How Chemical Companies Compete in the Digital Economy

Transcription

1 White Paper Reimagine Your Enterprise How Chemical Companies Compete in the Digital Economy Innovate Competing with a Digital Ecosystem Improving Global Supply Chain Performance 1

2 About the Author Brian Everett Chemical Industry Solution Principal As an Industry Solution Principal at itelligence, Brian Everett is responsible for North American demand generation, sales, and solution development activities in the chemical industry as well as actively participating in itelligence s Cloud Innovation Center Program. He has been with itelligence for seventeen years and working in the SAP ecosystem for twenty-one years. Prior to working as an Industry Solution Principal, Mr. Everett has held the itelligence positions of Director of Mid-Market Solutions, Project Manager, Manager of Industry Solution Development, and Application Management Support Manager. He also has industry experience in manufacturing, consumer products, automotive, professional services, and life sciences. Mr. Everett started his career at Andersen Consulting (Accenture) as a consultant, where he was involved in implementing the SAP R/3 software package in the chemical and manufacturing industries. These on the ground experiences have been carried forward and provided the foundation for growth as he has progressed through his career. Mr. Everett has a Bachelor of Science degree from Miami University (Ohio) with a concentration in marketing and statistics (1996) and a Master of Business Administration from the University of Cincinnati with a dual specialization in Finance and Management (2005). Hobbies include running, biking, golf, and playing saxophone in a community band. 2

3 Table of Contents Executive Summary 4 1. Competing with a Digital Ecosystem 5 2. Improving Global Supply Chain Performance 6 Summary and Conclusion 8 3

4 Executive Summary Digital Economy The growing digital economy continues to take hold around the globe and introduces new challenges for the chemical industry. Major shifts in regional demand and supply bases, geopolitical risks, mergers and acquisitions, and growing regulatory requirements are just a few factors also impacting business models for chemical producers. As the industry evolves in new and unexpected ways, many companies need to recognize and better understand the risks and opportunities associated with the digital economy. For those chemical companies that take advantage of the opportunities, significant value will be created in the form of improved supply chain performance, greater business agility with clearer insights and enhanced customer experiences. Enabled by new digital technologies and increasingly powerful mobile devices, customers gain instant access to information and now expect chemical companies to create more personalized experiences and new services to complement product sales. As a result, chemical companies are pressured, now more than ever, to leverage digital capabilities that deliver top line revenue growth and bottom line cost savings. A recent Accenture report supports this dynamic by highlighting that 58% of chemical companies are embracing digital to gain competitive advantage over industry peers. 1 In addition, Accenture indicates in a separate report that 87% of chemical executives believe that companies failing to embrace digital face extinction. 2 87% of chemical executives believe that companies failing to embrace digital face extinction. 2 Chemical companies differ from other industries that can simply enhance customer expectations by pushing data to an mobile device. In the case of chemical organizations, a high degree of emphasis will be placed on leveraging Internet of Things (IoT) and real-time digital platforms that better identify customer consumption patterns and improve supply chain activities. With new connected manufacturing processes and unprecedented access to information, chemical companies will find themselves in an environment where they can fully assess their products, markets, customers, technologies and other factors to develop an effective digital strategy. New digital capabilities will also allow for accelerated and safe chemical innovation by bringing new levels of analytics and collaboration in support 1 Footnote: The Chemicals Industry: Getting Ready for Next - Generation B2B, Accenture, Footnote: Digital future for B2B interactions in chemicals industry, Accenture,

5 of research and development efforts. As customer s expectations increase, it s important for chemical companies to gain customer insights to boost profitable growth and build customer intimacy. Chemical companies across the industry including specialty, commodity and diversified chemical organizations need to master their organization s digital transformation for continued success in today s digital economy. 1. Competing with a Digital Ecosystem The Digital World By deploying a digital platform and adopting a more digitally enabled approach, chemical companies can place customers at the center of their operation and explore new possibilities in customer interactions. While customer focus is not a new idea, making it happen requires that chemical companies uncover, collect and act on customer insights gathered through a variety of digital avenues. As a result, you can differentiate your offerings by providing real-time order status or by working more closely with customers to rapidly customize products. For many chemical companies, maximizing customer insight will require new technology, larger data repositories, advanced predictive analytics, real-time visibility and effective sensor technology. This approach helps companies develop innovative products and value-added services that better align with customer needs and result in improved margins, new revenue streams and stronger customer relationships. Figure 1: Comprehensive view of the customer and product life cycle influences product direction and builds customer loyalty. In this digital age, chemical businesses have the ability to access deeper customer insights and gain a comprehensive view of the customer and product life cycle. This greater visibility extends well beyond just the activities at the time of purchase and can help a company influence new product direction to ultimately provide customers exactly what they desire. After the purchase, companies can increase loyalty by treating customers with unparalleled service and the offering of additional value- 5

