Chemical | Process Industry
In today's rapidly changing business landscape, it is more important than ever to review your global manufacturing and distribution operations and supply chain in the process and chemicals industry. The end-to-end supply chain, operations, and footprint perspective must be taken into account to ensure your company's success both now and in the future.
Here are six key trends to keep in mind when reviewing your manufacturing and distribution operations:
1. Energy supply and reliability
Dependency on fossil fuels is a risk to both your business and the planet. Reliability of energy supply and volatility in energy costs have a major impact to the costs of goods sold. It's critical to look at de-risking energy dependencies and considering renewable energy sources and energy efficiency improvements to reduce costs and emissions.
2. Sustainability
Consumers and stakeholders are increasingly demanding sustainable and eco-friendly products and practices. Companies that prioritize sustainability will have a competitive advantage.
3. Compliance
Increased government regulations are placing pressure on businesses to ensure that their operations comply with environmental and safety standards. Failing to meet these regulations can result in significant financial and reputational risks.
4. Feedstock availability
Companies must ensure that they have access to the feedstocks they need to produce their products. This means reviewing supply chains and considering alternative sources and optimizing inbound flows of feedstocks.
5. Offsetting Higher Costs
With rising costs in many regions, it is essential to look for ways to improve profitability through smarter operations and supply chain decisions including better production allocation between assets and understanding the true cost to serve including transportation, order management, re-packing and alike.
6. De-risking and Balancing
Sourcing and Manufacturing: Companies need to strike a balance between low-cost regions and other geographies, while also prioritizing sustainability in their decision-making. This is amongst others done by looking more closely at company’s manufacturing footprints and by thoroughly selecting new locations for future investments. The availability of the right quantity and quality of talent is a key factor in this in current labor markets.
To ensure success in today's market, you must review your manufacturing and distribution footprint as a key lever. By doing so, your company can mitigate risks and identify opportunities for growth and optimization. Footprint strategies involve optimizing locations, suppliers, and production processes to achieve the best possible balance of cost, quality, and sustainability.
In conclusion, taking a holistic approach to reviewing your global manufacturing and distribution operations and supply chain is crucial for success in the chemicals process industry. By prioritizing energy efficiency, sustainability, compliance, feedstock availability, and smart decision-making, you can achieve profitability and growth both today and in the future.
