Chemical

Overview

Producing a wide and diversified range of more than 70,000 products the global chemicals industry is characterized by complex and multilayered supply chains and procurement networks and has above moderate exposure to volatile regulatory, economic and geopolitical environments. Moglix Business partners with chemical companies to enable them to reinvent their supply chains and procurement networks for greater predictability, sustainability, profitability and de-risking.

Growth Drivers:

The global chemicals industry has been able to register growth in recent times owing to increasing demand for a wide range of commodity chemicals including polymers, bulk petrochemicals, inorganic chemicals, basic industrials and fertilizers in emerging economies, especially from those in South East Asia and steady course correction leading to range-bound growth in matured markets.

Challenges:

Supply chains in the chemicals industry are likely to get more complex on account of shifts in global demand, market consolidation and geopolitical volatilities. The emergence of Asian and Middle Eastern chemical players to a global scale that has enabled large increases in volumes is likely to trigger price warfare among major players leading to rationing of the corporate bottom line. Supply chains in the chemical industry are getting more complex due to shifts in global demands, market consolidation, commoditization and geopolitical risks that are likely to affect global sourcing networks. With a rise in demand for customized and differentiated products and greater customer-centric services, chemical companies with legacy supply chain designs face greater risks emanating from lack of capabilities to correct course in response to evolving demand patterns and be more agile and flexible. Chemicals customers increasingly require customized products and value-added services. Rising expectations regarding pre-sales and post-sales services require an integrated supply chain management that calls for modernization of fixed assets and more efficient procurement practices to absorb price shocks.

Solutions:

In order to stay competitive and relevant, chemical companies need to upgrade their procurement networks for greater transparency, speed and consolidation. Vertical integration of players across the supply chain in the chemical industry is likely to generate higher process efficiencies, enable proactive data-driven decision making and reduce procurement risks. Chemical companies also need to build greater resilience into their procurement networks and insulate supplies of materials from supply-side and pricing shocks to maintain optimized levels of inventory holdings and reduce working capital lock-in. Moving forward product differentiation through more customized sourcing and collaboration upstream can enable chemical companies to stay price competitive and avert risks posed by product commoditization. Adaptive and premium service levels for star accounts contributing to lions’ share of the revenue stream can enable chemical companies to be more efficient and responsive to market trends. The use of data for further individualization of chemical product offerings based on available insights can allow chemical companies to decrease costs and deploy performance-based pricing strategies in place of price-per-unit of weight or price-per-unit of the container.

The Moglix Advantage

At Moglix Business, we collaborate with chemical enterprises to address gaps in their supply chains with our dedicated offerings of SaaS technology suite, supply chain consulting and enterprise solutions for procurement to pay.