CHEMICAL

mistakes that slow the growth of a chemical manufacturing company
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Mistakes that slow the growth of a chemical company
Mistakes that slow the growth of a chemical company 700 500 Xcelpros Team

7 Quotes

Companies need to grow if they wish to flourish and prosper. There are many quotes already related to business growth you might have heard before, including:

  • “Conformity is the jailer of freedom and the enemy of growth,” President John F. Kennedy
  • When you stop growing, you start dying,” author William S. Burroughs
  • “Every problem is a gift —without problems we would not grow,” motivational speaker and author Anthony Robbins
  • “Out of your vulnerabilities will come your strength,” neurologist Sigmund Freud
  • “Strength and growth come only through continuous effort and struggle,” author Napoleon Hill
  • “The only way you are going to have success is to have lots of failures first,” Google co-founder Sergey Brin
  • “The journey of a thousand miles begins with a single step,” Chinese philosopher Lao Tzu

Introduction

What do you consider growth for your business? How this is measured is up to each individual organization. Data points that highlight company growth includes:

  • Sales
  • Revenue
  • Profits
  • Company Value
  • Number of customers
  • Number of Employees

The next question to ask is, “Are you growing in a way that is sustainable and lets you achieve all of your company’s goals?” As they grow, companies can make several mistakes that doom their opportunities for growth.

According to Growthink, the most common growth-related mistakes are:

  1. 1.Ignoring the Ansoff Matrix—also known as the Product/Market Expansion Grid—that details ways to increase sales.

Figure: 1Ansoff Matrix: Product-Market Expansion Grid

Ansoff Matrix: Product-Market Expansion Grid

  1. 2.Failing to conduct market research, such as a SWAT (strengths, weaknesses, opportunities and threats) assessment.
  2. 3.Developing weak financial models showing the impact of each growth opportunity.
  3. 4.Forgetting what worked in the past for your company.
  4. 5.Starting at the wrong place and lacking a clear vision of where you want to go.
  5. 6.Lacking focus, which can occur when a company lacks a clear growth plan.
  6. 7.Ignoring the human factor by not having the right people.

Chemical Industry Mistakes

The previous items apply to all companies wanting to grow, regardless of industry. The heavily regulated pharmaceutical and chemical industries face additional challenges when they want to grow.

According to Global Safety Management, these unique challenges include:

  1. 8.Ignoring jurisdictional regulations.
  2. 9.Costly errors from operations.
  3. 10.Failing to evolve into an intelligent enterprise.
  4. 11.Delivering products, not business outcomes.

Ignored regulations often result in hefty fines. For example, if your pharmaceutical company sells its products in Europe, and then decides to expand into the U.S., not following FDA labeling regulations is a major no-no. Violating Section 21 of the Federal Food Drug and Cosmetic Act (aka, title 21, section 331) mislabeling a prescription drug for interstate commerce is expensive. Penalties include prison sentences up to 10 years, fines of up to $250,000 and civil penalties up to $10 million, the law firm of Wallin & Klarich states.

Problems often result from manufacturing errors and omissions. Many of these can be traced to the supply chain. For example, inaccurate inventory counts lead to starting a production run only to discover a key ingredient is missing, stopping production.

Evolving by using available technology as a way of moving forward can be done when company leaders are looking toward the future. Tools exist today—such as the Industrial Internet of Things (IIoT) coupled with modern enterprise resource planning (ERP) software—to let small and medium-sized businesses grow. They also let larger companies get even bigger.

Having total control over your inventory and an ever-changing grasp of your supply chain lets you reduce raw materials and shipping costs while still delivering products on time.

Translation Errors Can Prove Fatal

The final error in our “devils’ dozen” is:

  1. 12.Translation Mistakes.

Let’s face it: many American chemical manufacturers purchase materials from suppliers outside the U.S. and ship finished products overseas. That means labels must not only be in the languages used by your customers and others in the supply chain, they must also meet safety regulations at their destination.

If, for example, a formula using imperial measurements (i.e., pounds and ounces) is incorrectly translated into its metric equivalent or instructions are unclear, the resulting product may fail safety and purity tests. Poorly translated labels could cause regulators to deny a shipment until the products are relabeled correctly. Translation errors could even result in a large batch failing its tests, wasting the materials, time and equipment.

“If the mistakes are severe enough, the resulting chemical combinations could be dangerous or deadly for staff members who follow mistranslated instructions to the letter,” GLTaC states.

