Tag: chemical industry

Chemical industry

Reducing Overall Spend by Efficiently Operating Asset-Heavy and Inflexible Production Systems for a Chemical Company

Chemical Industry Overview

Despite facing immense pressure from a multitude of sources, the chemical industry in the US has continued to perform spectacularly. To keep up with changes, companies in the chemical industry have devised strategies to manage feedstock volatility and handle prices drops driven by key buyers in industries such as automotive and construction. This case study is a classic example of how we helped a leading company in the US chemical industry to identify opportunities and take advantage of changing market conditions while addressing their key purchasing and procurement challenges.

Key Challenges Faced by Companies in the Chemical Industry 

  • Fluctuating prices of raw materials and commodities.
  • Strict compliance requirements from governments and regulatory bodies.
  • Obtaining and consolidating data on the pricing and quality of raw materials from suppliers

Business Challenges Faced

The client is one of the leading companies in the US chemical industry with an annual revenue of approximately 7 billion. However, feedstock was taking an average 40% of the company’s total costs and the client was falling victim to feedstock price volatility. They were facing problems in predicting supply costs and finding suppliers who can ensure availability of reasonably priced chemicals while meeting stipulated quality standards. The client, therefore, approached SpendEdge to eliminate the possibilities of undesirable risks by shifting them through contracting, financial hedging, and internal operational choices.

Key objectives the client aimed to achieve through this engagement were:  

  • Reduce operational costs by ensuring the availability of petrochemicals needed by the client to create chemical products.
  • Identify suppliers who can offer chemicals of the required grade at favorable terms at correct time.
  • Address customers’ request of niche products to suit particular end uses or to meet diverse local regulations.

Our Research Approach

The experts at SpendEdge understood that high-quality raw materials were imperative for the client to produce high-quality end-products. Any compromises made at the procurement stage will result in customer dissatisfaction. Therefore, they decided to source chemical supplies from global markets. They obtained detailed market intelligence information on the supply market and supplier landscapes from specialized databases.

 The team at SpendEdge also identified and selected the best cost sourcing locations, where the cost of raw materials were significantly lower. At the same time, the team ensured that that raw materials procured were meeting the quality standards laid down by the client and the stipulated delivery schedule.

When looking for alternative sources for their chemical requirements, the experts analyzed different markets and rising trends in the chemical industry. They provided detailed insights to keep the client aware of developments in the global chemical industry to negotiate better terms with suppliers. They also tracked the emergence of new suppliers to help the client identify opportunities to reduce costs and establish multiple sources of requirements.

 The experts also gained a thorough understanding of the business model of suppliers who were providing chemicals to the client. They obtained in-depth insights into different cost structures and pricing policies to work on a cost-plus pricing strategy. This enabled the client to minimize costs and procure the best quality suppliers.

Engagement Results and Benefits

Since the purchasing expenditure of the client was equivalent to 30% of the total sales revenue, the solutions provided helped the client to explore new resources such as low-priced US shale gas coming to the market. This reduced the overall spend of the company by 10% and identified products that were strategic and critical to the company’s operations. This helped the client to profitably operate their asset-heavy and inflexible production systems.

Gaining a better understanding of the production costs and suppliers’ capabilities, helped the client to make key decisions regarding the form where they wanted to obtain the key inputs. As obtaining some materials in a dry state instead of as a solution, decreases the weight and volume of the product and   reduces transportation costs substantially.

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Leading Carbon Black Manufacturers in The World

What is carbon black? 

Carbon black is a form of paracrystalline carbon powder, which has a high surface area-to-volume ratio that contributes to its electrically conductive properties. It is produced from the incomplete combustion of heavy petroleum substances such as FCC tar, coal tar, and ethylene cracking tar in a controlled environment. Typically, carbon black contains more than 95% pure carbon with minimal quantities of oxygen, hydrogen, and nitrogen. It is predominantly used as a reinforcing filler in tires and other rubber products. It is also extensively used in plastics, paints, and inks as a color pigment. The size of the spherical particles of carbon black has a direct impact on its blackness and dispersibility. The smaller the size of the particle, higher the blackness of the particle.

