How to build a global business decision-making system in the chemical industry to create refined management capabilities

When it comes to the chemical industry, it is actually not unfamiliar to us. Chemical products (petrochemicals, agricultural chemicals, chemical medicine, polymers, paints, oils and fats, etc.) have penetrated into every aspect of our lives, and have a huge role in driving many industries such as electronics, home building materials, textiles, equipment manufacturing, agriculture, aerospace and aviation. It is an important industry in the national economy.

The status of chemical industry is very important, but chemical enterprises are not having a good time.

Most of the domestic chemical enterprises are some low value-added, backward production capacity traditional type enterprises, digital foundation is weak, with the market supply and demand on both sides of the uncertainty increases, the original rugged way of business failure, most chemical enterprises lack the resilience to resist market risks, operating under great pressure.

According to public data, as of the first three quarters of 2021, there were 273 companies listed in the A-share chemical industry, of which 24% had a net profit of less than RMB 100 million and 10% were in the red, with the industry as a whole making meagre profits or even losses, and chemical companies are in urgent need of transformation.

Chemical industry profits are meagre or even loss-making, and 70% of listed companies have not deployed digitalisation

Chemical industry demand is unpredictable, response speed can't keep up with market changes and missed opportunities

In recent years, the chemical industry has become increasingly competitive, requiring good quality, fast delivery and good prices, which has put pressure on production and delivery. In addition, the chemical industry is subject to upstream and downstream fluctuations in business volume.

For example, the recent rise in international energy prices, coupled with high shipping prices, has put chemical companies under pressure to control costs; on the other hand, due to the international local situation, the prices of some chemical products (such as fertilisers) have soared, and market demand is changing rapidly. Specifically, chemical companies are currently facing challenges in the following areas.

Front-end supply, with a complex range of chemical raw materials, volatile bulk futures prices, diverse material demand and supply batch constraints, complex allocation methods, large differences in demand between different production lines, and the difficulty of co-ordinated planning for enterprise procurement and supply.

The middle section of production, continuous production, production capacity is expected to be full, but there are fluctuations in demand, coupled with environmental protection policies, power restrictions and field logistics and other factors, how to match market demand, reasonable allocation of production capacity, production of the right type of products to maximize revenue.

Back-end sales, one-way flow of information, lack of sharing and synergy of information between departments, fragmented plans of each department, and inability to see the overall operating situation; how to achieve optimal results with available resources and the shortest time to enhance revenue and support growth.

These challenges have placed higher demands on the quality of business decisions in all aspects of the overall situation of chemical enterprises, such as production resource allocation, production scheduling tracking, process refinement management, marketing system and production and sales synergy. The traditional business decision-making approach based on business rules + empirical decisions can no longer meet the needs of enterprises and more intelligent decision-making mechanisms are urgently needed.