Increasingly fierce competition, changing customer needs, evolving regulatory environment and dynamic cost equation have put heavy pressure on today's chemical suppliers. In the face of this challenging environment, many chemical enterprises are focusing on reshaping their business and operation mode through the transformation trend from other industries. However, many people are missing a key opportunity. 52% of the chemical enterprises surveyed lack digital strategy and transformation roadmap. According to a new report "Digital Transformation: are chemical enterprises ready?" Deloitte global consumer and industrial products industry group and China Petroleum and Chemical Industry Federation (cpcif) were jointly published.
The analysis of the report is based on the collection of survey responses from 102 senior executives of more than 50 chemical suppliers in North America, Western Europe and Asia. The survey data has opened a multi-year research program to explore the opportunities and challenges of digital trends for chemical enterprises.
The survey found that organizational agility (55%) and flexibility (39%) are challenges for chemical suppliers, which may limit the digital LED business transformation. Yann Cohen, Deloitte's global head of digital chemistry, said: "while most of the responsibility for implementing digital initiatives now falls on information technology or new digital departments, many executives believe that a single business or function should have full ownership."
"Taking it into the context of China, we observe that most Chinese chemical manufacturers adopt digital terms in precocious clusters, even though China is one of the most digital mature markets in the world with its unique ecosystem," said Li Jiaming, consulting leader of chemicals and special materials division, Deloitte China. "From the survey, it can be seen that most senior executives of Chinese chemical enterprises recognize that there is a lack of transparency and communication in their digital agenda. In addition to organizational agility, one of the major challenges Chinese chemical manufacturers have identified is to expand digital initiatives from pilot projects to the enterprise level. "
Li Shousheng, chairman of cpcif, said: "China's economy is now in a critical period of structural transformation and migration in different ways. At the same time, China is growing from a chemical industry power to a chemical industry superpower. 2017 is the key year of the 13th five year plan, and the development of China's chemical industry will continue to focus on eliminating inefficient production capacity. Under the strategy of "industry 4.0" and "made in China 2025", a subversive digital revolution will have a significant impact on the chemical industry. Digitalization improves the quality and efficiency of the whole industry to a great extent, and realizes the industrial upgrading. There are many successful cases of digitalization in the chemical industry: from preventive protection of equipment manufacturing to precision fertilization of agriculture, as well as the application of large-scale RFID technology in intelligent logistics. In order to improve business performance in an increasingly competitive market, chemical suppliers should not rely on traditional methods, such as cost reduction and balance sheet cleaning. Instead, these companies should explore other unknown business areas and anticipate unexpected situations. Therefore, digital transformation has become the inevitable trend of the development of the whole industry. It's not about doing it or not, it's about how to do it right. This is not a simple it issue, but a development strategy issue. "
According to the report, chemical suppliers can consider the following five factors to enhance their existing digital agenda:
Start with a clear digital enterprise strategy and develop a robust business transformation process
Build continuous insight driven advantage across the organization
Identify and mitigate network risks in complex and dynamic ecosystems
Build agile operation model internally and externally
Embedding comprehensive innovation to encourage enterprise cooperation, learning and cultural behavior change
"A clear digital enterprise strategy can generate significant value through business model innovation, customer experience enhancement and operational excellence," says Yann Cohen "Senior leaders of chemical suppliers have a window of opportunity to proactively promote a culture of digital and innovative integration, which may lead to a business transformation led by comprehensive innovation and focused on talent management and shareholder value creation."
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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