners. This means aligning compliance workflows with supplier management, product stewardship, and digital EHS platforms. As Apple, Microsoft, and Amazon demonstrate, proactive rigor sets the bar higher than regulations demand, ensuring operational continuity and brand protection.

The companies that wait for their annual audit, or for a violation to trigger investment, will be left scrambling. The companies that integrate compliance into daily operations, as a workflow, not a checkpoint, will define the new standard.

Unify SDS, DEA, and labeling into one system.

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Final Thoughts: Future-Proofing Chemical Compliance

GHS chemical labeling compliance in 2025 is not just a checkbox, it’s a living, adapting system of people, data, and automation.

Yes, the penalties still matter. Yes, the rules are still complex. But the bigger story is how compliance is evolving into a driver of operational intelligence and supply chain resilience. Industry leaders are proving that compliance isn’t just internal, it extends across global supplier networks, EHS frameworks, and ESG strategies.

You don’t need five tools or a battalion of consultants to keep up. What you need is the right architecture: a foundation that unifies labeling templates, SDS logic, regulatory mappings, and audit histories. That’s what allows AI to add real value and ensures supplier compliance is aligned with global standards whether it’s GHS Rev. 11, EU CLP updates, or emerging regional frameworks like CMSR in India.

Because in chemical manufacturing, compliance is not just about being correct. It’s about being ready. Ready for audits, ready for shifting rules, and ready to operate with the same rigor and foresight as the world’s most resilient enterprises.

How Dynamics 365 Helps Transform Chemical Companies
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How Dynamics 365 Helps Transform Chemical Companies
How Dynamics 365 Helps Transform Chemical Companies 700 500 Xcelpros Team

The chemical industry is a complex and rapidly evolving landscape that requires businesses to stay agile and responsive to market demands. With increasing competition and constantly changing regulations, chemical companies must streamline their operations and optimize their business processes to stay ahead.

Microsoft’s Dynamics 365 gives businesses in the chemical industry a chance to drastically transform their operations and drive growth. In this article, we will explore how Microsoft D365 impacts the business operations of small and large chemical companies.

Improved Inventory Management

Managing inventory effectively can be a big challenge, especially for companies with a wide range of raw materials, finished products, and by-products.

One of inventory management’s biggest challenges is keeping inventory levels accurate and in real time. Without real-time visibility into inventory levels, making informed decisions about when to reorder materials or products can be difficult, resulting in stock-outs or overstocking.

Microsoft’s Dynamics 365 solutions offer robust inventory management capabilities that let chemical companies optimize inventory levels, reduce waste, and improve customer satisfaction. With the ability to track inventory levels in real-time, chemical companies can make more informed decisions about when to reorder materials or products, ensuring they always have the right inventory levels to meet their customers’ needs.

In addition to real-time inventory tracking, D365 offers tools for demand planning and forecasting. By optimizing inventory levels, chemical companies can reduce waste and minimize the need for costly storage facilities, leading to cost savings and increased profitability.

D365 also provides chemical companies with advanced analytics and reporting capabilities, allowing them access to valuable insights into their inventory management practices. With these insights, companies can identify areas for improvement and make data-driven decisions that can help optimize their inventory levels and reduce costs.

Streamlined Supply Chain

The chemical industry is a complex web of suppliers, distributors, and logistics providers. Businesses need to consider the movement of materials and products globally, with multiple stakeholders involved in the process. Managing this complex network can be challenging for chemical companies, particularly in ensuring timely delivery to customers and optimizing supply chain operations.

D365 provides a powerful solution to address these challenges. With its supply chain management capabilities, chemical companies can streamline their operations and gain visibility into their entire supply chain. This enables them to make more informed decisions, reduce lead times, and improve on-time delivery to customers.

One of the key benefits of Dynamics is its ability to provide real-time data and analytics about your supply chain. This helps chemical companies identify potential bottlenecks and delays in the supply chain and take proactive steps to address them. For example, they can quickly identify when a supplier is running low on raw materials and take steps to ensure timely replenishment of those materials.

By streamlining their supply chain operations, chemical companies can reduce costs and improve efficiency. They can eliminate manual processes and reduce the risk of errors and delays in the supply chain. This can lead to improved customer satisfaction and increased revenue for the business.

Figure 1:How Microsoft Dynamics 365 helps Chemical Companies

How Microsoft Dynamics 365 helps Chemical Companies

Enhanced Financial Management

A crucial aspect of any business, financial management is particularly important for chemical companies looking to manage their finances effectively. These companies try their hardest to maintain profitability while complying with various regulations related to the production, storage, and transportation of hazardous chemicals. In this regard, D365 provides a comprehensive financial management solution that enables chemical companies to manage their financial processes more efficiently.

With Dynamics, chemical companies can gain better visibility and control over their finances. They can easily manage budgets, track expenses, and forecast revenue and expenses for more accurate financial planning. The platform provides various financial reporting tools that allow chemical companies to generate detailed financial statements, balance sheets, and cash flow reports.

It also enables chemical companies to manage their accounts payable and receivable more efficiently. Companies can easily create purchase orders, track invoices, and manage supplier payments. They can also manage customer invoices and receive payments online, making tracking outstanding payments easier and improving cash flow.

Improved Compliance and Regulatory Management

The entire chemical industry is under constant pressure to maintain compliance with regulatory bodies at both the national and international levels. Failure to comply with these regulations can lead to significant fines, legal liabilities, and damage to the company’s reputation, making it critical for chemical companies to implement a comprehensive compliance management solution to help them stay compliant with all regulatory requirements.

Microsoft’s solutions provide chemical companies with powerful compliance and regulatory management capabilities. These capabilities enable chemical companies to track and report on regulatory compliance, manage hazardous materials, and maintain compliance with international trade regulations.

One of the biggest benefits of D365 is its ability to track and report on regulatory compliance. With robust compliance management tools, chemical companies can keep track of all relevant regulations and ensure that their operations are fully compliant. This includes tracking regulatory changes, identifying areas of non-compliance, and implementing corrective actions.

Another important aspect of compliance management in the chemical industry is managing hazardous materials. D365 provides chemical companies with tools to effectively manage hazardous materials, including tracking the location of hazardous materials, ensuring proper labeling and packaging, and managing hazardous waste disposal. By managing hazardous materials more effectively, chemical companies can reduce the risk of accidents and ensure compliance with regulatory requirements.

Finally, all chemical companies must maintain compliance with international trade regulations, which can be complex and constantly changing. Microsoft’s solutions allow chemical companies to maintain compliance with these regulations, including managing trade licenses, tracking trade agreements, and managing customs processes. Maintaining compliance with international trade regulations means chemical companies can ensure their operations remain undisrupted so they can continue to serve their customers worldwide.

One Example

A global chemical manufacturing company with several manufacturing sites worldwide faced numerous challenges in managing their complex supply chain and manufacturing operations, including a lack of visibility into production schedules and inventory levels, manual data entry, and inefficient manufacturing processes.

By implementing Microsoft Dynamics 365, the company was able to streamline their business processes and gain real-time visibility into their manufacturing operations. They also used the advanced analytics capabilities of D365 to gain insights into their operations and identify additional areas for improvement.

With D365, the Chemical Company was able to optimize its production planning, reducing lead times by up to 50%. They also reduced inventory levels by up to 20%, resulting in significant cost savings. Additionally, Dynamics enabled the organization to automate several manual processes, saving time and reducing errors.

Overall, the implementation of D365 has significantly impacted the business operations within Chemical Companies, including increased efficiency, reduced costs, and improved customer satisfaction.

One chemical company that implemented Microsoft Dynamics 365 was able to increase its inventory accuracy by 20%, reduce its order processing time by 40%, and improve its on-time delivery rate by 25%.

Conclusion

Implementing Microsoft Dynamics 365 has significantly impacted the business operations of chemical companies. D365 has been helping to revolutionize business operations for chemical industry businesses by providing powerful tools for managing the supply chain, production, inventory, quality control, and financials. With Dynamics, chemical companies can streamline their operations, gain real-time visibility into their business performance, and make data-driven decisions that drive growth and profitability.

At XcelPros, Microsoft Partner. We have a team of experts that can help chemical businesses successfully implement D365 to realize its full potential. We understand the unique needs of the chemical industry and can provide customized solutions tailored to your business requirements. Our team can work with you to define your business requirements, develop a project plan, and provide ongoing support to ensure that your software continues to meet your evolving needs.

Our expertise with D365 lets us help chemical businesses optimize their operations, improve product quality, reduce costs, and increase customer satisfaction. For more information,

Contact us to learn how we can help you leverage the power of D365 to achieve your goals.

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Advanced Analytics and Power BI in Chemical Manufacturing
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Advanced Analytics with Power BI in Chemical Manufacturing Industry
Advanced Analytics with Power BI in Chemical Manufacturing Industry 700 500 Xcelpros Team

Chemical manufacturing is a complex process with several different variables to consider at any given moment. Staying ahead of the competition today means using technology to help drive productivity and profitability.

Advanced analytics features in Power BI supply valuable insights into the substantial amounts of data that enable chemical manufacturers to make more informed decisions and optimize their operations.

In this blog post, we’ll explore how advanced analytics in Power BI can help chemical manufacturers drive productivity and profitability, including how data-driven decisions can be used to improve performance, reduce costs, and create more value for the business.

Power BI and the benefits of Advanced Analytics

In the chemical industry, data-driven decisions are necessary for businesses looking to maintain a certain level of efficiency and profitability. This means that organizations need access to reliable analytics and insights from their data to make strategic decisions that lead to better outcomes. Advanced analytics in Power BI are powerful tools that can help chemical companies maximize their productivity and profitability.

