The chemicals industry is one of the largest industries that delivers materials and substances that are used as intermediate goods in different sectors such as automotive, pharmaceuticals, and agriculture among others. Every industry faces sourcing and procurement challenges, and the chemicals industry is no exception. The chemicals industry perpetually struggles to procure the right raw materials at the right quantity and price in time. Besides these sourcing and procurement challenges, the chemicals industry witnesses supply-side and demand-side bottlenecks in spite of the recent development in the chemicals raw supplies market across the globe. To be able to combat the prevalent sourcing and procurement challenges, the chief procurement officers (CPOs) must understand the market landscape and recent developments that affect the organizational agenda.
Key Sourcing and Procurement Challenges
The chemicals industry encounters several sourcing and procurement challenges, such as pricing issues, complex product requests, transportation costs, and taut production systems. The chemicals companies require procurement intelligence solutions to gain actionable insights to counter the high-pricing volatility in the market. Being a niche segment, the players in the chemicals industry often receive requests for complex products, making it difficult to deliver the desired results. Besides, the chemicals companies have legacy based production systems, which makes it more difficult for the organizations to adopt the latest market trends and technology. Apart from these, the major impediments in the chemicals industry are the high transportation costs, lead times, supply risks, and volatility.
Chemicals Industry – Overcome the Sourcing and Procurement Challenges
The present chemicals supply chain lacks effective measures to check supplier sustainability and preventive measures to assess supplier health and improve supply chain transparency. To overcome these challenges, the CPOs must make use of supplier risk management to identify the supplier portfolio that best-fits the organization’s objectives, offers additional savings, reduces process risks, and obtains materials on best terms. Procurement intelligence offers insights to CPOs to devise an effective procurement strategy that helps in optimizing the purchase strategy, boosting the bottom-line, minimizing overall spend by 10% and finding solutions to overcome the sourcing and procurement challenges.
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