Under terms of the European Chemicals Agency’s Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) act of 2006, dossiers are required on each substance produced or imported weighing more than one metric ton.

“Inaccurate information due to translation mistakes could result in regulatory action by the European Chemicals Agency that could prove financially crippling,” GLTaC, a translation services provider, warns.

Technology Helps Reduce Mistakes

ERP software like Microsoft Dynamics 365, especially when paired with something like Xcelpros’ Integrated Chemical Management (iCM), helps companies better manage their growth.

Figure: 2Integrated Chemical Management with Microsoft Dynamics 365 Supply Chain Management

Integrated Chemical Management with Microsoft Dynamics 365 Supply Chain Management

ERPs can work with IIoT sensors, gathering large quantities of data. Dynamics 365 Finance helps turn the raw numbers into actionable data. Using this data, and the charts and graphs created from it, executives can spot areas operating inefficiently. For example, machines are down and staff is doing make-work while waiting for earlier cycles to complete.

Having access to real-time numbers lets these leaders know where changes can occur, boosting overall production.

iCM helps chemical companies hit their growth targets. It integrates seamlessly into D365’s Finance module, providing impeccable security. Among iCM’s value propositions are:

  • Built-in labeling and safety data sheets (SDS)
  • Fully integrated SDS management
  • Real-time SDS data sheets are consistent and compliant with Global Harmonization System requirements

These SDS features reduce the total cost of ownership (TCO) by removing the need to maintain product safety documentation and data in-house.

iCM becomes the repository of record for all regulatory data while making it accessible to authorized D365 users. It also integrates SDS authoring at the formula/item level, embedding workflows for authoring and approvals.

Xcelpros’ product adds to one of D365’s many strengths: its labeling prowess. The Supply Chain Management module lets companies track products from the moment raw materials arrive in their warehouse to the instant a customer receives them. iCM builds on the existing technology, further focusing on the chemical industry.

For example, iCM becomes the system of record for all labels, integrating them into operational workflows like production and shipping. To learn more, download the iCM brochure.

Figure: 3Translation Service Process in Dynamics 365

Translation Service Process in Dynamics 365

Customers using D365 also have access to the Dynamics 365 Translation Service (DTS). Hosted in Microsoft Dynamics Lifecycle Services (LCS), it uses a machine translation system to maximize translation output quality. It also recycles linguistic assets from D365 and partners, such as Xcelpros. DTS is compatible with D365 Finance, Commerce and CRM modules among others.

Summary

Chemical companies face potential mistakes common to all growing businesses. In addition, they also face certain hurdles that other industries do not. Regulation is a major issue for chemical companies, especially those who rely on raw materials and finished products made outside the U.S. or shipped overseas.

Taking advantage of technology like Microsoft Dynamics 365 and Xcelpros’ unique Integrated Chemical Management software can help prevent these mistakes and let executives continuously grow their companies.

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References: Distribution Of Mislabeled Products In Interstate Commerce

Enhancing Chemical Plant Operations to Make it Smart Factory Ready
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Enhancing Chemical Plant Operations to Make it Smart Factory Ready
Enhancing Chemical Plant Operations to Make it Smart Factory Ready 700 500 Xcelpros Team

Enhancing Chemical Plant Operations to Make it Smart Factory Ready

Creating an Industry 4.0 smart factory requires time, planning, money and employee buy-in. Companies are advised to develop a road map showing what they want to do before they start. Converting an existing factory to a smart chemical plant requires time, effort, money and patience. Organizations will undoubtedly face barriers on the way to achieving their goals. For more information see the full article here.

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Major Challenges for Chemical Companies
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Major Challenges for Chemical Companies
Major Challenges for Chemical Companies 700 500 Xcelpros Team

Introduction

Government regulations, trade wars, blocked shipping ports and more than 4.43 million dead worldwide as a result of Covid-19 are sure to make the rest of 2021 a difficult year. For organizations in the Chemical industry, these challenges include:

  • Ongoing global transportation disruptions
  • Reducing greenhouse gas emissions and meeting climate change requirements
  • Refining the definition of per- and polyfluoroalkyl (PFAS) “forever” chemicals
  • Increasing commoditization of chemical products
  • Rising trade tensions caused by feedstock supply disruptions
  • Integrating acquisitions to release promised synergies and onboard new revenue sources
  • Reducing complexity and streamlining workflows across the globe
  • Rapidly entering and winning new markets