Advanced analytics solutions offer various features designed to help chemical companies find trends, uncover hidden patterns, and predict future events. Using the latest AI-based algorithms, these advanced analytics solutions can uncover insights that would otherwise be impossible to discover, resulting in improved decision-making and more efficient operations.

Power BI is an analytics tool that provides an interactive platform for visualizing and slicing data. Included features like charts, graphs, and dashboards allow users to easily explore and analyze data from anywhere, making it easy to gain a comprehensive understanding of their data and make more informed decisions.

Figure 1:Benefits of Advanced Analytics in Power BI

Benefits of Advanced Analytics in Power BI

Integrations

Power BI is a powerful business intelligence tool that can integrate with various systems, including enterprise resource planning (ERP), customer relationship management (CRM), financials, and more. These integrations make connecting data across different platforms easier, ensuring that all stakeholders have access to the information they need to make decisions quickly and accurately.

For businesses in the chemical industry, Power BI integrations can be incredibly useful for businesses in the chemical industry. They allow companies to make better use of their data and get insights from multiple sources. An ERP integration can help track inventory and orders, while a CRM integration can offer information about customer preferences and buying habits. By connecting these different systems, businesses can better understand their market and customers.

In addition, Power BI integrations can be used to improve operational efficiency. By integrating various systems, such as enterprise asset management (EAM) and predictive maintenance systems, businesses can get real-time insights into their equipment’s performance. This can help them find potential problems before they become major issues and ensure that their operations run smoothly.

Overall, Power BI integrations can be invaluable for businesses in the chemical industry. By connecting multiple systems, they can gain better insights into their operations and customers, improve operational efficiency, and ensure compliance with regulatory requirements. With Power BI, businesses can make better use of their data.

Automatic Reporting

Power BI supports automated reporting to help show trends and improve productivity. This automation allows companies to quickly find problems or opportunities within their processes and operations, which helps them make informed decisions quickly and efficiently.

With automated reporting capabilities, businesses in the chemical industry can save time by automating data collection and reporting processes. They can also receive help from the insights generated by this process, allowing them to make smarter decisions in less time. With accurate and up-to-date data, businesses can measure performance, compare trends, and optimize operations more effectively.

Overall, automatic reporting with Power BI helps businesses in the chemical industry achieve greater efficiency, profitability, and customer satisfaction.

Report Customization

Power BI gives businesses several ways to customize reports to meet the needs of any business, including those in the chemical industry. Businesses can quickly and easily customize their reports to streamline the entire process. This includes creating personalized visualizations, adjusting the format and layout of data, and adding new elements to existing reports.

Customized reports can give these businesses key data points to check progress, performance, and safety. Reports can be tailored to track specific aspects of a business’s operations and production, allowing for more efficient and effective decision-making. The customization process is highly intuitive and provides users with an interactive dashboard for creating and editing reports.

Overall, report customization provides businesses in the chemical industry with the tools they need to stay ahead of their competitors and maximize their value in the market. With custom reports, companies can easily identify trends and make better decisions faster, increasing productivity and profitability.

Simplified Collaboration

Power BI was designed from the start to promote collaboration and communication across teams in the chemical manufacturing industry, simplifying data sharing and streamlining how different departments and locations work together to achieve their objectives.

One of the main benefits of Power BI is that it helps users break down data silos. By allowing users to pull from multiple sources, such as cloud-based databases and on-premises sources, Power BI enables users to get a comprehensive view of their data. This helps decision-makers in the chemical manufacturing industry better understand the relationships between different pieces of data, which can then inform more informed decisions.

Power BI also makes it easier to access and share data with others within the organization. Through built-in visualizations, users can easily create a dashboard of all the data they need to review, making it easier to collaborate on data-driven decisions. Power BI also offers custom security settings, allowing users to control who can view, edit, and access the data. This ensures that sensitive data stays secure and private while allowing users to collaborate on projects.

Power BI’s collaborative features make it an invaluable tool for the chemical manufacturing industry. By eliminating data silos, users can access a single source of truth that can be shared with anyone in the organization. Additionally, its ability to restrict access to certain data and its customizable security settings help keep confidential information safe. Finally, its built-in visualizations help make it easier for everyone involved in a project to collaborate on data-driven decisions.

Predictive Maintenance, Throughput Analytics, and Maximizing Value

Chemical manufacturing is an incredibly complex industry with many operations and processes. Fortunately, advanced analytics and Power BI can help chemical producers make data-driven decisions and optimize their production, maintenance, and supply chain operations. Three advanced key analytics–based tools can help chemical producers improve their performance: predictive maintenance, throughput analytics, and maximizing Value.

Predictive maintenance is one of the most effective ways to ensure the best performance of chemical manufacturing assets. This tool uses machine learning algorithms to identify patterns in equipment behavior and predict potential failures before they occur. Predictive maintenance also helps to minimize downtime by enabling initiative-taking maintenance actions. This approach can increase operational efficiency and reduce costs associated with unexpected equipment breakdowns.

Throughput analytics are essential for optimizing production operations in chemical manufacturing. By analyzing production data, chemical producers can gain insights into their processes’ efficiency, find improvement opportunities, and reduce waste and inefficiency. Yield analytics can decide how effectively raw materials are being converted into finished products, while energy analytics helps producers identify areas of excessive energy consumption. Finally, throughput analytics enables chemical producers to optimize their production schedules by tracking the performance of each stage of the process.

Maximizing Value is important for enhancing the profitability of chemical producers’ supply chains. Power BI uses advanced tools to analyze customer data and uncover valuable insights that can be used to create new products and services that meet customer needs. Value maximization can also help chemical producers find opportunities to reduce costs in their supply chains by streamlining processes, finding more cost-effective sources of raw materials, and improving planning operations.

Next Steps

As with any technology solution, getting the most out of Power BI for your chemical manufacturing business requires a solid implementation plan. To ensure success, best practices for implementing Power BI at a chemical company should include these steps:

  • Gathering requirements from key stakeholders to find specific data needs and business goals.
  • Designing an analytics solution tailored to the organization’s unique business and data environment.
  • Developing an end-user interface that is intuitive and easy to use.
  • Training users on how to get the most out of their Power BI data.
  • Testing and refining the system to ensure it meets the needs of all stakeholders.

If you are ready to take the next step in using advanced analytics and Power BI to improve productivity and profitability in your chemical manufacturing business, contact us to learn more.

Schedule a call, our experienced team can help you design, implement, and support a custom solution tailored to your requirements. With the right analytics solutions, you can drive performance while getting the insights you need to stay competitive in today’s changing markets.

Predictive Pricing and Dynamics 365 in the Chemical Industry
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Predictive Pricing and Dynamics 365 in the Chemical Industry
Predictive Pricing and Dynamics 365 in the Chemical Industry 700 500 Xcelpros Team

One of the biggest challenges facing the chemical industry today is implementing dynamic pricing — predictive or strategic pricing- allowing you to adjust prices based on market demands and information.

With strategic pricing, companies can enjoy more consistency in sales, higher profits and faster inventory turnover (and therefore less risk associated with carrying excess inventory). Thanks to cloud computing and the power of Microsoft Dynamics 365. Implementing strategic pricing isn’t as complex or expensive as it may seem. Here’s how predictive pricing can work for you in the chemical industry.

The Basics of Dynamic Pricing

The chemical industry is one of the most competitive industries in the world. To remain competitive and maximise profits, chemical companies must use data-driven dynamic pricing strategies. To ensure their prices are aligned with the market and their products are priced competitively. Dynamic pricing involves using data-driven strategies such as predictive pricing and price optimization to determine optimal prices for each product, market, and customer.

Commonly used in retail, dynamic pricing has become an effective way for chemical companies to optimize their pricing strategy. By leveraging data-driven analysis and predictive analytics, companies can accurately forecast customer demand, spot market trends, and identify opportunities to set the right prices for each product and market. With this information, chemical companies can adjust their pricing regularly to reflect changing market conditions and customer needs.

For chemical companies looking to gain a competitive edge, implementing a dynamic pricing strategy with Microsoft Dynamics 365 is a good way to get started. Dynamics 365 provides data-driven insights, intelligent insights, automated pricing recommendations and predictive price optimization capabilities that enable companies to make strategic pricing decisions quickly and effectively.

Chemical companies can optimise their pricing strategy by leveraging Dynamics 365’s dynamic pricing tools. To ensure they stay ahead of the competition and maximize their profits by accurately forecasting customer demand and optimizing pricing. Companies can set the right prices for each product and market, ultimately increasing their bottom line.

Predictive Pricing

Chemical companies can also benefit from predictive pricing that allows them to optimize their prices in response to changing market conditions. By understanding the customer’s demand, the chemical company can set its prices according to the optimal price point for each individual customer. This helps the company remain competitive in the marketplace. As well as maintain a healthy profit margin. To be successful, predictive pricing requires three things:

  1. 1.Key price drivers
  2. 2.Full control of storage and capacity
  3. 3.Integrated insights

Figure 1:Predictive Pricing with Microsoft Dynamics 365

Predictive Pricing with Microsoft Dynamics 365

Microsoft Dynamics 365 is a great resource for chemical companies implementing a predictive pricing strategy. It enables users to access data quickly and easily, identifying key price drivers and making informed decisions about pricing and other business matters. Microsoft Dynamics 365 also provides customers with an intuitive platform to manage their accounts and business processes, enabling them to develop a comprehensive pricing strategy that meets their needs.

