Overview of the Chemical Industry
Over the years, stakeholders in the chemical industry have started focusing on core competencies and realigning their product portfolios to extend their value chains and pursue growth opportunities. Despite the political uncertainty, the global chemical production will be determined by the developments in China, which currently accounts for a majority of the production globally. The chemical industry at large comprises of a diverse and complicated set of products ranging from commodity chemicals, specialty and fine chemicals, and agriculture chemicals. Since the majority of the chemical products are derived from oil and natural gas, the prices of these products fluctuate based on the demand and supply of the products. Also, with relative higher barriers in the competitive environment, leading chemical suppliers have to rely on the manufacturing units to effectively meet the consumer’s demands. Although the chemical industry is facing promising growth with the ongoing mergers and acquisitions, several factors may hinder the growth of the industry.
Here are some of the factors influencing the growth of the industry:
Changes in competition: The chemical industry is witnessing an increase in the competition with the entry of numerous players from Asia. The rise of emerging players especially in Asia and the Middle East has led to the deconsolidation of the chemical industry. Also, it becomes necessary for the players to refine their marketing models to stay competitive.
Increasing economic volatility: In the recent years, the global economy is susceptible to crises due to events such as European E-coil outbreak, the Arab Spring civil uprisings, and the Japanese earthquake. To overcome such challenges, leading organizations are developing stringent strategies to deal with high-impact economic volatility and gain a strong foothold in the chemical space.
Rise in technological innovations: With the latest innovations taking place in the chemical industry such as horizontal drillings and fracturing, dedicated players are facing pressures to stay updated with the current technologies. Also, the rising demand from the automotive, construction, and pulp production segments is further driving the demand for products in the chemical space.
To address these challenges and meet the demands of the end-user segments, organizations are leveraging supplier risk analysis solutions. Supplier risk analysis is the systematic approach to identify, assess, and mitigate supply risks in the chemical space. Supplier risk analysis aims at reducing vulnerability and ensuring proper continuity in the supply of products in the chemical suppliers space.
The Business Challenge and Our Journey
The client, a prominent chemical supplier, wanted to identify, assess, and mitigate supplier risk and gain better visibility into the supply chain process. The client wanted to seek ways to profile the prominent chemical suppliers and devise a risk segmentation analysis to evaluate each supplier. With the help of a supplier risk analysis solution, the client also wanted to ensure that the chemical suppliers are appropriately monitored and managed throughout the supplier lifecycle. The primary concern of the client was to refine their existing supply chain model and streamline the supplier process to reduce the time-to-market for the products offered.
To cater to the business requirements and ensure better delivery of the products, the supplier risk analysis experts at SpendEdge carried out an extensive research methodology. The methodology comprised of interviews and discussions with leading stakeholders in the chemical industry. To gain a comprehensive edge of the supplier landscape, the experts also compiled information from a wide array of secondary sources including paid industry databases, company presentations, and government bodies in the chemical suppliers space.
SpendEdge’s supplier risk analysis solution helped the client revisit the risk models and develop more accurate insights into the risks associated with the chemical suppliers. The solution also ensured real-time insights into the supplier performance from the manufacturing of the products to the delivery of the same to the target audience. The client also gained adequate insights into the supplier contingencies and was able to offer better visibility into the supply chain patterns into the chemical suppliers space.
Key questions answered in this supplier risk analysis include:
The supplier risk analysis engagement offered by SpendEdge sought ways for the client to reduce the time-to-market for the products offered. The client was able to eliminate the potential bottlenecks such as delays in the launch of major products and services, disruption in supply, regulatory penalties, and environmental health and safety concerns.
To know more about our supplier risk analysis solutions