6 added services after the sale to enhance customer relationships. In many cases, the sale of chemical products and value-added services involves the challenge of enabling salespeople, channel partners and customers to accurately, reliably and quickly configure an order along with the terms of shipping, installation, packaging and more. For many companies, this is an error-prone and manually intensive process filled with exceptions that consume scarce time and money to resolve. With an enhanced customer-centric approach, specialty and commodity chemical companies can better link customer-facing processes resulting in improved process efficiency and an enhanced customer experience aligned with the service level agreements established. As an example, a paint company based in China developed an analytics platform that combines customer and market information from a variety of sources. This effort has resulted in a 360-degree picture of customer behavior that helps the company anticipate market trends, support new product innovation and deliver products that better match customer needs. By using deeper insights to create customercentric experiences, chemical companies can also shorten sales cycles, boost selling channels, increase customer satisfaction and reduce costs. 2. Improving Global Supply Chain Performance Chain Reaction Embracing a digital transformation is an impactful supply chain trend seen in recent years. In today s far-flung global and complex business environment, chemical companies are no longer strictly dependent and reliant on their own efforts. Success is now heavily dependent on effectively coordinating a complex network of supply chain partners located around the globe to meet the needs of various customers that include distributors, OEMs, retailers and end customers. Figure 2: Complex network of supply chain partners located around the globe help meet customer needs. 6

7 By adopting a holistic view of your global supply chain partners, from raw material suppliers, transportation partners, retailers and others, companies can further maximize supply chain performance. According to AT Kearney, Supply chain managers see greater transparency leading to better decision making as the main benefit of going digital. 3 What occurs between the individual links in the supply chain can quickly determine if products are available when and where desired by customers. Furthermore, supply chain information like inventory availability and shipment status can be collected digitally and shared immediately with customers to further enhance the relationship. By boosting digital supply chain capabilities, costs are cut and product availability improves as trading partners gain enhanced data access, data sharing, collaboration and analytics. Supply chain managers see greater transparency leading to better decision making as the main benefit of going digital. 3 Supply chain imperatives for chemical firms are no longer just about efficiency, quality and cost competitiveness, though all three remain highly important. Leading supply chains are quickly moving forward with abilities to sense and respond customer demands for specialized products and services. With customers more informed than ever before, firms need to make this digital transformation while complying with high standards for social, ethical and environmental compliance. As an example, more than a few chemical companies have employed digital strategies to more flexibly work with suppliers and partners to quickly connect with suppliers and rapidly shift to alternate sources of supply when required. Additionally, a manufacturer of agricultural chemicals has engaged itelligence to deploy a consistent SAP S/4HANA solution with faster access to information across multiple international locations. As a result, more accurate and timely supply chain information will help supply chain trading partners and customers improve product quality and reduce agricultural waste. For leading chemical companies, migrating their supply chain from analog to digital means dissolving functional silos and deploying new operational methods starting with demand signals that integrate product innovation, planning, sourcing, production and logistics strategies. This transformation requires embracing new digital technologies, while at the same time boosting new supply chain collaborative capabilities that maximize performance with internal and external global supply chain trading partners. 3 Footnote: European A.T. Kearney/WHU Logistics Study, 2015 Footnote: 3 European A.T. Kearney/WHU Logistics Study,

8 Summary and Conclusion itelligence successfully helps chemical companies digitally transform their business. In order to compete within the new digital economy, a number of elements must be brought together along with the ability to manage new customer and operational data for developing an effective digital strategy. As you gain additional insight into customer behavior and business operations, chemical firms can build effective digital business strategies for capturing new revenue growth and cutting costs around the globe. Figure 3: Effective digital business strategies capture new growth and cut costs around the globe. itelligence also allows companies to benefit from advanced technologies like SAP S/4HANA. SAP S/4HANA is a unified platform that natively and seamlessly connects on-premise and cloud-based services for chemical manufacturers operating worldwide assets. Discover how SAP s Cloud Platform and itelligence s expertise can successfully boost your organization s ability to compete in today s digital economy. 8

9 Find out More... For more information For more on how itelligence can help your enterprise capitalize on the possibilities of digital transformation, click here to request a discovery call or contact us at Follow itelligence Group North America: This white paper outlines our general product direction and must not be relied on in making a purchase decision, as it is not subject to your license agreement or any other agreement with itelligence. itelligence has no obligation to pursue any course of business outlined in this white paper or to develop or release any functionality mentioned herein. This white paper and itelligence s strategy for possible future developments are subject to change and may be changed by itelligence at any time for any reason without notice. This document disclaims any and all expressed or implied warranties, including but not limited to, the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. itelligence assumes no responsibility for errors or omissions in this document, except if such damages were intentionally caused by itelligence or its gross negligence. 9

10 About itelligence In the digital age, you need an IT partner you can rely on. Someone who understands the digital and real-life challenges of your industry and helps you rethink your business. A partner who is with you every step of the way. With over 25 years experience, itelligence knows SAP software inside out. We work closely with our clients to identify their specific needs and fulfil them. Numerous SAP awards, certifications, and our SAP Platinum Partner status are testament to our success. From consulting to implementation and managed services, we have over 5,000 employees with the expertise to take your business further. As part of the NTT Data Group, we can draw upon a global network of over 9,000 SAP specialists. And our presence in 24 countries around the world ensures we are always close to your business. What s more, our strong ties to SAP mean we stay up to speed with the latest innovations and can help you get more from them. No matter what industry you are in we are the IT partner for your digital transformation. Think ahead. Go beyond. Visit for more information. itelligence North America Headquarters Reed Hartman Highway, Cincinnati, OH marketing@itelligencegroup.com