By leveraging predictive pricing with Microsoft Dynamics 365, chemical companies can better understand their customer base, anticipate changes in demand, and adjust their prices accordingly. This helps them stay ahead of their competition while optimizing profits and margins. The ability to quickly adjust prices based on real-time data helps chemical companies stay competitive and increase their sales.

Dynamic Price Optimization

Companies need to have the right pricing strategy to stay ahead. One of the most effective strategies that can be used is dynamic pricing, which allows companies to adjust their prices in real-time according to changes supply and demand. By leveraging data-driven dynamic pricing strategies, chemical companies can optimize their prices to maximize their profit margins and stay competitive.

Dynamic pricing relies on predictive analytics to inform pricing decisions based on customer behaviour, market trends, and other factors. With Microsoft Dynamics 365, chemical companies can access powerful data insights that allow them to understand market dynamics and react quickly to changing conditions. This real-time analysis helps companies set pricing strategies to maximize profits while still meeting customer demands.

By leveraging predictive analytics and dynamic price optimization, chemical companies can take a more strategic approach to pricing that allows them to react quickly and effectively to changes in the market. This data-driven approach allows them to adjust their prices in real-time based on current market trends and customer behaviour. Ensuring they remain competitive in a highly competitive industry.

Using dynamic pricing, chemical companies can optimize their pricing strategies with increased accuracy, providing customers with competitive prices while still maximizing profits. By leveraging Microsoft Dynamics 365, chemical companies can use powerful data insights to drive their pricing decisions and stay ahead of the competition.

Trade agreements and pricing

When it comes to pricing in the chemical industry, it is essential to have a well-defined strategy in place. Trade agreements and pricing structures are constantly changing, making it difficult for companies to forecast their financial performance accurately. Fortunately, data-driven dynamic pricing and predictive pricing in chemicals can help to address this challenge.

Trade agreements are the main way discounts and pricing is configured in D365 Finance and operations, defining the logic the system uses to set different prices. You can set up and enable trade agreements that control pricing (sales pricing, purchase pricing) and discounts (Line, Multiline, and Total discounts) for items, customers, and vendors. Once these agreements are configured, pricing and discounts can be applied to orders, invoices, and quotes.

Agreements are usually configured to apply to a specific Item Code by preference:

  • Table – The first agreement the system looks for, targeting a single customer, vendor, or item.
  • Group – If there are no agreements coded: Table, the system checks for agreements that can apply to a group of customers, vendors, or items.
  • All – If agreements aren’t found coded for either Group or Table the system checks agreements that can apply to all customers, all vendors, or all items.

In total there are four types of agreements that can be activated:

  • Price agreements – Sale and purchase pricing for items that can be different for a customer or Vendor.
  • Line discounts – Line discounts for items that can be different for a customer or Vendor.
  • Multiline discounts – Just like Line Discounts, only usable with the item code set to Group or All.
  • Total discounts – Discounts for entire orders, these cannot be used with Group or Table item codes.

With the added power of Microsoft Dynamics 365, chemical companies can gain real-time insights into trade agreements, enabling them to adjust prices accordingly and remain competitive. In addition, using predictive pricing in chemicals can provide companies with insight into consumer demand and help them anticipate customer needs.

With data-driven dynamic pricing tools, companies can create an optimal price point to maximize revenue and profits while increasing customer satisfaction. Predictive pricing is a key element in crafting a successful pricing strategy in the volatile chemical industry.

Overall, dynamic pricing and predictive pricing in chemicals offer an opportunity for companies to gain a competitive edge by staying ahead of the curve. Using Microsoft Dynamics 365 to monitor trade agreements and adjust prices accordingly, chemical companies can remain competitive while optimizing their profitability.

Next Steps

With the advent of data-driven dynamic pricing, the chemical industry is constantly changing. Companies must stay on top of the game. Leveraging a pricing strategy built on data insights can help chemical companies increase profitability and stay ahead of their competition. To implement such a strategy, chemical companies should partner with industry experts familiar with predictive pricing models and Microsoft Dynamics 365.

Experts in the field understand how to use data-driven dynamic pricing to optimise profits. They can help chemical companies set up a pricing model that considers market conditions, competitors’ strategies, and customer demand. This allows chemical companies to set prices that will maximize their profits accurately. Experts can also assist with implementing price optimization tools using Microsoft Dynamics 365. To provide a comprehensive platform for the chemical industry to manage pricing and sales.

Another advantage of utilizing industry experts is that they can provide valuable guidance on creating a strategic pricing plan tailored to the company’s objectives and goals. With the help of experienced professionals, chemical companies can learn how to set prices that capture maximum value for their products and services. Moreover, these experts can offer real advice on maintaining dynamic pricing and other pricing models over time.

Implementing dynamic pricing and predictive models within the chemical industry requires expertise and insight. Industry experts have the knowledge and experience to help chemical companies create an effective pricing strategy to maximize profits and drive success.

Working with the right partner can help chemical companies leverage data-driven dynamic pricing, optimize prices and use Microsoft Dynamics 365 to make informed decisions about their pricing strategy. Contact us today to see how we can help.

What Chemical Companies Can Expect from increasing their Post-Covid IT Budgets
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What Chemical Companies Can Expect from Increasing IT Budgets Post-Covid
What Chemical Companies Can Expect from Increasing IT Budgets Post-Covid 700 500 Xcelpros Team

Introduction

Chemical companies across the board have been increasing their IT and technology budgets more than ever. This increase in funding isn’t just good for consumers looking forward to new features and a better experience; it also means that your company will be safer from malware threats and cyberattacks, which can be disastrous for any type of business.

Given how focused hackers are on Chemical companies, this increased attention to cybersecurity couldn’t come at a better time! Whether your company deals with energy or manufacturing, chances are you will benefit from these new investments in IT, so what should you expect?

A great time to increase investments in your technology

Today’s recovering economy is expected to be a boom for many industries, and chemical companies are no exception.

According to Garnter.com:

“Worldwide IT spending is projected to total $4.5 trillion in 2022, an increase of 5.1% from 2021”

Figure 1:IT Spend and Growth Forecast

IT Spend and Growth Forecast

With this kind if increased demand for their products, now’s the perfect time for chemical companies looking to invest in new enterprise technology. By doing so, businesses can streamline their operations, improve efficiency, and better meet customer needs. In addition, increased investments in technology can help businesses become more agile and adapt to changing market conditions. For example, it allows for easy updates that reflect new economic developments.

Many Chemical companies who have invested in tech recently reported being able to quickly adjust during these difficult times and make necessary changes when needed. Other benefits reportedly tied to increased investments in enterprise technology include an increase in productivity, fewer errors due to human error, greater visibility into business processes and inventory levels at all times (across multiple locations), better integration with accounting software like Microsoft Dynamics 365 Finance and Operations and Business Central, improved security measures against hackers, and stronger safeguards against power outages or other environmental disasters that could impact data availability.

As any technology continues to change and evolve, investments in its latest innovations will always provide long-term advantages over outdated technologies. Considering these benefits, any company looking to thrive in this rapidly changing economy should consider investing in their technology sooner rather than later.

Bigger budgets help your business grow

Even today, the world is still uncertain, and businesses continue preparing for the worst while hoping for the best. One way that companies can set themselves up for success is by deciding to increase their IT and tech budgets. Bigger budgets mean better tools and software to help streamline processes and more resources for research and development. Additionally, increased IT spending could lead to improved customer service and support, which are essential for the chemical industry today. The companies that can adapt and grow their business will be the ones that thrive. Increased investment in IT and technology budgets could make all the difference in staying competitive in this fast-paced market.

Chemicals make up about 8% of GDP worldwide, so these companies need to stay innovative with their products to attract new customers. With an IT budget increase, these companies would have access to more reliable data systems and greater flexibility for expansion. These companies must keep investing in their infrastructure to compete against other firms like Bayer AG or Exxon Mobil Corp., which have also invested heavily in growing their technology departments.

Whether you’re a company like DuPont Co., Dow Chemical Co., or BASF SE, every penny counts for innovation. These chemical companies must maintain a healthy balance between maintaining their infrastructure and developing new technologies if they want to stay ahead of the curve.

Along with investing in R&D, there should be a plan for how your money will be spent. The introduction of cloud computing has made it easier for smaller firms to manage their cash flow; any company can now access massive computing power without paying hefty fees upfront. And not only does cloud computing allow for easy data storage, but it also allows users to remotely access applications without having any onsite hardware. Cloud computing services have reduced costs and opened the door for smaller enterprises looking to build their technological capabilities without worrying about making large capital investments upfront.

Leveraging technology to thrive

In today’s business world, technology continues to play a more important role than in the past. Chemical companies that don’t invest in modern, updated technology will be left behind, putting the future of their business at risk. The growing importance of tech is a trend that can’t be ignored, and only businesses that can keep up with changing times are likely to survive and thrive.

By increasing IT and technology budgets, chemical companies are setting themselves up for success now and in the future. From working on computerized project management systems to adapting current systems so they’re compatible with new tech, there are many ways that company leaders can start investing in their future right away—investing early in updating your systems means having access to some of the latest technology out there, not just what was available when your system was first created.

There are several cost benefits to investing in updated technology – it saves time and money by ensuring everyone is on the same page, reducing overall cost through improved efficiency, freeing up staff time by automating repetitive tasks like collecting data points or following up with suppliers, etc. With so many options available for companies looking to invest in new technologies and update their old ones (whether they have outdated software or hardware), there isn’t any excuse not to do so.

The challenges of scaling with limited resources

Scaling a business is easier with the added challenges of limited resources. With the right tools and technology in place, it is possible to overcome these challenges and scale your business successfully. In this post, we will examine some of the benefits that scaling a business with software can offer.