According to SpendEdge’s latest carbon black procurement market intelligence report, the rise in automobile sales will significantly contribute to the growth in this market. Furthermore, with the sales in the paints and coatings segment beefing up, we can expect a consequent spike in the black carbon market.

carbon blackTop manufacturers of carbon black

Cabot

Cabot Corporation is a leading performance material and specialty chemicals manufacturer. Cabot is headquartered in Massachusetts, USA. The company delivers a broad range of products and solutions including transportation, infrastructure, environment, and consumer. The carbon black manufactured by Cabot is known to provide color, conductivity, and ultraviolet (UV) protection for specialty applications such as coatings, plastics, toners, and printing inks. Cabot is the world’s largest producer of carbon blacks and offers specialty product lines such as BLACK PEARLS, ELFTEX, VULCAN, MOGUL, MONARCH, EMPEROR, and REGAL carbon blacks.

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Popular Suppliers in the Global Sodium Thiosulfate Market

Sodium thiosulfate is a colorless crystalline inorganic compound that is produced mainly from liquid waste products of sodium sulfide and sulfur dye manufacturing. This substance has a wide range of industrial applications including iodometry, photographic processing, medical applications, and gold extraction. This inorganic salt is also known to have several medical uses. Sodium thiosulfate is used to reduce some of the side effects of cisplatin (a cancer medicine). It is also having proven application in the emergency treatment of cyanide poisoning.

SpendEdge’s procurement intelligence report on the global sodium thiosulfate market provides in-depth information on the market drivers, growth dynamics, procurement best practices, key suppliers, and several other vital insights on the sodium thiosulfate market.

sodium thiosulfate

Top sodium thiosulfate suppliers

Merck KGaA

Merck KGaA is a leading science and technology company. Their expertise lies in healthcare, life science, and performance materials. The company offers specialized and high-quality products in healthcare, life science002C, and performance materials. The company is headquartered in Darmstadt, Germany.  Merck KGaA holds the rights to the name and the trademark “MERCK” internationally except for the United States and Canada. In the US and Canada, the company operates in the biopharma market as EMD Serono, in life science as Millipore Sigma, and in the specialty chemicals and high-tech materials business area as EMD Performance Materials.request proposal

Cellmark

CellMark, a leading global supply chain service company provides products, services, and solutions to customers and suppliers all over the world. The company facilitates trade and business development across multiple industries with their vast network of local offices and professional expertise. Cellmark was founded in 1984 in Gothenburg, Sweden.

Esseco

Esseco is a family owned Italian industrial chemical group that is focused on inorganic chemical products such as sodium thiosulfate and winemaking industries since the year 1920. The company is focused on identifying new applications for their products and services such as food preservatives, food, and animal feed integrators, medicine and personal hygiene products, chemical fixatives for photography and radiology, and several mRequest Demoore. In 2003 with a joint venture between two leading sulfur dioxide derivative producers, Esseco Srl, and General Chemical, Esseco USA LLC was formed.

Solvay

Solvay is a Belgian company that was founded in the year 1863. It is an advanced material and specialty chemicals company, committed to developing chemistry that addresses key societal challenges. The company’s products are used in batteries, planes, cars,  smart, and medical devices. The company’s key areas of expertise include consumer goods, healthcare, automotive, aerospace, resources and environment, agro, feed and food, electrical and electronics, building and construction, and other industrial applications.


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IR15

Top 4 Ways Digitization Can Transform the Chemical Industry

Today, digital and technology transformations are two of the most popular buzzwords. However, beyond the industry jargon, the need for next-generation technology has increased as it pushes industries, businesses, and boundaries. The chemical industry is known to be one of the most conservative and slow industries. Therefore, there is a real need to innovate and produce results faster now than ever. The digitization process has the potential to become a strong competitive differentiator that the chemical industry cannot ignore. Companies in the chemical industry follow a methodical approach to business. This is the real reason behind companies facing challenges when it comes to implementing a digitization process to bring about efficiency in their business model. Today, chemical companies are taking digital initiatives to improve their performance and growth rate, but does this mean that they are able to take advantage of digitization and its opportunities? The answer is No! Companies in the chemical industry should analyze the advantages of digitization to understand its impact on their business processes.

