Operational excellence is a worthy goal for any company. For organizations that set out on this journey, it is impossible to overstate the importance of gaining visibility across the supply chain from start to finish.
Successful businesses are making the transition from being enterprise-focused to becoming customer-centered, and supply chain visibility will give them substantial advantages over their competitors. These advantages include improved order fulfillment rates, better customer service, increased profits, enhanced revenue growth, and a boost to operational efficiency.
While supply chain management is critical for every organization that relies on partners and suppliers, it is essential for companies in the chemical industry. There is more global competition, and the demand for quality is increasing. Add to that all of the complexities involved with chemical production, and there is added pressure on companies to ensure that their supply chain management is efficient and effective.
An enterprise resource planning (ERP) software solution is a significant step towards operational excellence. It is a proven method for helping organizations understand the challenges of their industry and to use technology to improve their performance.
Why are chemical companies vulnerable to supply chain pressures?
The vast market for chemicals is global. The growing competition from the Middle East and Asia is making it difficult for American chemical manufacturers to retain market share, let alone experience growth. Staying competitive with pricing is challenging, and the costs of raw materials and commodities are unpredictable. Managing the volatility and reflecting any changes in their pricing is complicated and requires companies to make real-time decisions.
Without complete transparency throughout the supply chain, chemical companies will be at a disadvantage in understanding current costs, anticipating future costs and pricing, and recognizing supply and demand issues. Excellent supply chain information is invaluable throughout the entire organization, from sales, marketing, and procurement to finances, production, and customer service.
What can chemical companies do to stay in the game?
It’s easy enough to say that chemical companies must change the way they operate, but there are some specific steps they can take, along with the tools they need to move forward. Here are some suggestions that go beyond a mere starting point.
- Improved alignment of supply chain segmentation with customer demands and business needs
- New products that have been optimized
- Warehouse and transportation consolidation
- Optimal inventory management
- Improved forecasting and planning because of segmentation
- Optimized capacity usage to maximize operational usage
- Full compliance with regulatory obligations
- A responsive approach to the needs communicated by customers
- Better distribution and placement of products
- Data analytics that facilitates better decision-making in real-time
Transparent supply chains and a focus on innovations and continuous improvement will allow companies to come up with better products, improve customer service, and operate at peak efficiency.
What role does an ERP system play in providing a solution for any industry?
ERP software provides tools that produce improved insights, reporting, and results. ERP solutions assimilate data and reporting across the entire organization, resulting in higher sales, better customer service, accurate scheduling, inventory management, and on-time deliveries.
With all the data generated from sales, production, and suppliers, manufacturers of all types can collect and store information, apply thorough analytics, and provide reports and recommendations that help managers and workers to make better decisions.
The path to operational excellence is continuously changing (COVID-19 is proof of that!), and the mentality of any organization should be geared toward continuous improvement. The days of inefficient paper-based systems are in the past. A new ERP software solution, or an upgrade from an older one, can no longer be viewed as an option. Instead, it is imperative for making your manufacturing processes lean and efficient and boosting your efforts for operational excellence.
At Decision Resources, Inc., we have been helping chemical manufacturers, and manufacturers across industries, get the most from their business systems and technology for more than 40 years. Leverage our ERP Consulting expertise to help you gain valuable insights into your supply chain, boost your operational efforts, and manage your production effectively and efficiently. Contact us anytime.