Sources: Deloitte, C&EN, CNN, McKinsey & Company

Ongoing Shipping Disruptions

Shipping ports, especially those in China, have been dealing with backlogs and delays since the start of the pandemic. Today, these problems still continue to display. For example, the Ningbo-Zhoushan Port near Shanghai was shut on Aug. 11, 2021 after a dock worker tested positive for Covid-19. This is the world’s third-busiest port and affects Yantian, which closed in June after coronavirus infections were found in dockworkers before gradually reopening. Also affecting the chemical and pharmaceutical supply chains are container shortages, factory closures in Vietnam and after-effects from the week-long Suez Canal blockage earlier this year, CNN reports.

“We currently expect the market situation only to ease in the first quarter of 2022 at the earliest,” Hapag-Lloyd shipping company chief executive Rolf Habben Jansen told CNN.

Delays and container shortages are contributing to much higher shipping prices. Drewry Shipping in London said the composite cost of shipping a 40-foot container on eight major East-West routes was up 360% ($9,613) the week of Aug. 19.

All of these issues impact deliveries to and shipments from US ports. In August, 36 container ships were anchored off Los Angeles and Long Beach alone. Normally there would be none or one, CNN stated.

Backlogs at these main ports often lead to delays at air terminals, overstocked warehouses and thinly stretched logistics networks.

Environmental Concerns are Taking Their Toll

Shipping delays aren’t the chemical industry’s only headache. Increased government regulations designed to reduce greenhouse gas emissions, particularly carbon dioxide (CO2), is another pain point. Add in the effects of chemical industries on the environment plus hazardous material control and it’s easy to see the industry is facing challenges on several fronts.

Among the environmental challenges facing chemical and pharmaceutical firms are setting and meeting public targets for greenhouse gas (GHG) emissions in-line with the 2018 Intergovernmental Panel on Climate Change (IPCC) report.

The report’s goal is persuading all industries—and all countries—to cut CO2 emissions by 45 percent from 2010 levels. According to a C&EN report, the largest number of 25 companies surveyed are looking at a 35% reduction from 2010 levels. The largest firms—Dow, DuPont, Eastman Chemical, Mitsubishi Chemical and others—are looking to become carbon neutral by 2050.

Figure: 1Annual carbon dioxide emissions

Annual carbon dioxide emissions

Carbon dioxide is the biggest issue but not the only chemical contributing to global effects of chemical industries on the environment. PFAS “forever chemicals” are also causing problems. They include the toxic perfluorooctanoic acid (PFOA) and a chemical formed by hydrolysis from its replacement, hexafluoropropylene oxide dimer acid (HFPO-DA).

Figure: 2PFAS Chemicals findings in New Jersey

Image: PFAS Chemicals chain reaction

Both are dangerous and long-lasting. Chemical companies around the world are looking for ways to address the handling of both substances.

Business Effects of a Changing World

A McKinsey & Co. report noted that in 1970, about 10 percent of the world gross domestic product (GDP) was in India and China. The two countries alone represent about 36 percent of the world’s population. Fifty years later, China alone represents 30 percent of the chemical demand and supply right now. That number is rising and could top 40 percent, the report warns.

Combined with the continuing U.S. – China trade war and the effects of Covid-19, “regulation and geopolitical considerations may be much more relevant factors than what management teams have experienced in the past,” the report warns.

Many of these issues are forcing businesses to change how they work. Flexibility in terms of partnerships, cooperation, broadly designed research programs, and the design of smaller and more flexible production units will increase over time, McKinsey predicts.

One way of meeting these challenges, and countering the pitfalls is through technology.

Using Tech to Combat Challenges

Technology in the form of artificial intelligence, “can provide incremental and relevant benefits” in terms of asset and commercial productivity, the McKinsey report states. Four key areas where AI can help chemical companies include:

  • Dealing with large data sets, such as production, marketing and sales plus research and development.
  • Providing earlier access to real-time information to let decision makers respond more quickly than the competition.
  • Increasing performance transparency around equipment and employees, such as chemical specialties. The transparency will help educate shareholders on the companies’ performance.
  • Boosting process automation in terms of scale.

Labeling and Regulation Compliance

Today’s enterprise technology, specifically Microsoft Dynamics 365 Supply Chain Management, has the ability to generate labels in accordance with current FDA requirements.

