Chemical Management

How Dynamics 365 Helps Transform Chemical Companies

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%.


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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Managing Chemical Compliance With an ERP

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.


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

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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

erp for chemical industry

Digitization of the Chemical Industry-Role of an ERP system

Digitization of the Chemical Industry-Role of an ERP system 700 500 Xcelpros Team

At a Glance

  • Chemical companies are more frequently moving towards fully adopting newer, digitized technologies and away from legacy systems and processes historically operated in silos.
  • A well-functioning Enterprise Resource Planning (ERP) system helps chemical companies in all parts of their operations- procurement, manufacturing, supply chain, vendor management, aftermarket, and more.
  • Implementing an ERP system doesn’t need to be costly or daunting, provided companies go for the right system and take the help of experts.
  • The ongoing Covid-19 pandemic has highlighted the need for chemical companies, with the sector providing most of the raw materials used in sanitizers and personal hygiene products.

While digital transformations have been a big help for the advancement of every industry; many sectors are still looking for new ways to utilize these technologies to their fullest. The chemical industry is on the cusp of legacy and advanced software and systems. Many companies have departments working in silos, manual documentations, slow change management mechanisms, data discrepancy issues, and an overall fall behind when it comes to digitization and automation. Chemical companies can address these issues and many others by investing in a high-end ERP system.

According to PwC’s 23rd Global Annual Survey, 42% of chemical company CEOs prioritized and invested in digital operations and related technologies.

This statistic indicates that now’s the time for chemical companies to systematically restructure their IT base and look at ERP as an option and a way forward to sustainable growth. After all, every sector is looking to leverage digitization to their benefit, including the chemical industry.

Here are five benefits of an ERP software system for chemical companies:

1.Digitization of Processes Leading to Accelerated TimelinesAn intricately designed yet easy-to-implement ERP system such as the Microsoft Dynamics 365 ERP comes equipped with artificial intelligence (AI) and machine learning (ML) based features that can automate many processes such as documentation, reporting, log entries, etc. This will reduce manual intervention (providing personnel with time to invest in more innovative aspects) and mitigate errors. Digitization in the chemical industry also helps expedite processes as the data can be accessed, altered, and verified in real time. With Microsoft Dynamics ERP, chemical companies can realize the vision of going agile.

2.Fortifying Supply Chain Management (SCM) A comprehensive ERP for the chemical industry can facilitate better management of your supply chain by interlinking the departments and creating a data pool between finance, sales, and delivery. This way, you will digitize and monitor the procurement of raw goods, oversee warehouses, manage inventory more efficiently, channel communication between different stakeholders, and streamline the workflow.

Figure 1: A Multi Pronged ERP System to Integrate Different Departments in a Chemical Company

A Multi Pronged ERP System to Integrate Different Departments in a Chemical Company

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3.Better Response Time and Quicker Time to MarketAn ERP for the chemical industry provides companies with a competitive advantage by giving better process and resource visibility, interconnecting departments, and avoiding bottlenecks. ERP also enables chemical companies to identify their slow-to-move inventories and find quicker delivery options. This considerably reduced time to market. The overall product development process in chemical manufacturing companies is also expedited, thanks to the automation and optimization features of ERP systems, and this also results in quicker time to market.

4.Dynamic Change ManagementThe chemical manufacturing processes are subject to changes at different levels, from pre-formulation to production and packaging. These changes take time to get recorded and notified in a legacy system-backed environment, leading to delays. With an ERP, chemical companies can be more flexible and dynamic in their change management approach. As data becomes centralized and systems become integrated, more collaboration can occur, expediting the communication network in a change management ecosystem. Even at the supply chain and aftermarket levels, ERP allows better visibility across several stakeholders, enabling manufacturers to respond quickly to any changes.

5.Better Customer Service and Enhanced Customer Satisfaction Like any other industry, the chemical industry strives to satisfy its customers- be it other industries, retailers, or end-users. With an ERP system for chemical manufacturing, companies gain insights into customer preferences and can anticipate market needs. Companies choose ERP systems designed to respond quicker and better to customer demands. With the ever-changing customer expectations scenario, chemical companies need to invest in a system that gives them better customer visibility and agility to respond.

ERP is a solution of possibilities, and chemical companies can turn these possibilities into opportunities. To survive, sustain, and thrive in this era of digitization, the chemical industry can use this software to integrate and collaborate better than ever before. It can also help to work with experienced consultants to maximize performance and reduce costs. While every company has different problems and requirements, well-designed chemical ERP software can efficiently address some issues.

Key Takeaways

  • The chemical companies must analyze their as-is IT infrastructure and identify the right ERP system for their requirements.
  • ERP is a dynamic, flexible software; thus, chemical companies can evaluate many aspects of their operations comprehensively with the help of a single system.
  • With learned ERP experts, chemical companies can go places in terms of operating smoothly and delivering consistently.

Also Read: ERP Solutions to Rev Up Oil and Gas Industry

References: PwC’s 23rd Global Annual Survey

Overview of Chemical Distribution in Microsoft Dynamics 365

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.


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.


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


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.

Key Solutions to Chemical Company Operational Challenges

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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mistakes that slow the growth of a chemical manufacturing company

Mistakes that slow the growth of a chemical company

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


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


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.


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

Major Challenges for Chemical Companies

Major Challenges for Chemical Companies

Major Challenges for Chemical Companies 700 500 Xcelpros Team


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.


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.

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

Overcoming Chemical OSHA Compliance Challenges using Technology

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.


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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