There are three main areas where new technology can provide an advantage over traditional methods:

  • Inventory Management.
  • Manufacturing.
  • Marketing.

These areas are all integral parts of running a successful business, and when they are handled properly, they can help you keep pace with the competition.

Inventory management is often a challenge for businesses of any size. But with effective inventory management software like our own S&OP application, which allows you to set alerts and schedules for orders and track purchases and sales at every level of the supply chain – raw materials through finished goods – managing your inventory becomes infinitely easier.

New technology simplifies complex processes like scheduling production orders, handling multiple batches simultaneously or even tracking job progress on production lines by integrating process data such as manufacturing flow sheets or operating instructions into one system. Thirdly, marketing has always been about creativity but unfortunately marketers don’t always have the time for creativity because their days are filled with tasks that don’t require creativity at all!

Things you should invest in first

As the world starts to come out of the Covid-19 pandemic, many businesses are looking at their budgets and wondering where to invest their money. For chemical companies, investing in IT departments and new technology is a smart move that will help them thrive in the post-pandemic economy.

For chemical companies to survive it’s becoming clear they need two things:

  • Reliable production lines.
  • A loyal customer base.

Modern technology can provide both. With new CRM systems, you can manage your client base precisely and ensure you’re keeping customers happy by providing them with what they want – when they want it. With the rise of e-commerce, this means being able to work remotely and deliver orders quickly via delivery drones or on foot. The software also helps ensure your production line stays running smoothly through alerts when there are any problems, so you don’t have to worry about bottlenecks or shortages.

If you want to empower your business with plenty of potential for growth and success, there’s no time to invest in an IT department and new technology!

Using your increased investment in enterprise tech wisely

There are many ways businesses have used their increased investment in technology wisely.

  • One way is using it to improve communication and collaboration within the company. This can be done through video conferencing, instant messaging, and document sharing platforms.
  • Another way businesses have used their increased investment in technology is by using it to improve customer service. This can be done through online chatbots, live chat, and automated customer service platforms.
  • Finally, businesses have also used their increased investment in technology to improve their marketing efforts. This can be done through social media, search engine optimization, and content marketing.

It’s important for business owners to make sure they don’t just focus on what they need now but instead plan for future needs as well. With an increase in spending on enterprise tech comes an increased need for cybersecurity experts as well. It’s also critical that a business not only invest in cybersecurity solutions but also in training for their employees so that they have a full understanding of how these solutions work. The most successful businesses will see the value of investing in all these areas no matter what because with every new change come new opportunities for growth and innovation.

Final thoughts

As the Covid-19 pandemic continues to lighten, it’s grasp more, and more businesses are seeing the value of increasing their IT and technology budgets. This is especially true for chemical companies, which have been hit hard by the pandemic. What’s the outlook for chemical companies looking to increase their technology budget? The answer depends on your situation, but there are some general things you can expect.

Firms already dealing with ongoing IT challenges will likely see their problems worsen as they attempt to cope with increased security risks, increased regulatory compliance costs, and more complex product development cycles.

In this case, it may be best to implement strategies like employee retraining programs and process automation that help decrease reliance on human labor in certain business areas.

On the other hand, if you’re currently on solid footing regarding tech advances in your company – or if you’ve just started out – then an increased budget could be just what you need.

Schedule a call today for more information or help to define your new technology budget.

Microsoft D365 F&O Improving the Customer Experience in Chemicals
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Microsoft D365 F&O Improving the Customer Experience in Chemicals
Microsoft D365 F&O Improving the Customer Experience in Chemicals 700 500 Xcelpros Team

At a Glance

  • The manufacturing industry runs with the integration of people, tools, processes, and information. The data generated from these facets need to be quantified and analyzed.
  • In the manufacturing world, those who know their metrics tend to learn the game’s tricks.
  • The metrics that matter the most are the ones that help you and your manufacturing company gain essential insights regarding different functionalities and business areas to improve the manufacturing process continuously.
  • One of the most crucial aspects of knowing and managing manufacturing metrics is systematically optimizing the best results.

Introduction

The world’s best chemical companies focus on building expertise in their lines of business to enhance customer experience, and one way to do it is by streamlining their supply chain. That’s why many chemical companies choose Microsoft Dynamics 365 Finance & Operations since it gives them access to modern tools they need to excel at managing their business and serving their customers better. With Microsoft D365 F&O, chemical companies can create higher quality products faster than ever before possible and will offer enhanced customer service.

The importance of Customer Experience (CX)

The recent focus on improving customer experience to increase profitability has made CX more critical than ever in several industries, including chemical and pharmaceutical. Companies are moving to modern technology like Dynamics 365 to help improve communication with customers, streamline processes, and enable data-driven decisions.

The result is a better overall experience for their customers, increasing profits. It is easy to see how improving customer experience can influence short- and long-term goals. While there are sure to be challenging when implementing these changes, it’ll be worth it in the end because of the benefits that include increased profits and happy customers. More industries should note how chemical companies are improving their customer experience with Microsoft Dynamics 365 Finance & Operations.

Why is the Chemical Industry Focusing More on Their Customers?

The chemical industry has recently begun to see the value of customer experience. This is because today’s customers are much more knowledgeable, with higher expectations than ever. To meet these expectations, businesses must provide a better customer experience – mainly with on-time, total shipments and competitive pricing.

It’s important to understand common misconceptions people may have about customer experience. It’s not about social media, marketing tactics, or creating a new app. CX includes understanding precisely what your customers want and then being able to deliver on those wants effectively.

Dynamics 365 F&O helps businesses in the chemical industry transform their data into actionable insights to help them understand exactly what their most valuable customers want, letting them improve their customer experience accordingly.

Some key areas that impact CX

CX has become a significant focus for businesses in recent years – happy customers are more likely to return and be part of your growth. They’re also more likely to spend money with a company they’re satisfied with.

More innovative pricing methods with coupons or discounts and supplying specialized packaging of chemicals are a few ways for companies to stay competitive in the market. Technology like Microsoft Dynamics 365 that accommodates these business needs can enable your business to stay ahead of the curve.

Microsoft’s cloud-based solution includes several CRM tools like managing contacts, tracking conversations and following up on leads, and analytical tools that can be tailored to meet your needs.

With these kinds of tools, businesses of any size can provide better service without hiring an expensive team of experts.

A better customer experience can:

  • lead to increased customer loyalty and customer satisfaction.
  • lead to increased revenue and market share for your business.
  • help you attract new customers and retain existing ones.
  • improve employee satisfaction and morale.
  • help reduce operating costs.
  • improve your company’s overall reputation.

Figure 1:Benefits of a Better Customer Experience

Benefits of a Better Customer Experience

How Microsoft Dynamics Fits In

With Microsoft Dynamics 365, businesses in the chemical industry can provide their customers with an experience that’s more efficient and effective. A robust suite of digital tools means companies can manage inventory and track shipments, and create invoices and sales orders. In addition, the software helps businesses track customer complaints and allows them to address them quickly.

Customers are looking for solutions that empower end-to-end business process automation. But not all enterprises have the right solution in place – usually, it’s a much older system still being used today, often held together with bits of string and tape. As one chemical company’s Chief Information Officer explains, Businesses today need more than just transaction processing—operational excellence and collaboration across the enterprise, whether in manufacturing or financial management. For many small and medium-sized businesses, Microsoft Dynamics may be the answer they’re looking for.

Maintaining control over processes has never been easier with Dynamics 365, which allows users to manage every stage of production from R&D through customer service, seamlessly and efficiently. With such an extensive feature set, enterprises of all sizes find it easy to customize the application according to their needs.

No matter what your business needs may be or how complex your operations are, Microsoft Dynamics 365 Financial & Operations provides you with everything you need to succeed!

Next Steps

To order to create the best user experience for your customers, one of the first steps is finding the right partner to help implement Microsoft Dynamics 365 Finance & Operations. The right partner will deeply understand your industry and how to implement best and utilize this solution to improve your customer’s experience. They’ll also be able to help you customize the software to fit your specific needs.

For example, suppose you’re a manufacturer or distributor in the chemical industry. In that case, a partner can help you set up products to be compatible with your company’s inventory system and make changes to reporting that reflect your business practices. They can also help with customizing processes or reports that specifically cater to your customers’ needs.

When selecting an IT consultant or business partner to work with on implementing your new ERP, it’s essential to consider their depth of knowledge about this industry and their ability to work closely with you and modify the software to fit your specific needs better. With the right partner, the process becomes easy to follow:

  • Evaluate your business needs and understand how a new ERP can help you reach your goals.
  • Choose an experienced partner who understands Microsoft Dynamics 365 and can help you get the most out of your investment.
  • Train your employees in the new system, so they can hit the ground running and provide a better experience for your customers.
  • Go live with Microsoft Dynamics 365 F&O and start reaping the benefits of a more efficient and user-friendly chemical business.
  • Monitor your progress and ensure you’re getting a return on your investment by seeing an improvement in customer satisfaction levels.

Are you ready to enhance your operations? Schedule a call today to get started.

Managing Chemical Compliance With an ERP
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Managing Chemical Compliance With an ERP System
Managing Chemical Compliance With an ERP System 700 500 Xcelpros Team

At a Glance

  • $700,000: A proposed increase to the maximum Occupational Health and Safety (OSHA) penalty for willful or repeat safety code violations.
  • $50,000: OSHA’s proposed hike in minimum penalties for these same willful acts.
  • $25,000: California’s additional safety violation penalties that are added to the federal fees.
  • $15,000: California’s maximum daily penalties for failing to fix these same issues.