We at SpendEdge, with the help of our industrContact USy experts, have listed out a few advantages of digitization that companies in the chemical industry must look into to realize the difference they can bring about.

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Achieving Successful Strategic Procurement in the Chemical Industry

Strategic procurement is a plan that is crafted with the sole objective of achieving goals that may be quite far off in the distance, such as five or ten years into the future.  A strategic procurement strategy not only helps come up with short-term solutions but rather involves coming up with strategies that will serve the long-term purpose. In any organization, strategic procurement plans are created by top-level management and the same applies to firms in the chemical industry. A strategic procurement plan also influences the tactical procurement plans that are developed and implemented.  It is a comprehensive plan that takes into account the targeted objectives and needs of the procurement department of the firm. Strategic procurement is one of the most significant tools that helps in maximizing the valuerequest proposal contribution of any company. It serves as a guide for any organization and should be updated regularly at the interval of a year to ensure its alignment with the overall business strategy.

In this blog, the procurement experts at SpendEdge explain some of the strategies for developing a successful strategic procurement plan for the chemical industry.  (more…)

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Category Management Enables a Leading Fine Chemicals Manufacturer to Enhance Service Efficiency – A SpendEdge Case Study

Engagement Overview:

The client, a pioneer in the fine chemicals manufacturing segment, was looking at achieving breakthrough value by focusing on category management. The client wanted to devise powerful, long-term category management strategies that are aligned with the stakeholder’s and corporate’s objectives. To identify and focus on the key category management strategies, the chemical industry client approached SpendEdge to help them leverage it’s strong expertise in category management to address challenges arising due to their inefficiency in category management.

The category management engagement entailed the use of a detailed quantitative analysis of various categories within the supply chain to identify and benchmark the best suitable category management strategies.

About the Client:request proposal

A multinational chemical industry firm specializing in the manufacturing of fine chemicals.

Business Challenge:

The omnichannel environment in today’s chemical industry was forcing the fine chemicals manufacturer to redefine their category management processes. Also, the dynamic nature of the chemical industry along with the availability of huge volumes of consumer data posed several new challenges, which accelerated the need for a major transformation in category management.

To overcome such challenges and devise multifunctional synergies across their global supply network, the fine chemicals manufacturer wanted to deploy an advanced category management strategy.


How did SpendEdge Help the Client?

  • Step 1: Grouping fine chemicals into various categories depending on the market demand

The initial step revolved around the process of defining the role of each category of fine chemicals and grouping them based on their market demand and usage. This helped the fine chemicals manufacturer to gain a better understanding of the various categories of fine chemicals. By doing so, the client was able to understand the importance of each value in terms of driving their profit margins.

  • Step 2: Devising appropriate category management strategies

Identifying the right category strategy is essential for any organization as it acts as a growth driver by increasing sales, improving market share, and enhancing return on investment. The category management strategies should, therefore, be fine-tuned to meet the category objectives. The adopted approach included a detailed assessment of the different categories to help the client develop precise goals and targets for each category to drive growth.

  • Step 3: A strategic three-step approach to fine-tune category management strategies and drive operational efficiency

The scrupulous three-step approach helped fine-tune the client’s category management strategies to ensure they meet their category goals and objectives. It also enabled the fine chemicals manufacturer to scrutinize their category management strategies to meet organizational goals, increase return on investments, enhance market share, and improve profit margins.


Key questions answered in this category management engagement include:

fine chemicals

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Benefits of the Engagement:

The category management engagement helped the fine chemicals manufacturer to identify category objectives and fine-tune their category management strategies. Our experts worked as an extension of the firm to identify the success factors that uncovered major opportunities within the fine chemicals segment.

Why is category management essential?

The growing competitive pressure in today’s chemical industry poses major challenges for players in terms of managing different categories to drive profitability. Moreover, the ongoing shift of power to the consumers along with its associated economics demands a precise category management approach that focuses on consumers’ needs and the strategies that have to be devised to fulfill the consumer needs and demands.

