Digitization Trends in the Chemical Distribution Industry
Earlier this year, The National Association of Chemical Distributors (NACD) conducted a study to see how chemical distributors fit into the larger economy and how their efforts to enhance safety compare to other industries. The project yielded some pretty interesting findings which were published in ICIS annual special report of Top 100 Chemical Distributors.
The report illustrates chemical trends and mentions how the first months of the year have been rather positive for chemical distributors. The industry experienced growth by consolidation, mergers and organic growth. But the more interesting findings focuses on high potential areas for growth that distributors ought to be looking into. This includes circular economy, corporate social responsibility and more importantly, digitization.
The ICIS report also gave a brief overview of how digitization is revolutionizing the chemical industry, with top CEOs discussing its impact on their firm. CEO Steve Holland of Brenntag, the world’s largest chemical distributor, notes the rise of digitization and the company’s move to invest in a new digital platform. David Bradley, CEO of Nexeo notes also the large role digitization is playing in the transformation of the chemical distribution industry, by providing suppliers with “unprecedented transparency” through the ability to view data on the company’s centralized platform.
Chemical distributors today are embracing digitization as it offers not only a business model to achieve operational excellence by creating bigger efficiencies in the supply chain, but also good opportunity to rethink relationship with customers. The industry has witnessed some improvements in the areas of product development and formulation, implementing inventory control and efficiently scheduling deliveries, but more opportunities remain in the area of digital technology.
Business models are rapidly changing, today’s business is all about speed. Distributors need to make necessary adjustments to market conditions to achieve goals, optimize inventory and control cash flow. This can be achieved through a digital enterprise businesses management solution such as Sage X3 (Sage Enterprise Management) ERP for the chemical industry, which combines advanced distribution, warehousing, CRM, and accounting functionality with features specifically tailored to chemical manufacturers and distributors. For suppliers to maintain their financial and economic position, and remain competitive, they need to keep stepping up the game with cutting edge technology.
Having access to much needed and potent sources of information provide suppliers with new set of tools to improve bottom line. This information creates new opportunities to reach new customers and market. Through digital technology and a centralized platform, distributors have access to market intelligence which includes, pricing trend, competitive dynamics for products, customer trends and buying patterns, inventory levels and forecast.
Digital technology delivers operational efficiencies across the value chain. Bolstered by the capabilities of a digital enterprise businesses management solution, chemical suppliers can reduce costs, improve productivity, and significantly boost performance.
Interested in learning more about how digital technology can generate value for your chemical enterprise? Contact us.