Introduction

When used effectively, modern enterprise resource planning software (ERP) can help companies in several ways when it comes to chemical regulations:

  • Financial components of a chemical firm’s regulatory compliance solution.
  • Occupational Health and Safety Administration (OSHA) regulations.
  • Gathering, storing and managing material safety data sheets.
  • Gathering information from far-flung sources to create effective reports able to meet government criteria.

One study cited a multi-national corporation’s subsidiary using an ERP to comply with the Sarbanes-Oxley Act of 2002 (SOX).

“The findings demonstrate how managers can use an ERP to develop effective internal controls for the most common material weaknesses reported under SOX, thus providing insights into the crucial role of IT as a facilitator of control and reporting processes, and, more specifically, into the role, use and purpose of ERPs in relation to regulatory compliance,” according to the University of Greenwich.

Key points related to the chemical industry noted in this study include firms often failing to customize their ERPs for the specific requirements of the business, this applies specifically to chemical companies. Working with an ERP vendor experienced in the chemical industry helps ensure software works exactly as the company needs it rather than just installing an out of the box solution.

Unified systems like ERPs can help identify and evaluate hazardous substances. Manufacturers are then informed of the risk levels regarding the use and distribution of their chemical products. Identifying these hazardous substances early also allows manufacturers to act proactively, resulting in better safety.

Identifying Hazardous Materials With an ERP

Today, U.S. government regulations require the identification and labeling of hazardous materials. Modern ERP solutions can help create and manage safety data sheets (SDSs) along with any Globally Harmonized System (GHS) labels as required by the Occupational Health and Safety Administration (OSHA).

Each safety data sheet has 16 sections, 12 of which OSHA requires. These include:

  1. 1.Identification such as common names for the substance, recommended use of the chemical and restrictions on its use
  2. 2.Hazard(s) Identification such as signal words, pictograms and hazard statements
  3. 3.Composition and Information on Ingredients such as each substance’s Chemical Abstracts Service number
  4. 4.First-Aid Measures such as the most important symptoms
  5. 5.Fire-Fighting Measures such as the type of fire-fighting
  6. 6.Accidental Release Measures including emergency procedure and methods of containment
  7. 7.Handling and Storage including safe handling precautions
  8. 8.Exposure Controls/Personal Protection including OSHA Permissible Exposure Limits (PELs)
  9. 9.Physical and Chemical Properties such as the chemical’s odor, flash point and flammability
  10. 10.Stability and Reactivity including if the chemical is stable under normal temperatures
  11. 11.Toxicological Information including how the toxins are brought into a human body such as through inhalation or eye and skin contact
  12. 12.Other information including when the SDS was prepared or last updated

OSHA also suggests-but does not require-data on ecological impact, including:

  • The disposal of hazardous materials
  • The transporting of hazardous materials
  • Any other regulatory requirements, as needed

Book a consultation on how to manage chemical compliance with an ERP system

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An ERP manages regulatory compliance by comparing your existing SDSs to OSHA’s requirements. Once your safety sheets are updated to meet federal requirements, they are stored in a central repository for reuse. A single update ensures that all SDS are accurate when the same ingredient is used in several products.

That information can then be “chunked” and converted into the GHS labels. One method where ERPs excel is their ability to generate QR codes for labels automatically. Simply scanning the label with a cellphone can provide internet links to complete safety sheets.

When every second counts, such as in exposure to potentially hazardous chemical, workers don’t have hours to pour through filing cabinets looking for the right SDS. They might have a few seconds to scan a label, tap a link and then know what type of first aid to administer.

Other Safety Features in ERPs

Because ERPs access information from multiple sources, one way they help promote safety is by limiting access. When data access cards or passwords are linked to an ERP, they can help prevent unauthorized—and untrained—workers from accessing dangerous or harmful chemicals.

Your ERP can be used to restrict access to based on the individual’s role. This helps protect their help while also ensuring your data remains safe from prying eyes.

Using your ERP to monitor safety also lets you identify areas where more training is required. It can be tied to a learning management system (LMS). This in turn reduces the risk of workers with expired certifications or lack of skills.

Your SDS chemical management can help pinpoint at-risk employee groups, document recurring injuries, map frequent injury locations and then help you create a plan to correct them.

For example, many production employees are required to earn OSHA 10 certification. This ensures they have at least 10 hours of safety instruction.

OSHA 30 certification goes into greater depth when it comes to safety. Among its enhanced requirements are the following:

  • Hazard communication, which is useful in preparing and updating safety sheets
  • Materials handling, such as hazardous chemicals
  • Personal protective equipment (PPE)

Your ERP can identify which employees have active OSHA 30 certification, which have expired certificates and who lacks it. By denying access to unqualified workers, you reduce their risk of injury while also dropping your chances of being tagged for an OSHA violation.

Under a current proposal, OSHA provisions for willful and repeat violations could increase from a minimum of $5,000 to $50,000 per violation. The maximum fines would also go up ten fold to $700,000 per violation, Cal-OSHA states. These fines can change based on your location. For example, if a violation occurs in California, you can expect to pay as much as $25,000 for serious violations. These infractions can accrue daily penalties up to $15,000 for failing to solve the hazard issue.

ERPs and HazCom

OSHA’s Hazard Communication standard known as HazCom includes a checklist of 10 requirements.

These include the need to perform the following:

  • Train employees on the hazardous chemicals in the workplace
  • Instruct workers on how to recognize exposure to hazardous chemicals
  • Provide training on container label elements
  • Offer instruction on Safety Data Sheet (SDS) format and content
  • Explain to employees how to access SDSs
  • Update SDSs when new versions become available
  • Update the written HazCom program as needed
  • Explain to employees how to obtain a copy of the written HazCom program
  • Train employees on any in-house labeling system used
  • Make sure all container labels in the workplace are compliant

An ERP can ensure that data on any single chemical or hazardous material is thoroughly covered in your documentation. For example, each SDS can be linked to related labels and training materials. An update to the SDS ensures everything that flows from it is also current. That means your employees are safer as is anyone else who handles your products.

The Bottom Line

While some executives think of ERP’s, they consider ways to improve efficiency. The reality, however, is that ERPs can also be used to make workplaces safer for everyone. This is primarily achieved with constantly updated processes and carefully labelling and managing any goods and raw materials.

Creating and updating an SDS in your ERP, for example, allows you to link all critical information about a product including labels, handling guidelines, storage requirements, training materials, and more. Increasing the safety and handling for everything you store and work with not only reduces the costs of injuries and by ensuring OSHA compliance, but you also minimize the potential for fines and infractions, which further helps to increase profits.

Also read: 3 Ways to Manage Disruption in the Chemical Industry

Innovation is Helping Chemical Companies Grow Into Giants
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Innovation is Helping Chemical Companies Grow Into Giants
Innovation is Helping Chemical Companies Grow Into Giants 700 500 Xcelpros Team

Introduction

Innovation in business often means introducing something new. It’s common for companies to introduce new ways of looking at how they operate. They take a new and different view of their supply chain. They gather ideas from employees on ways to boost sales. Benefits of innovation include:

  • Boosting productivity
  • Reducing costs
  • Being more competitive
  • Boosting brand value
  • Establishing new partners and business relationships
  • Improving profitability

There are many ways to help companies grow. Using newer digital technology is one method.

Companies that fail to innovate, preferring to use methods that were successful 10 or 20 years ago, can quickly fall behind those seeking to enhance their business. Companies that fail to innovate can expect to:

  • Lose market share
  • Reduce productivity
  • Become less efficient
  • See key staff members leave
  • Watch as margins and profits shrink

From a marketing perspective, the expression “building a better mousetrap” applies to them. This failure to innovate is not a good idea when your customers want medicines that will help them live longer, healthier, happier lives.

By the Numbers

Capital spending in the chemical industry is expected to increase in 2021 and 2022 after a sharp drop in 2020.

  • -17.6%: 2020 chemical industry capital spending
  • +11.9%: 2021 chemical industry spending is expected to reach $30.6 billion this year
  • +3.7%: 2022’s estimated increased in chemical industry capital spending

Is your company willing to invest in its growth?

Figure: 1Chemical Industry Growth Projection

Chemical Industry Growth Projection

Using Technology for Growth

Combining big data with artificial intelligence, such as that built into Microsoft Dynamics 365, helps turn digital innovation in the chemical industry into growth.

Growth happens faster when a company has data from reliable automatic sensors, not manually prepared spreadsheets. After analyzing the data for specific information, company leaders can create and adapt growth strategies.

A 2018 Connected Small Businesses in the United States report by Deloitte found, “relative to businesses that have low levels of digital engagement, digitally advanced small businesses realized significant benefits.” These benefits include:

  • Generating twice as much revenue per employee
  • Up to four times growth over previous year revenue
  • Being nearly three times as likely to create new jobs over the previous year with an employment growth rate more than six times as high
  • Being three times more like to have exported products in the past year

“Despite these potential gains, 80 percent of US small businesses aren’t taking full advantage of digital tools such as data analytics and more sophisticated online tools,” Deloitte stated.

Innovation is a Process

Another term for innovation is change. Effective change—effective innovation—requires planning. Look at the marketplace: What are the giant companies in your market doing? How did they grow? What innovations did they take?

Look within your company and identify opportunities for innovation. Consider using the Industrial Internet of Things (IIoT) to connect laboratory and production devices.

Analyze the competition and then compare what the top companies are doing to how yours operates. What are some of the market trends—using enterprise resource planning (ERP) software is one—that can help your company get ahead of the competition?