Due to such factors, chemical industry players are now looking at driving category sales through efficient category management. Since this requires the development of precise category management strategies, chemical industry companies are now approaching SpendEdge to leverage our market expertise in developing advanced category management programs to enhance their service efficiency and drive organizational value.

SpendEdge’s category management solutions are tailored to help chemical industry players enhance their market presence by devising effective category management solutions. Also, with the help of our category management solutions, it is now possible to align category management strategies with business objectives, which go hand in hand in helping you establish your brand as a true leader in the category by staying ahead of the curve.

Our Findings:

It is quite evident from this engagement that effective category management will eventually help you achieve the goals set for your brand. If your organization is on the lookout for an objective way to drive category growth, SpendEdge’s category management solutions will help you do so by being your roadmap to success. So go ahead and get in touch with our experts to build a category management capability that’ll help you enhance your market presence.


 To know more about our category management solutions and how it can help chemical companies

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IR25

Supply Chain Risk Assessment for a Leading Coagulants Manufacturer – A SpendEdge Case Study

Engagement Overview:

A leading chemical industry client specializing in the manufacturing of coagulants wanted to make their supply chain more resilient to maintain topline revenue growth. Owing to the complexity of their global supply chain, risk occurrence proved to be costlier. To enhance their supply chain risk assessment capabilities, the chemical industry client wanted to develop a risk assessment framework.  A detailed quantitative analysis of various categories within the supply chain was carried out to prioritize risks and develop an effective risk assessment framework.

About the Client:

The client is a leading player in the chemical industry, specializing in the manufacturing of coagulants that arerequest proposal supplied to the wastewater management industries across the globe.

Business Challenge:

The chemical industry client was facing challenges in devising an appropriate risk assessment frameworks that could be implemented across their coagulants manufacturing units.


How did SpendEdge Help the Client?

  • Step 1: Risk identification

The first step dealt with the process of supply chain risk identification. It included the creation of a draft list of major risks factors across their supply network.

  • Step 2: Probability assessment

The next step after risk identification is to assess the impact of risks and classify them based on their probability of occurrence. This helped the chemical industry client address several issues that affected the flow of information throughout the global supply network.

  • Step 3: Risk management framework

The supply chain risk assessment experts at SpendEdge devised a three-step risk management approach that helped the chemical industry client to gain a holistic view of risk factors and develop precise strategies to mitigate the impact or probability of its occurrence.


Key questions answered in this risk assessment engagement include:

chemical industry


Benefits of the Engagement:

The supply chain risk assessment solution offered by our experts helped the coagulants manufacturer gain an overview of various risk factors across their global supply network. Our solutions also assisted the chemical industry in detecting, gauging, and assessing the potential disruptions arising due to a variety of supply chain risks emanating from both external and internal factors. SpendEdge’s risk assessment also offered a detailed lifecycle of risk factors and acted as a tool that helped the client drive business value.

Why incorporate supply chain risk assessment?

The business risks posed by potential supply chain failures are compelling supply chain risk managers in the chemical industry to keep a close handle on their supplier relationships. An ever-growing range of strategic issues arising due to factors such as governance, corporate performance, and sustainability are pressurizing risk managers to include risk assessment as a critical aspect of their business processes.

SpendEdge’s supply chain risk assessment solution helps you to develop a responsive and bespoke approach to risk management. Our experts also offer recommendations that guide the development of appropriate tools and methods including the development of strategies that foster implementation, adoption, and enhancement.

Our Findings:

Supply chain risk managers are often well positioned to implement key measures to reduce risks associated with supply chain failures and to ensure superior supplier community performance. But to develop a robust risk assessment framework, different aspects of the supply chain need to be examined in detail. Moreover, implementing risk assessment as the main aspect of your business strategy helps enhance overall business value.

Risk assessment also covers various perspectives of both external and internal supply risks. It includes supplier failure, process breakdowns, poor component quality, and inadequate logistics and distribution skills.


