Digital technology allows chemical suppliers to release more than $200 billion in new value by reducing service costs, increasing pricing, and gaining growth from competitors.
In the past decade, the chemical industry has achieved great success, bringing more value to shareholders than its upstream suppliers and downstream customers, or even the entire global stock market.
But experience shows that we cannot be complacent. Among the top five chemical suppliers from 2000 to 2004, nearly 50% of them no longer exist from 2010 to 2014. If today's chemical suppliers continue to follow the same path, they can not expect to continue to get higher returns than the market. This is because this road is largely built by the progress of productivity. However, many traditional productivity levers are now exhausted. Where can companies look for the next change in financial performance?
We believe that digital technology will enable them to tap new value pools and grow from their competitors. For the $3.8 trillion chemical industry per year, the application of ready-made digital methods for marketing and sales to reduce service costs and improve pricing can bring about $105 billion to $205 billion of EBITDA per year. In addition, companies that are quick to move and actively deploy digital tools can steal customers and revenue from less flexible peers, resulting in additional revenue of $45 billion to $65 billion.
We estimate that the additional EBITDA generated by chemical suppliers will also improve the return on sales performance. Similarly, fast-growing companies are expected to make considerable profits.
Other B2B industries are demonstrating this approach - the introduction of digital tools, technologies and methods, which also apply to the chemical environment. Leading chemical suppliers are already looking for digital solutions to help them meet challenges and explore new business opportunities.
Chemical production is a multi million dollar industry with a complex supply chain ecosystem.
It is one of the most influential industries in the world, with annual sales of more than $5 trillion, supplying nutrition, agriculture, construction and many other industries.
The company is facing many challenges in the chemical supply chain and will have to adopt new strategies to improve operational efficiency.There is no doubt that the chemical industry is a complex industry, which needs high production efficiency.
Because of the nature of its products, it has always been under regulatory control, so maintaining all parts of the end-to-end chemical supply chain has always been a challenge.
Now, with the market instability, customer demand pressure, digitization and industry integration, some chemical suppliers are struggling under the pressure.What are the main challenges of the chemical supply chain?Uncertainty of demandOne of the complexities of chemical supply chain is the increasing customer demand in terms of speed and service, as well as the general uncertainty of market supply and demand.
At present, one of the things that is happening in the chemical industry is commercialization, which means that a customer needs to obtain products from multiple suppliers.
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