These labels allow organizations to track materials throughout every step of the supply chain. For example, barcodes scannable by cellphones and other handheld devices can ensure temperature-sensitive raw materials are properly stored. They also can keep track of expiration dates, letting warehouse managers know which items need to be shipped out first.

Enterprise Resource Planning (ERP) products such as Microsoft Dynamics 365 (D365) let chemical and pharmaceutical companies avoid compliance mistakes. How? By creating and constantly updating a large database stored in the cloud. With real-time data access, one that can be modified to include alerts showing when a part needs replacing or the stock of a particular precursor chemical is running low, companies can ensure quality standards are met. Keeping accurate track of production processes also lets them provide regulators with required data.

One Xcelpros product specifically created for the chemical industry is Integrated Chemical Management (iCM). Working with D365, iCM includes integrated systems, infrastructure for the maintenance and distribution of Safety Data Sheets (SDS) and compliance with globally harmonized system (GHS) label requirements.

Integrating with D365 Finance and Operations iCM benefits include:

  • Removing the cost of integrating with third-party labeling and SDS systems
  • Providing consistent SDS and label data management
  • Reducing the total cost of ownership by removing the need to maintain product safety documentation and data in-house

In addition to Xcelpros’ iCM, some D365 programs also accept AI modules. Working with internet of things (IoT)-enabled production machines, they provide decision-makers with critical business insights that can help them overcome today’s many challenges.

Summary

AI is just one digital technology that can help chemical companies meet increasing environmental and safety regulations. This same tech lets companies diversify their supply chains, bypassing some of the worst shipping bottlenecks or finding closer suppliers.

Using AI to generate barcode labels for everything from individual products to license plates for pallet loads is one of the key features of D365. Labels produced in D365 can provide electronic readers with everything from the chemical composition of a product to its expiration date. This makes labeling one of the most important FDA compliance requirements. Being able to fully track materials, including finished products, is another.

Book a consultation with our technology experts and learn how to strengthen your chemical company resilience.

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References: The state of the chemical industry: it is getting more complex 

Overcoming Chemical OSHA Compliance Challenges using Technology
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Overcoming OSHA Compliance Challenges in the Chemical Companies using Technology
Overcoming OSHA Compliance Challenges in the Chemical Companies using Technology 700 500 Xcelpros Team

At a Glance

  • Differing definitions of what’s considered hazardous makes it tough for chemical companies to comply with rules that could vary from region to region.
  • Chemical companies face daunting regulatory and operational challenges when complying with workplace safety rules.
  • Finding ways to make compliance smoother is crucial to chemical companies.
  • Using modern technological tools such as Integrated Chemical Management for Microsoft Dynamics 365 (iCM) can help chemical companies comply with complex, confusing rules and regulations.

Introduction

The chemical industry is constantly under increased scrutiny due to potential health and safety risks inherent to its workforce. These companies continuously face challenges following current regulations, applying updates, ensuring accurate documentation and following labeling guidelines. Chemical companies need to be able to carry out hazard determinations, have a full understanding of applicable regulations and stay up to date on OSHA guidelines. Those that don’t, risk exposing themselves to additional inspections and the possibility of serious fines. Thankfully, more companies are finding that compliance ratings can be improved using cutting-edge tools and technologies.

Occupational exposures, exposure to lead and acute poisonings resulting from unsound management are estimated to account globally for 1.3 million deaths.Source: The World Health Organization

Regulatory Compliance Challenges

Some of the regulatory compliance challenges facing chemical companies include:

  1. 1.Data Management: Regulatory changes can require wholesale updates to a chemical company’s data management system. “The Final Rule to Improve Tracking of Workplace Injuries and Illnesses does not add to or change an employer’s obligation to complete, retain and certify injury and illness records. It only requires certain employers electronically submit some of the information from these records to OSHA,” the department states. Complying with this rule may require costly updates.
  2. 2.Geographic Barriers: Chemicals are used, supplied and manufactured worldwide. The definitions of hazardous chemicals can change with every region. Having to include environmental and workplace safety laws that can vary from state to state, not just country to country, makes it tough for companies to stay on top of the laws.
  3. 3.Language Barriers: Moving chemicals from one part of the planet to another means manufacturers and shippers are also likely to run into different languages, which can add problems.
  4. 4.GHS Labeling: OSHA states the Globally Harmonized System (GHS) of Classification and Labeling “provides a common, coherent approach to classifying chemicals and communicating hazardous information stored on labels and data safety sheets,”. GHS also helps reduce trade barriers and increase productivity for American businesses that handle, store and use hazardous chemicals. Complying with GHS standards, which OSHA has enforced in the United States since 2012, requires chemical containers to have a harmonized signal word, GHS pictogram, a hazard statement for each hazard class and category plus a precautionary statement. Chemical companies need to be agile enough to monitor and adapt to these updates.