Evaluate the business climate. In the chemical industry, this means studying regulations such as those from the U.S. Food and Drug Administration (FDA).

Look at your customers and end consumers. Talk to them. Ask them what kinds of products they want. What does your research forecast will be in demand in five years? In ten years? Is your company positioned to supply those innovative medicines now? Will it be able to meet expected demands when they occur?

Note: See this infographic for a brief look at Organizational Change Management as it applies to upgrading to a modern ERP.

Digital tools are key elements in the new technologies fueling chemical industry growth.

Get a consultation to know how innovation can help your chemical company grow.

Schedule Call

Digital Tools for Innovation

Five key tools are sparking digital innovation in the chemical industry:

  1. 1.The Industrial Internet of Things (IIoT)
  2. 2.Big Data Analytics
  3. 3.Mobile Solutions
  4. 4.Cloud Storage
  5. 5.Cybersecurity

Sensors that observe, record and transmit data in real time are available. Using them lets chemical industry leaders understand how their machines and staff are performing. When those sensors are connected to the internal network and then to the Internet, that data becomes available to anyone, anywhere at any time. For example, a production run in China can be monitored by workers in Chicago.

IIoT sensors create a lot of data leading to the term “big data.” Having a lot of numbers showing production runs and quality levels does not help a chemical or pharmaceutical company grow. Analyzing the data to find nuggets of useful information shows where improvements can occur. Having computer software that examines the data and tells executives what it means can help them spot trends that, when corrected, lead to more efficient operations.

Accessing that data and those trends is one thing when it happens in an office. Getting an alert on the production shop floor, though, can save an expensive batch of product. For example, being notified that an ingredient is running low or a machine will overheat can let workers using mobile devices fix these issues. They can resolve these issues before they become expensive problems.

Even though production floor employees are monitoring machines, their IIoT sensors are still producing large quantities of data. The sheer data volume may easily overwhelm a local computer network. Having a cloud computing connection eliminates that storage issue.

Using banks of interconnected servers, cloud service providers store data securely. Cloud service providers can transfer data from one warehouse-sized server farm to another storage location. They have the highly-trained staff and equipment needed to protect your data from hackers.

One security method not used by many small and medium businesses is Microsoft’s Azure industrial platform. It has its own in-depth methods of keeping your secrets safe from the competition.

Using these technological innovations effectively requires a platform and a team who understands what they want: an ERP installed by an experienced company.

Use a Systems Integrator with industry and transformation experience

A Microsoft Direct Cloud Solutions Provider (CSP), Systems Integrator (SI) and Microsoft Certified Partner for Microsoft System Dynamics. Dynamics 365 with ERP implementation skills, and an ERP that integrates, is scalable and provides accurate insights, together can move a company in the right direction.

Using Microsoft Dynamics 365 products such as Finance and Supply Chain or Business Central, The right technology can help turn SMBs into giants. Or an industry solution, in particular, is aimed at the chemical industry such as Integrated Chemical Management. ICM and other scalable Microsoft products let firms take advantage of digital products.

Having the right subject matter experts who are adept at helping companies transition from legacy ERPs and silo-based systems also makes the transformation simpler. At the end of the day a modern digital platform helps move your workforce into a productive and efficient environment.

Summary

Small companies wanting to grow into giants should waste no time taking advantage of modern technology. Recent innovations such as IIoT, AI, cloud computing and updated ERPs let forward-thinking companies move seamlessly into the future. These organizations are able to move ahead while competitors using siloed systems are left in the dust.

Xcelpros specializes in deploying these on-premise, cloud and mobility solutions. For more information contact us!

Overview of Chemical Distribution in Microsoft Dynamics 365
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An Overview of Chemical Distribution in Microsoft Dynamics 365
An Overview of Chemical Distribution in Microsoft Dynamics 365 700 500 Xcelpros Team

At a Glance

Chemical distribution companies have several requirements when facing challenges in today’s business world. They include:

  • Needing an overview of end-to-end supply chain processes including solutions to increase operational efficiencies
  • Getting an overview of planning and inventory management for bulk chemicals and packaged chemicals
  • Understanding best practice depictions of typical chemical distribution processes

By the Numbers

Chemical distribution companies today are focusing their efforts on optimizing supply chains, warehouse and floor operations. They function as a supply chain partner, anticipating customer needs and helping them stay ahead of their competition.

  • The chemical distribution industry is on a massive growth curve. Grand View Research states the industry’s value was $247.1 billion in 2020.
  • The expected compound annual growth rate from 2020 -2028 is 4.0 percent.
  • There’s a growing need to set your processes straight and streamline your supply chain with sufficient controls in place to keep up with the pace of the market.

4 Key Processes

There are 4 key processes that matter to a chemical distribution company:

  1. 1.Order-to-Cash: The ability to take a customer order efficiently and deliver it by the customer’s deadline.
  2. 2.Procure-to-Pay: The ability to manage purchase orders and receiving departments efficiently, optimizing spending on procurement to avoid high capital inventory spending.
  3. 3.Inventory Management: Inventory Management: Maintaining optimal inventory levels without excessive capital spending.
  4. 4.Break Bulk Operations: Break Bulk Operations: Breaking down bulk shipments such as tankers and large shipments of individual products into smaller pack sizes.

User Story: Warehouse Chaos

Survival in a highly competitive world requires chemical distribution companies to efficiently organize and design their warehouses. Internal routes must be optimized to let manned and robotic pickers grab inventory for break bulking, repacking or outbound shipments. Inventory storage needs to be precisely planned, especially while handling hazardous chemicals.

Too familiar is the chemical customer with multiple warehouses. They store bulk and packaged chemicals stocked in rows, racks and bins spread across multiple aisles. Some of these chemicals require temperature controls. Many have hazardous condition restrictions.

It’s common for companies to focus on meeting the basics and storing things wherever they fit. No warehouses are organized, making it difficult to track where incoming product was stored and gathering items to fill customer orders.

Making matters worse are poor operational practices. For example a high volume order involved taking some contents from a 55 gallon bulk chemical drum. Operators move the drum to Staging, remove what order the order required and then leave the drum at staging. No effort is made to record the location or remaining quantity. At best, inventory numbers are manually written on a tag attached to the drum, not entered into the computer system.

This method creates many inefficiencies later in the production process. They include:

  1. 1. Inefficient use of space. The Staging area was already small. It was made worse by leaving drums and totes for break-bulk orders, causing Staging to grow continually.
  2. 2. Inefficient use of time. The system showed the drums were at their primary inventory location. Operators unable to find items there had to manually check each tag. Some operators eventually knew to look for inventory in the primary or staging locations. Other workers wasted time looking for the items.
  3. 3. No inventory tracking method.
  4. 4. Inaccurate inventory counts. Inventories were constantly adjusted for missing or untraceable inventory. Lack of accurate counts meant ordering more supplies to fulfill customer demands.
  5. 5. Over ordering meant not having enough space to store the extra bulk material.

The chaos caused by not returning bulk items to their designated location can make conducting a physical count a Herculean task. With missing inventory placed at unplanned staging locations, it added to the warehouse imbalances.

An Ideal Journey

Organizing any operation-chemical manufacturing or distribution—starts with analyzing its operations, growth initiatives and business goals for the next five years.

Ways to make warehouses more efficient include:

  • Review existing warehouse storage and design in terms of locations and inventory groupings.
  • Using federal, state and local safety guidelines based on chemical properties, create procedures stating where chemicals must be stored.
  • Number locations by aisle, row, rack and bins.
  • Place the fasting moving items close to the shipping area.
  • When receiving bulk containers, label them with a scannable barcode.
  • Label the put away locations and staging locations so checkers can quickly and easily count quantities in a specific location.
  • Provide workers with mobile devices that let them scan barcodes providing real time work details and order status updates.

Processes and Procedures in the Chemical Industry

Chemical manufacturing and distribution companies have many similarities in terms of receiving, inventory, planning, shipping and warehouse management.

The basic processes within the chemical distribution industry are centered more around warehouse management, inventory, planning, repacking, light manufacturing, shipping and receiving. Chemical manufacturing adds route operations, resources and work in progress (WIP) testing.

Inventory management processes in a chemical distribution company start with Purchasing and Receiving.

Purchased products are bulk or packaged chemicals, packaging items, labels and other supplies. These products normally come from an approved primary vendor or supplier.

Reporting and analytics shows two statistics that determine the effectiveness of the primary supplier:

  1. 1. The buyer’s decision to switch to an alternate vendor for a specific purchase.
  2. 2. The number of times this change occurs.

Vendor ratings showing the percentage of purchases delivered on time and in full is also important to buyers.

Figure: 1High-level Flow of Purchase Order-to-receive Process

High level flow of purchase to receive process

The next major process is inventory and warehouse management.

The most efficient warehouses are organized by aisle, row, rack, bin, lot or batch. They have pallet ID tags and box IDs. Materials managers seeking better organization find that using a license plate number for rows, racks, bins and pallets works best. Using scannable barcodes lets users with mobile devices easily retrieve inventory.

Using this method reduces lost inventory, incorrect counts and locations. It also makes tracking individual products faster and easier such as when repacking items.

Labeling all warehouse locations is also critical when streamlining operations. Two common methods are Serpentine and Standard. Most companies follow a four location naming standard with aisle, rack, row and bin.

Figure: 2Layout of a Typical Warehouse in a Chemical Distribution Company

Layout of a typical warehouse in a chemical distribution company

The third main process used by chemical distribution companies is capacity planning or master planning.

These companies should plan to break bulk and repack, changing labels at each stage. Master plans help track human resources, label printers, packaging machines and other devices.

