Chemical manufacturing is facing a new wave of technology-driven disruption and transformation, with companies under pressure to stay competitive and profitable in the face of rising raw material and market volatility.

At the same time, there are major untapped opportunities for innovation that can reshape supply chains and drive value creation in diverse ways – but only if they address key challenges to overcome as laid in Deloitte’s 2023 Chemical Industry Outlook report.

1. Get ready to transform your portfolio management

While the chemical industry’s current environment is robust, it is also dynamic. A clear strategy for portfolio management will help you to prioritize investments in future technologies and keep up with changing consumer demands.

In 2023, the chemical industry will be well positioned to respond to these challenges and take advantage of opportunities that may arise.

To position your company for long-term transformation of your portfolio strategy, we recommend that you:

• Emphasize the long-term viability of product portfolios in the context of sustainability in a move toward asset-oriented deal making. The foundations for this shift are being laid in the current environment; now is an ideal time to make sure you are investing in the right areas.
• Invest strategically across every part of your business so as not only not miss opportunities but also avoid being left behind by competitors who have already begun their own transformations.

2. Reimagine your supply chain

In the coming year, re-evaluating supply-chain structures will be critical for producers to meet the scale of changes needed for the next decade.

Overall, supply chains will need to balance costs and carbon footprint while managing resiliency—a tough act that will require companies to consider strategies markedly different than those of the past three decades.

Companies must ask themselves how they can reinvent their supply chain to achieve greater efficiency, sustainability, and resiliency. Companies should consider how their supply chain can be reimagined through increased automation and use of technology.

Implementing an ERP system like SAP Business One can help you transform the way you manage your supply chain and achieve greater efficiency, sustainability, and resiliency.

3. Innovation & Sustainability is crucial

Companies should focus on innovation and sustainability, which can help them meet the challenges of changing markets, regulations, and consumer demands. These efforts should go beyond abatement to harness material or product alternatives on a larger scale.

The importance of innovation is clear: it’s critical to ensuring your company stays competitive in an increasingly global market.

Sustainability is a core business value, and it affects everything we do, whether it’s the way we make products or run our facilities. It’s important that we continue to integrate sustainability into our operations and focus on innovation so that we can develop new products, processes and technologies that help reduce our environmental impact.

As part of this effort, we need to look beyond abatement to harness material or product alternatives on a larger scale.

4. Emerging technologies drive improvements and sustainability

Emerging technologies, such as AI, blockchain, and IoT are enabling new business models that can drive value chain improvements and sustainability.

AI is enabling predictive maintenance in chemical plants to improve uptime and reduce unplanned downtime by providing real-time information on equipment performance with an aim towards optimizing operations.

The use of digital technologies can empower materials innovation and expedite low-cost formulations by evaluating, optimizing, and assimilating ingredient recipes and domain knowledge from multiple sources onto one platform for easy access by users all over the world.

Conclusion

The chemical industry has come a long way since its origins in the 19th century. It has seen many changes in technology, operations, and business models over the last hundred years. The pace of change is only increasing as we enter an era where digitalization will redefine how we live and work for generations to come.

Want to prepare for the future of your business? Contact us today.