Today, the chemical industry has entered a stage of adoption: adopting new technologies, changing business models, and so on. These changing times bring excitement and uncertainty to chemical companies, who constantly seek to increase their market share by increasing productivity. Although many chemical companies have invested heavily in better and newer IT infrastructure, they have failed to maximize the potential of this infrastructure. On the other hand, other companies are still cautious about taking the digital road, which brings uncertainty to the decision-makers of chemical companies.
Clearly, chemical companies face challenges in improving productivity and growth rates. By studying how chemical companies overcome these uncertainties, we first need to sort out the pain points of chemical industry in improving productivity.
Challenges for the chemical industry in improving productivity:
Sharp drop in oil price:
Commodity price is the catalyst to determine the output rate of chemical companies. In 2020, the oil price will drop unprecedentedly, which will cause the chemical companies in the United States and the world to suffer from low productivity. The price of soft bulk commodities has also caused a serious imbalance in the demand pattern of raw materials, resulting in the interruption of the product life cycle of many chemical companies. Due to the impact of oil prices, the results have been comprehensively impacted.
Difficulties in adapting to new technologies:
For chemical companies, the adoption of new technologies and tools is not only a wise move, but also inevitable. The need to build a robust IT infrastructure can generate and analyze data, automate operations, and simplify the supply chain. However, many chemical companies have not entered the advanced stage of digitization, unable to use the latest technology. The lack of skilled and knowledgeable professionals and consultants also often leads to wrong judgments, resulting in a blow to productivity.
Lack of real-time visibility to different stakeholders:
chemical companies involve multiple stakeholders, many of which are geographically separated. The production process involves changes, callbacks and unexpected challenges at any time in the life cycle of chemical products. However, legacy systems and reliance on human intervention lack transparency and full visibility to all stakeholders – resulting in process delays, communication gaps, and operational failures. All of this has a negative impact on productivity.
Snowball effect of covid-19 pandemic
The covid-19 pandemic challenges the business outlook itself in the first quarter of 2020. Borders were forced to close, traffic was cut off, travel was cut off, and factories were shut down. Global supply chain disruption; entire chemical plant operations either slow down or stop. The economic slowdown has had a huge impact on the productivity of the chemical industry. Even if the world begins to slowly reopen, there are still basic labor problems, lack of investment and demand differences, which will continue to plague chemical companies.
