Three Emerging Trends in the Chemical Industry

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That is why chemical companies are investing in business management solutions that systematically simplify operations through digital transformation. Successful chemical companies understand they need a catalyst, robust tools, and a business management strategy that encompasses accounting, finance, operations, inventory control, and compliance.

The best solution is an Enterprise Resource Planning (ERP) system with a track record of success in the chemical business.

Managing a chemical business in today’s marketplace can be complicated

Far from being solely focused on financials, ERP can deliver the software core for any business from accounting and finance all the way to inventory and supply chain management and control. Additionally, because all these components are implemented in a modular fashion, ERP can provide both a cohesive software interface as well as the customized functionality your organization needs.

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1. Market-creating innovation in the chemical industrySuccessful chemical manufacturers and distributors are focused on addressing the dynamically changing market and stakeholder needs. Being prepared for ongoing mergers, acquisitions, and divestitures is essential in creating new markets with new products for new clients.

2. Even more customer centricFaced with declining margins, increasing global competition, product commoditization and tough customer demands, chemical companies are responding by putting the customer at the center of their strategy. According to PWC, “The industry has primarily viewed digital tools as a way to boost internal productivity, but hasn’t looked outward to offer customers innovative products and services. But as with other traditional sectors, events occurring in the chemicals industry — including customer demands for cutting-edge products and nimble startups responding more quickly to customer requests — have compelled companies to reconsider their place in the digital revolution.”1

3. Achieving operational excellence through process automationChemical companies are pushing towards operational excellence with business process automation, which is both scalable and commercially feasible. This trend is only becoming more important because, in a commodity market, it is essential to increase productivity and profitability with existing physical assets.

A robust digital infrastructure gives companies the up-to-the-minute complete information they need to deliver the highest levels of customer service and respond to customer requests quickly, including development of new products and services.

1 https:// www.strategyand.pwc.com/trend/2018-chemicals

Three emerging trends in the chemical industry

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To meet the challenge of these industry trends, a robust ERP system provides the technology and software that ensures a chemical company has a fully functioning integrated management system for its core business processes. An ERP is the foundation for a chemical company’s processes and IT infrastructure. It adds value by integrating and managing the processes, activities, and systems that develop and deliver products to customers. An ERP that best serves a chemical company will have capabilities specifically developed to meet the formulation, labeling, storing, handling, and shipment requirements of this business.

Some of these needs include:Formula management system

Lot and tracking solution

Batch sizing and scaling

Bill of Materials formula calculations

Globally Harmonized System (GHS) compliance capability

ERP to the rescue

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Streamlining operations with up-to-the-minute dataA robust ERP offers best-in-class supply chain and financial management with built-in tools to manage regulatory compliance, formula management, quality control, manufacturing, and customer service. With a single source, chemical companies have complete, centralized, real-time information on inventory and production as both move through various stages of the supply chain. This ability to quickly access and drill down into data to understand exceptions and respond to management with accurate and confident answers streamlines operations and increases productivity.

The mobile solutions integrated into an ERP system assists managers at every stage from production, purchasing, warehouse management, work order management, supplier management, to project management so decisions can be made on the go and fed directly into the system.

Benefits of a robust ERP system

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Lowering costA robust ERP provides complete backward- and forward-lot traceability for each formula and ingredient, simplifying the issue of tracking and minimizing any impact on the bottom line and productivity. Plus with real-time dashboards that help monitor key performance indicators (KPIs), there are no surprises or miscalculations. Better analytics which include big data, dark data captured from instrumentation, and historical data are helping chemical companies make better forecasts and decisions in all areas including the supply chain and marketing.

Managing regulatory demands (compliance and traceability)Compliance capabilities across an ERP ensure that industry and federal regulatory mandates, plus customer-specific requirements, are kept current with best practice processes. Compliance and traceability include generating industry-specific product labeling and compliance reports. In addition, an ERP provides screen security and transactional audit trails that meet both corporate and regulatory governance requirements.

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Differentiation through customer relationshipsThe market landscape in chemical is highly competitive; local competitors in emerging markets can often charge less, operate at a lower cost, and have the agility to react quickly to local needs. Companies live and die by their customer relationships and customer satisfaction—and up-to-the-minute data is critical to ensuring customer satisfaction.

One of the perils for chemical companies is that supply chains extend far beyond a company’s walls. That means that chemical companies must have a complete view across their global ecosystem. Companies need deeper intelligence to develop disruptive innovations focused on specific capabilities and solutions to meet their customers’ requirements.

Quality controlQuality control is a key part of the ERP solution for growing chemical companies. Laboratory Information Systems (LIMS) can be used concurrently with the ERP to govern the testing of both finished and raw goods. Distribution and transportation also require special emphasis in the chemical industry, as transportation has notable costs especially when considering shipping of bulk products and HAZMAT issues.

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Robust business management is an essential ingredient to a chemical company’s profitability and productivity. By managing business challenges with a custom-designed ERP, you will be confident your business’s processes and systems are customer-centric, innovative and deliver operational excellence and real integration. In today’s digital era, a chemical manufacturer or distributor’s technology and software must be in sync with new processes and applications that are developed. From assemblies, audit trails, financials and accounting applications, and marketing tools, a chemical-savvy solution provider and ERP solution have the capabilities chemical industry managers need to keep their businesses secure and compliant.

Are you looking for a catalyst to propel you to profitability?

“Transforming data into actionable information, however, requires both the right technologies and the right people. The right technologies include systems with analytical and visualization capabilities that enable predictive manufacturing, technical problem solving, process design and hazard analysis, environmental impact mitigation as well as energy efficiency and safety. The right people are those who can take on more strategic, coordinating and creative activities.”

Elsevier, Chemical Manufacturing’s Three Main Challenges in Industry 4.0 by Matt Weber in Chemical Manufacturing Excellence

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About NexTec GroupNexTec Group has been helping clients select, implement and run their business technology for over 24 years. If you need to improve your marketing, sales and service and connect data from all your departments (finance, accounting, purchasing, operations, inventory) into one central system, NexTec can help. You will see the benefits in a better understanding of your prospects and customers, streamlined operations, increased profits and money saved. Industries we serve include chemical, food and beverage, manufacturing, distribution, pharmaceutical, professional services and more. NexTec is a gold-certified partner of Sage, Microsoft and Acumatica and has a 95% customer retention rate.

Embrace technology, transform your business at nextecgroup.com

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