Role of Technology in Meeting the Dynamic OSHA Compliance Needs

More and more, chief experience officers (CXOs) and chief executive officers (CEOs) of chemical companies around the world are realizing the benefits of applying cutting-edge technology to chemical regulatory compliance. Using newer products such as Integrated Chemical Management for Microsoft Dynamics 365 (iCM) is the best way for chemical companies to keep pace with dynamic OSHA guidelines. Tools like iCM can integrate with a company’s existing data to make it more agile and effective.

ICM is the chemical industry’s first overarching tool designed to help automate Safety Data Sheet (SDS) authoring and maintenance, GHS-compliant label management and safety management compliance. Aside from ensuring compliance with changing OSHA guidelines, ICM helps organizations with the following:

  • Centralizing data, making it easier to access. Any changes in data enjoy increased visibility and can be tracked across different functions and regions.
  • Removing the need to pay for outside labeling and SDS authoring.
  • Reducing manual data inputs and related errors.
  • Providing real-time maintenance and updates to SDS and label management while remaining in compliance with existing GHS guidelines.
  • Reducing time-to-market through greater efficiency.
  • Promoting better OSHA compliance through integrated Safety Data Sheets (SDS) management and by removing the need to maintain paper product safety documentation.

Figure: 1Key Functionalities of Microsoft Dynamics iCM

Integrated Chemical Management Key Functionalities

This is a critical aspect for staying power in the industry. Chemical companies need to audit and update their IT infrastructure to ensure processes and procedures stay current with any changes to OSHA and GHS guidelines. GHS guidelines for example, have been updated five times since 2012, and most recently in 2019.

Updating data collection technology not only promotes better legal compliance, it also improves safety in the workplace, better protecting employees, and the environment, from the misuse of hazardous chemicals.

Today’s customers are more aware of potential chemical hazards than ever before. They are more likely to use a company that takes safety guidelines seriously. Adapting and leveraging advanced technologies is an integral way chemical companies can improve their OSHA compliance and boost their brand presence.

For those companies finding the ever-changing landscape of OSHA guidelines intimidating, updating to iCM can make managing regulatory compliance a much smoother process.

Key Takeaways

  • Managing regulations across the supply chain from raw material suppliers to end customers is easier with the help of a comprehensive system like Microsoft Dynamics 365 with iCM.
  • Chemical companies can use technology experts to smoothly implement the latest tools and ensure compliance to health and safety rules.
  • Obeying safety and environmental regulations improves the public’s perception of a company’s brand.

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The future of the chemical industry involves technology
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The future of the chemical industry involves technology
The future of the chemical industry involves technology 700 500 Xcelpros Team

At a Glance

Technology is becoming a driving force in many industries and the chemical industry is no different. It’s easy to say the future of the chemical industry will continue to involve new and emerging technologies. Among the most cost-effective ways is through enterprise resource planning (ERP) software.

Among the industries benefiting the most from ERP systems’ integration of supply chain management are:

  • Manufacturing
  • Healthcare
  • Pharmaceuticals
  • Plastics

Introduction

Tech will spur innovation in the chemical industry, a global management consulting firm, states.

“Historically, the chemical industry has generally been a slow adopter of new digital or analytics technology,” a McKinsey & Company report on the state of the chemical industry asserts. “Still, new digital approaches can provide incremental and relevant benefits (mostly around asset and commercial productivity).”

Among the chemical industry trends highlighted in the report are:

  • Productivity gains from using artificial intelligence (AI) in production, marketing and sales plus research and development.
  • Competitive advantages from having robust real-time information on sales, costs and inventories.
  • Increasing performance transparency around chemical products, management teams, individual activities and business lines.
  • Using process automation to change the way chemical companies think about complexity, scale and sourcing of administrative activities.

“While it continues to be unlikely that the chemical industry at large will experience a revolution, the evolution it faces will be continuously accelerating in speed and eventually significantly change the way things are done,” McKinsey states.