Typical operations such as repackaging or breaking bulk require those stations and their operators. These functions cannot occur when either is unavailable.

Distribution companies seeing fast moving or express items require planning that is more agile. Agility requires operating on a net change mode instead of completely recreating set-ups every hour. Having that flexibility helps planners make key decisions and set priorities that optimize the work effort.

Figure: 3High-level view of Master Plan in Microsoft Dynamics 365

High level view of master plan in Microsoft dynamics 365

The fourth major process is production and packaging.

Production in chemical distribution companies uses light manufacturing operations such as repacking. A bulk container is opened and quantities required to fill an order are removed.

Typical work orders include operations such as filling, packing, labor, quality and Labeling. The yield provides the quantities and costs to produce each container.

Labeling is the fifth major process.

Labeling is an additional operation on the shop-floor. Including an integrated label management solution included in normal workflows ensures merchandise is properly tracked.

Figure: 4High-level Repack Process in Chemical Distribution

High-level Repack Process in Chemical Distribution

The last two steps are order management followed by billing.

Once inventory is available, warehouse pickers should select the fastest route that lets them gather all items to fill that order. Items are then packaged, labeled and wrapped. Typically, they include certificates of analysis, safety data sheets, a packing slip and a bill of lading. Smaller orders often include a commercial shipping service tracking number.

As soon as everything is packed and shipped, the final step is sending the customer an accurate bill.

Figure: 5High-level Customer Sales Order to Shipment in Chemical Distribution

High level customer sales order to shipment in chemical distribution

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What a Distribution Company Looks Like in Microsoft Dynamics 365

Below is a quick view of what a chemical distribution company would look like in Microsoft Dynamics 365 assuming all required raw materials are available.

01.Products

This information is maintained within the Product Information Management (PIM) module. For a chemical distribution company, it is the heart of supply chain and manufacturing.

At a high level, Product falls into these categories:

Item Group Type Defination
Item – RM Raw Material Ingredient Purchased
Item – INT Intermediate Produced as Part of the Formulation
SKU Finished Product Containerized Finished Product through a Formula
Label Package – Raw Material Labelled Raw Material
KIT Finished Product Packaged into 1 case with same SKUS
BOX Package – Raw Material Package Purchased
Container (Tote, Drum, Etc.) Package – Raw Material Package Purchased
Package (Cases, Kits, Etc.) Package – Raw Material Package Purchased
Services Services  
Supplies Expensed Packaging Material, Lab Supplies, Office Supplies, Etc.  

In addition, companies should define products requiring tracking by batch, location and license plate. These items may also require coverage settings, lead times and other attributes such as chemical properties and label elements such as hazard statements, pictograms and hazard symbols.

02.On-Hand Inventory

Having a detailed view of inventory by batch, serial number, site, warehouse, location and license plate number for each product provides an inventory snapshot. The data applies to multiple roles such as planners, buyers, customer service representatives and materials managers.

D365 can also produce an inventory value report. It shows inventory quantity and total value plus the physical and financial cost by unit. Having a view into on-hand inventory value for both inventory and WIP can then be reconciled back to General Ledger.

In Dynamics 365, there are many different ways of slicing and dicing inventory. One screen is an on-hand list view displaying all available inventory based on dimensions. Selecting the dimension displays the site, warehouse, location, batch and serial number.

On-Hand Inventory step 1

On-Hand Inventory step 2

03.Sales Orders

D365 is versatile in terms of orders for chemical products, kits or cases. In Microsoft D365, customers can have products shipped to them or directly to their customer.

This process starts when customer service creates a sales order with the customer’s PO number. They add the products being shipped to the customer. The order can include specific customer instructions and notes. Notes and attachments can be set for printing on specific documents such as the packing slip or bill of lading.

For distribution, Microsoft Dynamics provides a Distributed Order Management (DOM) indicator. It provides a complete picture of inventory across the warehouse and ensures the order processes correctly.

Sales Orders Step 1

Sales Orders Step 2

Sales Orders Step 3

04.Master Planning

Depending on how the packaged items are set up for planning (e.g., min/max, requirement or period) with lead times and calendar setup, companies can run a master plan in a regeneration mode. This mode displays all supply, demand, planned supply and forecasted demand or net changes since the last full master resource planning run.

Typically, companies run master planning for all items or items under a certain coverage group such as fast moving items.

Master Planning

05.Production of Kits and Cases

Microsoft Dynamics 365 has extensive functionality supporting all chemical distribution company production operations. The operations can be streamlined for simplicity or conform to current methods.

For example, setting a production order in D365 can include finished goods produced, work planned, tracking operations, routes, resource cost and job scheduling.

Different views are set based on security roles and privileges. These allow different sets of users to view the production order, picklists, route cards or job cards.

Production of Kits and Cases step 1

Production of Kits and Cases step 2

Production of Kits and Cases step 3

Companies can also use Gantt charts to visually see planning and job scheduling. D365 has a powerful visual planning and scheduling tool that comes handy when scheduling tasks for all sales orders planned during a day, week or a month.

Production of Kits and Cases step 4

Bill Of Materials(BOM) journals are used in the production process to add finished goods into inventory and to reduce the inventory components within the formula or BOM.

These journals help reduce the process time instead of using a full production order.

A BOM journal cannot perform functions like tracking jobs and operations. It also is not part of visual planning.

Production of Kits and Cases step 5

Note: Xcelpros earlier blog post on “Operational Challenges in a Chemical Company: Key Solutions” explains production and operations in more detail.

06.Shipments

International shipments add export documentation not required for domestic deliveries. Both shipment types use a common document set generated by D365.

Using D365’s advanced warehouse management functions, outbound work and a shipment wave is created to pick products and put-aways for packaging.

D365 enhanced with the power of Integrated Chemical Management (iCM) prints a documentation package including:

  • Warehouse Work: Displays sales order number, work number, product batch or lot number, license plate information and put-away location in barcode formats. Work is processed using a barcode device.
  • Packing Slip: Displays the sales order number, customer PO number, delivery method, ship date, product to be delivered, quantity delivered, unit of measure, batch number or lot number delivered, ship to address, ship from address, back-order quantity and other related information.
  • Bill of Lading: Displays ship to address, sales order number, hazard information, pallet information, number of boxes, master bill of lading number and related materials.
  • Certificate of Analysis (C of A): Displays product, company logos for private label customers; test specifications; test results including visual, fraction, integer tests; approver information; expiration dates or best before dates; and test dates.
  • Safety Data Sheets (SDS): Displays product label information, pictograms, hazard statements, warning statements, transportation and U.S. Department of Transportation required information by country and language, CAS number information, etc.
  • Shipping Labels: Displays company logo, ship to address and product information.

Shipments step 1

Shipments step 2

07.Invoicing

After shipments are done, Microsoft Dynamics 365 gives companies the ability to create invoices in a batch mode or mass select shipments for invoicing. The system also lets them print or email a specific customer email address.

Invoicing step 1

Invoicing step 2

Invoicing step 3

Key Takeaways

Chemical distribution company executives should compare what their firm looks like now and how it might look after migrating to Dynamics 365.

D365 allows companies to streamline processes with a robust, simple, easy to understand and powerful system. Its ability to integrate with other Microsoft applications allows your company to fully integrate and enhance efficiencies.

Power tools such as master planning and production Gantt charts provide the ability to plan and schedule your production operations.

Microsoft Dynamics 365 helps boost your business efficiencies through the “one Microsoft ecosystem” by working seamlessly with products such as Office 365.

Microsoft Dynamics 365 can address most chemical distribution company requirements without modification.

The Differentiator - one Microsoft ecosystem

What does your company look like in Microsoft Dynamics 365? Talk to us to take a test drive.

References: Why Specialty Chemical Distributors Need to Raise Their Game

Key Solutions to Chemical Company Operational Challenges
  • Xcelpros Team
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Operational Challenges in a Chemical Company: Key Solutions
Operational Challenges in a Chemical Company: Key Solutions 700 500 Xcelpros Team

At a Glance

Recovery by end-use markets and export consumers are expected to boost the U.S. Chemical industry in 2021 and 2022. The American Chemistry Council (ACC) predictions include:

  • A global gross domestic product (GDP) increase of 6.1% in 2021 and 4.4% in 2022
  • A rise in the U.S. GDP of 6.4% in 2021 and 4.3% in 2022 after a 3.5% fall in 2020
  • U.S chemical volumes will increase by 1.4% in 2021 and 3.2% in 2022
  • Chemical shipments will increase 8.1% in 2021 and 8.2% in 2022 after a 13.5% decrease in 2020
  • Capital spending will increase 11.9% to $30.6 billion in 2021 and 3.1% in 2022 after falling 17.6% in 2020
  • Basic chemical production will rise 0.5% in 2021 and 3.4% in 2022
  • Specialty chemicals will expand by 3.8% in 2021 and 4.1% in 2022 after falling 10.8% in 2020
  • Chemical exports will rise 5.8% in 2021 and 13.2% in 2022 after falling 7.6% in 2020
  • U.S. Chemical imports will rise 1.7% in 2021 and 13.7% in 2022 after falling 5.1% in 2020

Also affecting U.S. chemical companies are tariffs and regulations.

  • U.S. tariffs on Chinese goods were averaging 19.3% on a trade-weighted basis in early 2021, up dramatically from the 3.8% rate before the U.S. China trade war, CNBC states
  • China currently has a 20.7% tariff on U.S. goods
  • Failure to meet global harmonized system (GHS) labelling requirements can generate fines of $12,600 per violation and up to $127,000 per violation for the most serious issues

Making Sense of the Numbers

Higher production translates to higher capacity requiring production managers to equip themselves with the technology needed to adapt to the changing market.

