How to Enhance Your Chemical Supply Chain Management?


  • The supply chain management today is all about enhanced visibility and proper accountability.
  • With challenges like varying laws and regulations for different geographies, fluctuating prices of the raw materials, and lack of visibility across the board, the chemical supply chain management needs advanced solutions.
  • The introduction and integration of advanced technologies can bring positive changes to the chemical supply chain management.

As the decade ends, globalization has reached new heights. There is massive activity and anxiety related to supply chain dampeners due to COVID-19. For the chemical industry, this has opened doors of opportunities. They are taking their products across borders and getting business from all over the world.

According to a market research study conducted by the ARC Advisory Group, the chemical industry accounts for over $150 million of the market’s revenue.

The above stat shows a considerable share, and thus, it would not be wrong to say that in today’s uncertain conditions, the chemical industry is looking forward to a secure future. However, such globalization has also led to various challenges and roadblocks, especially concerning the movement of chemicals from end-to-end. The stringent supply chain that works in silos is no longer sustainable or feasible for processes to run smoothly. To solve these issues, chemical companies can make use of the Microsoft Business Applications and enhance the operational efficiency of their supply chain.

In this article, we will look at some of the key supply chain challenges in the chemical industry in recent times and how technology is playing the key role in enabling a modern, integrated supply chain.

Top Supply Chain Challenges in the Chemical Industry:

Every company has its own set of challenges depending on various factors, such as the size of the company, locations of their manufacturing units, the structure of the individual supply chain, etc. However, there are certain common issues faced by the chemical industry pertaining to the supply chain.

Let us have a look at the key supply chain challenges in the Chemical Industry:

  • Increased globalization means dealing with the distribution of chemicals and related raw material in different countries. Companies struggle to keep up with the laws and regulations of varying geographies. There is also an issue of compliance and worker safety when it comes to hazardous chemicals.
  • The chemical supply chain management falls prey to manual errors and miscommunications, causing potential safety hazards and monetary loss.
  • The bottom line at any chemical manufacturing company is highly dependent on raw material, natural gases, and other such commodities. When the prices of these materials fluctuate, the entire supply chain gets affected.
  • Data management seems to be a big concern for supply chain managers in chemical companies. The data involves information regarding the chemicals, their compositions, raw materials, pricing, safety precautions, distribution lists, varying protocols for worker safety, client agreements, and more. To systemize this data and harness benefit from the insights is a big challenge faced by many chemical companies who have lesser access to advanced tools and applications.

FIGURE 1:Challenges faced by the chemical supply chain

3 Ways Technology is Reshaping the Chemical Supply Chain

01.Technology Enables Creating a Connected System

Now, the world is further connected with smart devices and related applications. These applications, along with a sophisticated Enterprise Resource Planning system, can help in systemizing the chemical supply chain. This would mean system-fed entries for different geographies, their respective laws, regulations, and mandatory compliances. The system would generate a corresponding alert to related personnel of these regulations promptly, mitigating any manual error or oversight.

A connected ecosystem also provides top-to-bottom visibility in the supply chain, which would offer the top-level decision-makers a clearer picture and greater transparency across the board. This also enables better accountability and finding loopholes in the chemical supply chain.

FIGURE 2:Technologies for a Better Chemical Supply Chain Management

02.AI Helps in Preempting Changes and Strategizing a Fail-safe Supply Chain Mechanism

As mentioned earlier, the chemical supply chain management is susceptible to changes in prices of raw material, oil, gas, and other such commodities. To stay ahead of the curve, one needs to analyze and preempt the global and regional changes. An AI-enabled program is capable of churning and analyzing data in real-time to provide estimated statistics regarding these changes. This not only helps the chemical companies to make necessary modifications to their supply chain but also to strategize accordingly.

03.Big Data and Cloud in Managing the Humongous Supply Chain Data

Data collation, cataloging, and analysis prove to be intricate tasks that need tenacity and are prone to manual errors. However, with progressive technological tools like Big Data and Cloud, one can store virtually any amount of data and get it analyzed with the help of software. This categorized and analyzed data can be leveraged to generate insights that will help in fortifying the chemical supply chain for smooth transitions and better efficiency.

There is no denying the fact that the chemical industry needs to adapt to changing times. Supply chain being the backbone of this industry, it is crucial to make smart use of the right technologies to harness maximum benefits.

Key Takeaways

  • Like any industry, the chemical industry is witnessing the need for change in different facets including the supply chain.
  • With the help of cutting-edge technological tools and applications, the chemical supply chain management will be systemized and optimized for overall enhanced efficiency.

Comments are closed