Other Ways Tech Boosts Chemicals

In addition to the business advantages cited by McKinsey, six other reasons why chemical companies are boosting their investment in technology are:

  • Cloud storage and information sharing
  • Advanced maintenance analytics
  • Reduce, reuse and regenerate
  • Yield, Energy and Throughput (YET) analysis
  • Globalization
  • Value Maximization

Cloud storage and information sharing lets wide-spread companies keep their divisions informed. For example, Sales in the U.S. can tell Procurement in India what to expect. That way Procurement has time to manage inventory.

Advanced maintenance analytics lets production facilities predict when a machine will break, Europe-based AG Chemi Group reports. By monitoring wear points, employees can replace worn components before they break. This reduces machine downtime by 30% – 50% and boosts machine life by 20% -40%.

Connected sensors, which are used by the Industrial Internet of Things (IIoT) to send data to company networks. Company engineers can evaluate the data to pinpoint the components most likely to wear, order replacements and have them ready to install.

Managing and reducing chemical waste , reusing products and materials and regenerating natural systems is part of the circular economy, which the Ellen MacArthur Foundation states, helps companies redefine growth by focusing on positive society-wide benefits. The circular economy model builds economic, natural and social capital, the foundation claims. AG goes further and states that chemical companies can take advantage of current trends in chemical engineering and process technology to increase efficiency, lower raw materials consumption and reduce manufacturing costs by reducing chemical waste.

YET analysis focuses on improving efficiency by reducing bottlenecks. Using information from literally millions of data points, companies can model the production process and identify areas for improvement.

Globalization is part of how the world now operates. Suppliers and customers are literally spread all over the globe. As a recent example, a ship stuck in the Suez Canal delayed 12 percent of global trade for more than six days. U.S-based companies depending on pre-production materials from Europe were stuck waiting, delaying production.

Value maximization refers to the idea that, “The economics of specialties production (such as chemical manufacturing) may demand maximizing output of a high-value product, while commodities production may prioritize holding down costs, but the former is typically built on the latter. Put simply, the businesses may have two separate profit and loss accounts, but they are connected to the same pipes,” AG Chemi quotes Valerio Dilda from the Polytechnic University of Milan as saying.

This method helps maximize profit generation in complex production systems and supply chains.

Figure: 1New Technologies in Chemical Industry

New Technologies in Chemical Industry

One Way To Update

A fast, easy method for chemical production companies to update their technology is by investing in ERP software. The integrated suite of programs allows chemical companies to access massive volumes of information, control it, massage it and use the insights for planning, inventory control and other business tasks.

One such product is Microsoft Dynamics 365’s family of programs.

Running on Microsoft Azure in a distributed, cloud-based environment, Dynamics offers secure computing, versatility and customization capabilities. Cloud computing offers greater security, meaning that patented chemical products and formulas are more secure than on a company’s own network.

The Supply Chain Management program includes these core concepts:

  • Asset management
  • Cost accounting
  • Cost management
  • Inventory management
  • IoT Intelligence
  • Master planning
  • Procurement and sourcing
  • Product information management
  • Production control
  • Sales and marketing
  • Service management
  • Transportation management
  • Warehouse management

Summary

The chemical industry tends to lag behind other segments in terms of modernizing its operations. Failing to keep with technology can cost companies through missed opportunities and poor inventory management. ERP software like Microsoft Dynamics 365 for Supply Chain Management or Finance are two of many options.

Book a consultation to future proof your chemical company using the latest technology.

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Rising data security risks in chemical plants
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Rising Data Security Risks in the Chemical Industry
Rising Data Security Risks in the Chemical Industry 700 500 Xcelpros Team

Rising Data Security Risks in the Chemical Industry

Using technology to automate factories has the potential to revolutionize the biochemical and pharmaceutical industries, albeit at the expense of greater risk. Microsoft’s Azure cloud computing platform includes many security features designed to protect businesses in these sectors. For more information see the full article here.

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4 KPIs That Impact The Growth of a Chemical Company
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4 KPIs That Impact The Growth of a Chemical Company
4 KPIs That Impact The Growth of a Chemical Company 700 500 Xcelpros Team

4 KPIs That Impact The Growth of a Chemical Company

Does your business operate in the chemical industry? If compliance is a big part of what you do, you don’t want to miss out on this quick insight into important KPIs that could be impacting your business today. For more information see the full article here.