A sophisticated enterprise resource planning (ERP) business application helps plant production managers keep up with rapidly changing challenges. ERP software also lets them track key metrics such as inventory turnover and manufacturing throughput to optimize cost of production.

Production in modern-day chemical companies involves unforeseen challenges. These range from obtaining raw materials to ensuring proper quality, fluctuating demand, tariffs, dwindling margins, capacity and resource planning. It also requires keeping formulas secure from data thieves.

Regulatory compliance plus international tariffs add additional stress to profit margins and the supply chain.

Tariffs require leveraging resources more efficiently to achieve better margins while promoting trade. One effect is forcing companies to explore near-shore vendors that can supply essential materials at a reasonable price.

One way to become more efficient is by using modern technology. ERP solutions such as Microsoft Dynamics 365 (D365) Business Central have tools that let production managers take more control of their production floor.

For example, production scheduling is complex, requiring an understanding and balancing of specific elements such as:

  • Resources Planning
  • Continuous production
  • Optimal asset planning
  • Fluctuating demand
  • Tighter lead time
  • Procurement delays
  • Outages
  • Quality check
  • Recalls and regulation requirement

Five Key Concerns

Five key concerns for chemical production plant managers are:

  1. 1.Fluctuating product demands
  2. 2.Volatility in raw materials supplies
  3. 3.Complying with government regulations
  4. 4.Ensuring consistent quality
  5. 5.Resource and production throughput

Fluctuating Customer Demands

Capital spending will increase 11.9% to $30.6 billion in 2021 and rise another 3.1% in 2022 after falling 17.6% in 2020, American Chemistry Council states.

Basic chemical production will rise 0.5% in 2021 and 3.4% in 2022. Specialty chemicals will expand by 3.8% in 2021 and 4.1% in 2022 after falling 10.8% in 2020.

“Following the worst downturn since the 1930s, the world economy is on the rebound,” Kevin Swift, chief economist at ACC is quoted as saying. “We expect recovery to proceed apace despite multiple risks and uncertainties. These include supply chain constraints and increased demand as economies reopen; trade tensions; weather events, cybersecurity and similar shocks; inflation; financial volatility and public and private sector debt.”

While these developments position chemical companies in a bright spot compared to 2020, not all is bullish. As demand for chemical products increases, so does competition and the demand for innovative products. Production Managers now handle unprecedented customer demands causing tight deadlines and highly-stressed resources.

Production Managers need an air-tight strategy to meet sporadic demands and ensure business continuity. Products such as D365 Business Central are equipped to handle such strategies, ensure complete visibility, provide control over the entire supply chain and support informed decision-making.

Some of the critical elements in production planning and control include Master Planning, Production Scheduling and Production Control as shown below.

Production management

Today we live in an on-demand economy. Production managers face rapid changes and increased sales order quantities from customers, adding pressure on Production.

Example #1: A Chemical Plant

Using a chemical plant as an example, say Customer A doubles their order quantity from 5,000 to 10,000 pounds.

To meet this demand, the production manager must respond quickly by evaluating available resources and scale batch sizes in the reactor.

Companies using a modern, well-designed order management system can update the sales order quantity and set the order priority to high.

Order priority can be designed to consider critical demand, customer categories and customer relationships. Changing the order priority signals the materials requirement planning (MRP) system. It issues an updated production order to reflect the larger batch size.

After seeing the revised production order, the production supervisor can review the production schedule and adjust resources to meet the customer’s new demand.

Similar situations are common at chemical companies. Plant managers recognize the need for an integrated ERP system that seamlessly manages communication between different business areas.

Using Gantt Charts

The production control module within Microsoft Dynamics 365 Supply Chain Management creates powerful Gantt Charts. These charts visually represent production flows, map resources, check on material availability and inventories plus see which machines are available. This information helps managers control and optimize the production plan and make informed decisions.

Gantt charts within Dynamics 365 Finance provide a uniform view of schedule activities within a defined time interval. Managers can use these charts to:

  1. 1.Schedule jobs from production orders. Managers and schedulers can modify production plans by dragging and dropping or using an online menu.
  2. 2.Schedule jobs from planned production orders. Scheduling starts after the production plan converts to an actual order.
  3. 3.See hourly schedules of all jobs. A calendar that has active working times is a prerequisite for all production activities. Seeing the real-time status of every job lets managers know the status of “jobs that have started” and “jobs that have ended.”
  4. 4.View production orders organized by order and resources. Production managers get a real-time view of a production schedule displaying scheduled production orders, material availability and resource capacity. Managers can change schedules when required.

Order view

View of the resources available or engaged.–

Resource view

Volatility in raw materials supplies

Chemical manufacturers use crude oil and natural gas byproducts as the base for their products, accounting for about 50% of the production cost. Oil and gas are extremely volatile commodities with pricing subject to many macroeconomic factors beyond the chemical companies’ control. Volatility causes include geopolitical unrest, OPEC member nation policies, sanctions, currency fluctuation, etc.

Keeping track of raw material cost and availability—especially with the continuing pandemic—is another important production manager function. In the “old days,” managers used a series of Microsoft Excel spreadsheets to manually keep track of key metrics such as inventory turnover and manufacturing throughput. Modern ERPs track data real-time offering benefits to help minimize the effect of raw material price fluctuations:

  • Transparently tracking actual costs while accounting for cost of goods sold, revenue, margins, cash flow, etc.
  • Adjusting for currency fluctuations when dealing internationally. Managers can obtain materials from the lowest cost supplier.
  • Analyzing order volumes and budgeting for cost. Managers can get better pricing and plan production more efficiently.

Complying with government regulations

Any company working with hazardous chemicals is regulated at the federal and state levels. Many also face scrutiny from local officials.

Common requirements are labels meeting GHS standards. Software able to generate the right labels for each product coupled to label printers on the production floor are essential in meeting regulatory requirements.

In the US, companies dealing with hazardous chemicals including manufacturers, distributors, transporters and end-users must adhere to the Globally Harmonized System (GHS) label compliance requirements. Noncompliance can cost $12,600 per violation, while the more serious ones could range up to $127,000, not counting damage to a company’s reputation.

A labeling solution that includes chemical properties, characteristics, batch and lot number, test specifications and other required information is crucial.

Hazardous chemicals need to be distinctly identified to avoid disasters such as when reactive chemicals come in close contact. Labeling applications, such as Integrated Chemical Management (iCM) in D365, can address these issues in Production and elsewhere.

iCM not only provides labels meeting GHS standards, it also includes Safety Data Sheet authoring and management. It reduces human error when printing labels during a production run by knowing which product labels to print during the process.

Production order

Ensuring Consistent Quality

The effects of quality checks and recalls can have a long-lasting impact on a company’s reputation. Creating the required documentation for processes such as production, use of raw materials, packaging and others helps track each product from its source to its final destination. Accurate documentation improves visibility in the supply chain and enhances traceability in the event of an inquiry, recall or audit.

Chemicals are used as a base in multiple industries such as automotive, paints, food and beverage, appliance, electronics, packaging, textiles, cosmetics, toys, etc. The graph below shows recalls across major industries in 2016.

Production recall by Number of insurance claims 2016

A closer look reveals the reasons for such recalls. Top reasons for medical device recalls in the U.S. as of the second quarter, 2019 according to Statista were:

  • Software issues (49)
  • Mislabeling (32)
  • Quality Issues (31)
  • Sterility (18)

Common reasons for drug recalls according to WebMD are:

  • Health hazards
  • Mislabeling or poor packaging
  • Poor manufacturing quality
  • Packaging and product misalignment

Microsoft Dynamics 365 has the ability to track and trace products at a batch or lot level from the source to the end user. This function helps:

  • Ensure regulatory compliance
  • Track and trace batches and lots to identify damaged or contaminated products
  • Visualize the journey of the product from the manufacturing site to its end-users
  • Trace the root cause of an issue and treat it accordingly

Resource and Production Throughput

Managing the production shop floor requires diligent planning of human capital and other interdependent machine resources such as blenders, reactors, mixers, hot ovens, separators, packaging, tanks, etc.

Production planning and scheduling can get overwhelming depending on the number of resources and shifts. Production managers are constantly under pressure to increase production volume using less resources. Recurrent variation in batches to meet higher volume demand and continuous production often results in inconsistent batch quality.

Real-time data monitoring using measured and inferred values can increase production by as much as 4%. D365 uses measured and inferred values to track batch completion in real-time, reducing batch cycle time. It also is also used to achieve batch consistency. Using data collected over time to predict events that can disrupt the production cycle, production managers can reduce those delays, decreasing operating costs.

Being able to track and analyze real-time data also improves asset and resource effectiveness by up to 4%. Unscheduled downtime due to maintenance or breakdown isn’t new to manufacturing plants. Using predictive analytics, past asset performance can model scenarios that detect equipment health and prevent failures.

Key Takeaways

The US Chemical industry is still a volatile market, one that seems to be rebounding from the vagaries of Covid-19 one minute and then being hammered by political crises the next. Individual companies face growing competition to produce unique products, increase production, gain customer loyalty and comply with stringent regulations.

The life of a Production Manager in a chemical industry is stressful. Embracing modern technology will help them achieve company goals while also staying compliant with changing regulations.

Microsoft D365 offers easy-to-use visualization of data across all organizational departments including production, sales, compliance, marketing and others. It’s ability to seamlessly share data across multiple sites and locations enhances transparency and improves product and material tracking and tracing. The combined functions of each D365 application boost productivity and increase efficiency.

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