To know more about our risk assessment solutions

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Spend Analysis Engagement: Offering Comprehensive Spend Visibility for a Leading Organic Chemicals Manufacturer

Engagement Overview:

A chemical industry client wanted to aggregate raw spend data from multiple sources across the organization including – ERP, procurement, accounts payable, and so on. To gain detailed visibility into their spend patterns, the organic chemicals manufacturer approached SpendEdge to devise a comprehensive approach to spend management by implementing spend analysis based solutions throughout their global supply chains.

A detailed quantitative analysis of various categories within the supply chain was carried out identify spend patterns and benchmark the best practices to be followed. Spend analysis also offered the foundation for making more informed business decisions. Also, the constant monitoring of variables that could possibly impact organizational spend resulted in the development of a robust spend management strategy. The variable included – consolidation within the sector, entry of new players, technological request proposal developments, and macroeconomic factors affecting the growth of the organic chemicals market.

About the Client:

A multinational company specializing in the manufacturing of organic chemicals. The client is a leading player in the chemical industry with several well-established subsidiaries operating in over 40 developed economies.

Business Challenge:

The organic chemicals manufacturer was facing difficulties in assessing spend patterns.

How did SpendEdge Help the Client?

  • Step 1: Identification and collection of spend data from several resources

Our spend analysis experts followed a structured approach to gather and consolidate spend data from different business units into a central database. It included data from sources like accounts payable, e-procurement systems, and general ledgers.

  • Step 2: Benchmarking of standardized processes

Implementation of spend management tools helped the client to benchmark best practices to be followed.

  • Step 3: Devised a three-step approach to analyze and group spend data

The scrupulous approach helped in the constant monitoring of spend data to identify potential savings opportunities and ensure adherence to contract terms.


Key questions answered in this spend analysis study include:

Organic Chemicals


Benefits of the Engagement:

Our spend analysis solution helped the organic chemicals manufacturer to break down the organization’s data silos and transform the gathered spend and contract data in an efficient and cost-effective manner. Our team worked as an extension of the organic chemicals firm to filter out irrelevant information and extract precise content to enhance visibility across various spend categories within the organic chemicals manufacturing space.

Why incorporate spend analysis solutions?

It is essential for organic chemicals manufacturing firms to break down their respective data silos to better identify collaborative procurement opportunities. However, since it is not possible to implement a common ERP or accounts payable system with same data structure throughout independent organizations, spend analysis offers an efficient and effective means to reach the desired result by aggregating data from several sources to provide the desired visibility.

Our Findings:

Procurement teams that effectively use spend analysis will be able to better analyze their spend patterns, which will eventually result in higher returns and superior business outcomes. Moreover, with the recent focus on cost reduction, leading organizations across sectors are focusing on enhancing their spend management capabilities.

Spend analysis is one main aspect of spend management that can have a profound effect on the supply chain and the process of analyzing an organization’s spend pattern. A spend analysis engagement offers enhanced visibility into an enterprise’s procurement spend, which subsequently allows the organization to consolidate both its suppliers and its spending.


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Supply Chain Risk Analysis to Gauge Supply Chain Performance – A SpendEdge Case Study for a Specialty Chemicals Company

Engagement Overview:

The client wanted to gauge the performance of their supply chain. To proactively address the growing complexities of their global supply chain, a specialty chemicals company approached SpendEdge to devise a comprehensive approach to supply chain analysis. A detailed quantitative analysis of supply chain was carried out to accurately forecast inventory and production needs of the specialty chemicals client.

Supply chain analysis enabled the client to integrate risk prioritization as a core strategy in their current risk management system. Following this, the specialty chemicals company redesigned their risk management system to uncover risk request proposal factors and include proactive risk mitigation strategies.

About the Client:

A multinational chemical industry client specializing in the manufacturing of specialty chemicals. The client is a leading player in the chemical industry with several well-established subsidiaries operating in over 35 developed economies.

Business Challenge:

The specialty chemicals company was facing difficulties in gauging the performance of their supply chain.

How did SpendEdge Help the Client:

  • Step 1: Developed a three-step methodology that offered a clear roadmap of the specialty chemicals space

Our supply chain analysis experts followed a structured approach to develop a supply chain management framework.

