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Chemical sector seeks transparent supply chains, ecosystem partnerships

Chemical sector seeks transparent supply chains, ecosystem partnerships

3 min read


Chemical sector seeks transparent supply chains, ecosystem partnerships


This article is sponsored by Deloitte.

The chemicals and materials industries have faced numerous challenges in 2020, but they have also adapted and found new opportunities. Leaders are rethinking their supply chains and finding ways to make them more resilient. The sustainability of their products and processes has also become more important, as has digitalization across their organizations. 

SmartBrief asked Deloitte what advice they have for industry leaders. What follows are the combined answers from David Yankovitz, a principal at Deloitte, and Dr. Robert Kumpf, a Deloitte specialist executive.

Given that global supply chains are curtailed due to the pandemic, what steps could help assure US distribution and supply links are well managed?

Chemical companies experienced a rapid shift in demand patterns due to the coronavirus, which impacted regional and global supply chains. While the pandemic presented many companies with a new immediate requirement for product, other companies experienced the opposite. Supply chains lacked transparency and some firms struggled to locate product and fulfill orders.

Chemical companies can best meet emerging demands by creating resilient and transparent supply chains that are aligned with global and regional partners. This is not likely to be a one-size-fits-all approach, as there may be new patterns within the supply chains, and rather a new understanding of the application space and how they can focus on both regional and global demand. 

David Yankovitz

Taking an application-backed view can prepare companies to better manage their supply chains. Looking forward, sustainability and circularity are likely to continue challenging companies to rethink and redesign their supply chains to support a more circular economy. 

Sustainability awareness is at an all-time high. What opportunities exist for companies today and in a post-coronavirus world? What challenges may companies need to overcome?

Deloitte recently explored the impact of the coronavirus pandemic on the chemicals and materials sectors through conversations with CEOs, executives, presidents and R&D leaders in the paper The shifting landscapes of chemicals and materials. Perhaps surprisingly, sustainability was one of the trends identified by many executives as an area of increased focus and a trend that may likely accelerate. 

The opportunity for companies to address sustainability today may be ecosystem partnerships to achieve a more circular use of materials. Companies can also look towards bio-based materials, mitigation of their carbon footprint, conversion of plastic waste back to monomers, and better energy management in production and transportation.

One of the main challenges we’ve heard from companies is that no single company or single sector can address the challenges of sustainability. Companies may improve most by taking an application-back point of view, which focuses on end-market applications.

Dr. Robert Kumpf

After years of investment, digitalization was truly tested in 2020. What challenges, as well as opportunities, were created? Are there digital advancements companies should anticipate?

Among certain players within the chemical industry, the coronavirus helped identify challenges inherent with processes that require a physical presence Innovation, R&D and technical service teams all historically required being onsite to complete their work, which made turning to a digital workspace exceptionally challenging. This has made companies rethink “a day in the life” of one of these workers. 

Overall, it has made sector executives consider digital systems that recognize workflows and pull relevant reports or external publications. Specifically in the lab, investments in machine learning, in-silico (computer-based) experimentation and robust databases can accelerate the shift towards a vision of a digitally enabled scientific method.