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D365 supply chain demand forecasting helps Chemical Industry
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How Dynamics 365 Supply Chain Demand Forecasting Helps Chemical Companies Plan for Inventory
How Dynamics 365 Supply Chain Demand Forecasting Helps Chemical Companies Plan for Inventory 700 500 Xcelpros Team

At a Glance

  • Accurately forecasting customer demands allows a company to quickly adapt to changing needs. Leveraging predictive analysis of historical data in demand forecasting models permits better understanding of what customers want.
  • Chemical industry decision-makers and inventory managers are now concentrating on short- and long-range demand fluctuations caused by price volatility and changes in supply chain dynamics.
  • Top executives can make insightful decisions driven by informed analysis of demand patterns using robust Supply Chain Management (SCM) tools.

Understanding Demand Forecasting

Demand forecasting uses predictive analysis to gauge customer demand patterns based on historical data. Historically, chemical companies use demand forecasting to gauge independent and dependent sales orders. Rapidly increasing global markets and integrated business models show a growing need for better responsiveness and flexibility in demand forecasting. Making these changes helps chemical companies:

  • Prepare shipping materials in advance for one-time and complete deliveries.
  • Manage inventory while being flexible to accommodate unforeseen demands.
  • Sense and predict product demand based on market hierarchy, geography, climate, time zones and other reasons.
  • Stand out in the market by consistently delivering at competitive prices.

Understanding historical demand and accurate inventory management plays a key role in forecasting sales. It ensures adequate inventory. Improperly managed inventory impacts everything from shipments to sales. Companies are very reactive about their inventory planning when resources are not allocated properly. Continually reprioritizing orders throws off historical demand tracking. Adding an unexpected order can lead to big problems.

A recent poll by Deloitte with chemical executives indicates that more than 20% of total US chemical sales will be driven by business-to-business (B2B) e-commerce in 2021.

Accurately forecasting inventory helps firms understand what they have. It also helps visualize the sales pipeline. With accurate demand forecasting, a plant can take measured risks and make informed decisions causing higher profits.

Demand Forecasting Challenges

Chemical companies often struggle to leverage huge volumes of data. Not understanding and using the data effectively can cause incomplete interpretations and communication errors.

The supply chain may have multiple stakeholders using different systems for enterprise resource planning (ERP), data management (DM) and supply chain management (SCM). Demand forecasting using these different systems often causes duplicate information and loss of crucial data.

Failing to use an integrated, sophisticated demand forecasting system limits a company’s ease of use and its ability to customize the software for its unique needs.

Figure: 1Demand Forecasting Challenges in Chemical Industry

Demand Forecasting Challenges in Chemical Industry

Demand Forecasting in Microsoft Dynamics 365

Microsoft Dynamics 365 Supply Chain Management (SCM) helps businesses adjust forecasts and view key performance indicators (KPI’s) more efficiently. Companies using this product can see demand trends and then adjust forecasts. The new forecasts seamlessly are used in inventory planning. By removing outliers, Dynamics 365 enables accurate measurements.

Dynamics’ Supply Chain Management tool follows a comprehensive flow for demand forecasting:

  1. 1.System gathers historic transactional data.
  2. 2.Machine learning uses the data to generate forecast and insights.
  3. 3.Collected data provides forecast visibility while allowing forecasts adjustments.
  4. 4.Approved forecasts are then authorized.

Figure: 2Demand Forecasting in Microsoft Dynamics: How it Works

Demand Forecasting in Microsoft Dynamics: How it Works

Microsoft Dynamics 365 SCM helps manage these complex demand patterns and improve inventory planning. Its features include:

  • Integrating Planning Optimization using demand forecasts to make informed decisions for master plans.
  • Creating, generating or importing the demand forecast based on operational models and company requirements.
  • Customizing demand forecasts that streamline the process by reducing intercompany orders and considering customer forecasts.
  • Increasing accuracy and margin with lean demand forecasting.
  • Graphing and creating interactive demand forecasts for real-time feedback anywhere on the trend line.
  • Seamlessly applying the demand forecasting tool with existing ERP. This harnesses data and generates accurate forecasts for improved inventory control and bottom lines.

Chemical companies can better predict demand by fortifying their IT infrastructure with the right tools. Using software that’s easier to use, more accessible and has greater accuracy enables them to improve their inventory planning. Integrated solutions like Microsoft Dynamics 365 provide a robust and complete demand forecasting tool, enabling businesses to set up and maintain optimal inventory control.