  • Step 2: Mapped the supply chain activities

This step involved the identification of activities, establishments, resources, and regulatory requirements that are required to create a flowchart to obtain an overview of the supply chain activities. It also offered details on the flow of raw materials and products throughout the supply network.

  • Step 3: Developed a framework to gauge the impact each factor involved in the supply chain

The final step involved the quantification of the supply chain activities and their contribution to the flow of materials both in monetary and physical terms. This helped the client to assess the importance of each factor impacting the overall performance of the supply chain.


Key questions answered in this supply chain analysis study include:

supply chain analysis


Benefits of the Engagement:

Our supply chain analysis solution helped the specialty chemicals company to analyze every stage of their supply chain activity, starting from the acquisition of raw materials or supplies from the suppliers to the delivery of finished products to the end-user segments. The primary objective of the supply chain analysis engagement was to determine the impact of factors affecting the supply chain and to deliver the finished products more quickly and efficiently to the end-users. Also, the supply chain analysis offered greater visibility into supply chain processes by establishing a cohesive relationship between all tiers of the supply chain.

Why incorporate supply chain analysis?

Supply chain analysis helps in the identification of supply chain activities or processes that can be bypassed to reduce inventory costs and improve forecasts. It also helps organizations to optimize their supply chain processes and minimize redundancy while assisting in the creation of enhanced value-added services.

Our Findings:

Supply chain analysis encompasses a wide range of functions that may seem daunting even to a well-established specialty chemicals firm. However, it can be effectively modeled by dividing them into several strategic areas. A supply chain analysis study that aims to determine current real-world practices in supply chain risks implies a radical takeoff from conventional models. 

It expects organizations to redefine their supply chain management strategies and adopt a continuous approach to detect supply-side risks, classify risks, and prioritize them to drive business value. Moreover, supply chain analysis is a process, which not only emphasizes on the shortcomings in various segments of the supply network but also between the supply chain and the end-users.


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Petrochemical Industry: A Category Management Engagement to Monitor Developments Across Direct and Indirect Procurement Categories

Engagement Overview

The client wanted to identify and capitalize on new opportunities. To enhance their product offerings by refining their product development strategies, the petrochemical industry client approached SpendEdge to help them gain an improved understanding of different supply chain categories, their customers, and disruptive forces across the industry.

To help the petrochemical industry client identify category-specific best practices, a detailed qualitative and quantitative analysis of different categories was carried out by the category management experts. request proposal The engagement also helped the client generate innovative business ideas, which, in turn, helped them to enhance their business efficiency.

About the Client

A world leader in the petrochemical industry space with business units spread across multiple geographies.

Business Challenge

The client was facing stiff challenges in enhancing their product development strategies.


How did SpendEdge Help the Client?

Step 1: Detailed inspection of customer needs across different categories to generate new product ideas

A detailed understanding of customer needs was obtained by implementing category management solutions. It included comprehensive insights that were obtained through an analysis of product development trends and product mapping studies.

Step 2: Developed a three-step methodology to tactically address the challenges across diverse categories

The experts followed a structured approach comprising of data validation, industry analysis, stakeholder reviews to develop an accurate product development strategy.


Key questions answered in this category management engagement


Benefits of the Engagement

With the help of the category management engagement, the petrochemical industry client eliminated irrelevant information and extracted precise content to deliver actionable insights to category managers. The engagement also helped the client monitor all the developments across the establishment’s direct and indirect procurement categories.

Why incorporate category management?

Category management helps companies to leverage the demand across the enterprise to achieve maximum savings. Moreover, the rise of globalization and growing technological advancements have resulted in the rapid evolution of procurement categories and business models across industries. This has made it obligatory for procurement professionals to leverage category management solutions and adopt a pro-active approach to category planning.

Our Findings

Today, category management entails access to comprehensive and timely insights to devise a precise category plan. Additionally, appropriate updates on category developments are essential to identify the early warning signals and curtail supply chain disruptions across business units. Furthermore, it is important to keep track of indirect procurement categories such as – HR, IT, finance, and logistics, which can lead to significant liabilities for companies.


To know more about our category management engagement

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