Key Takeaways

  • Demand forecasting in the chemical industry needs to move forward from conventional, spreadsheet-based models and tools to newer, more agile digital systems.
  • Microsoft Dynamics 365 offers chemical companies the ability to forecast inventory levels more accurately through visual, customizable and interactive features.
  • Increased focus on accurate demand forecasting helps chemical companies avoid stock-outs or over-stocking. It improves profits, strengthens supply chains and elevates overall customer satisfaction.

To learn more about implementation of demand forecasting in your chemical company, book a consultation with Xcelpros.

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Leveraging Technology to Boost Profits for Chemical Companies
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How chemical companies benefit from adopting newer technology
How chemical companies benefit from adopting newer technology 700 500 Xcelpros Team

Introduction

Chemical companies can face numerous problems dealing with hazardous chemicals held in inventory. More supply chain officers are turning to digital tools to transform their operations, and increase efficiency. Here are some ways that technology is helping the chemical industry by automating chemical management.

Leveraging Technology in Chemical Companies

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Factors Influencing Chemical Inventory Management
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Major Influencing Factors in the Chemical Inventory Management
Major Influencing Factors in the Chemical Inventory Management 700 500 Xcelpros Team

Understanding the Issues

From maintaining accurate inventory records, monitoring chemical warehouse safety requirements of raw materials in inventory, keeping up with fluctuating demands, and working with changing commodity prices, chemical companies today face numerous obstacles that can have a big impact on chemical inventory management, which is already a complex and dynamic task, by industry standards.

To minimize the impact of these challenges it’s important that chemical companies are able to identify and understand what issues exist before they cause too much damage. Unfortunately, keeping an eye on every aspect of inventory management could be the biggest challenge if you don’t know where to start. Here are 4 key things to focus on that can help businesses stay ahead of the competition, and respond quickly to changes in requirements.

1.Accurate Warehouse Inventory Chemical companies cannot accurately plan for changes in the supply and demand of their products if they do not have the latest status of their inventory. When it comes to managing the complex inventory often seen in the chemical industry, even small problems in the warehouse can lead to bigger organizational challenges. To prevent this, it’s important that everything is accurately labeled and stored in the correct locations to efficiently fulfill orders and manufacture products. Effective chemical warehouse management can help companies to save up on a lot of costs.

2.Occupational RequirementsAside from ensuring no harm comes to end users, chemical companies have a huge responsibility for the health and safety of their employees, this starts with knowing exactly what chemicals and raw materials are present at all times, and what hazards they might pose. Company’s need to properly track hazardous materials as well as educating employees on precautions and procedures for handling goods. Hazard communication has repeatedly ranked at the top of OSHA’s list of most-cited violations every year.

3.Fluctuating DemandAnother challenge faced by chemical companies is unplanned fluctuations in the demand for their products. Big jumps in demand can result in either the expiration of raw materials and products, or the inability to produce enough when required, with both scenarios having significant impacts on business operations and revenue. Being able to quickly react to changes in the market, as well as supply chain disruptions can help minimize the impact of these situations and more.

4.Volatile Commodity PricesChemical companies are also forced to deal with wildly fluctuating prices for the raw materials they use. For many products, crude oil and other petroleum products account for about 50% of the material’s production costs. Due to the volatile nature of oil prices, economic factors such as politics, tariffs, and fluctuations in currency value are just a few of the things that play a role in the price of raw materials. One key aspect of chemical inventory management is accurately predicting trends so that companies purchase raw materials efficiently and at cost-effective prices. When chemical companies have enough insight into their own inventory, they’re able to place more focus on buying the materials they need to meet the demands of their customers.

Figure: 1Benefits of a chemical inventory management system

Benefits of a chemical inventory management system

Final Thoughts

While there are a number of other challenges that impact businesses in the chemical industry, not knowing where to focus makes it difficult to efficiently address issues as they arise. Understanding the 4 key factors covered above can help get companies focusing on the right performance metrics, and better positioned to navigate the unexpected ups and downs that go along with the industry.

Often, the best course of action to manage these complex inventory management challenges includes technology-driven solutions that help chemical companies in in-depth chemical inventory tracking, eliminating the issues of not knowing where materials have been stored, keeping track of their safety information, and analyzing inventory trends to better prepare for the demand of customers without keeping too much inventory in stock.

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