Protecting Profitability in a Congested Supply Chain Market
Protecting Profitability in a Congested Supply Chain Market
Heads of supply chain must find solutions to reduce congestion and maintain supply chain profitability in a volatile economy. Production for some has been halted at points this year, there has been an increase in customers cancelling orders, and transportation costs have increased. All of this has had a massive impact on the profitability of the chemicals supply chain. Maintaining profitability will only come from successful innovation, and heads of supply chain must act quickly.
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Advanced forecasting technology is enabling chemical manufacturers to optimise their supply chains and remain cost-efficient. Excess and slow-moving inventory can be reduced by enhanced identification. Heads of supply chain can navigate volatile prices of raw materials by increasing visibility across the E2E supply chain and streamlining where possible.
The essential role that an optimised supply chain can play in driving profits can be seen in Evonik’s great start to 2022. Despite an increase in costs, Evonik exceeded its first-quarter targets in 2022 and increased its EBITDA by 25%.
Attributing their recent success to “operating world-scale production facilities”, Evonik was able to “ensure reliable and cost-effective delivery” worldwide. Combined with increasing inventory in the event of surge demand, optimising the supply chain to enhance delivery efficiency has been critical in Evonik’s extremely profitable first quarter.
Chemical tracing systems are being increasingly implemented by heads of supply chain to drive profitability. By integrating advanced data analytics from different stages of the production process, products can be traced from their source to the end customer.
Chemical tracing systems are being increasingly implemented by heads of supply chain to drive profitability. By integrating advanced data analytics from different stages of the production process, products can be traced from their source to the end customer.
With providers such as Signum Solutions, costs associated with complaints and returns can be reduced, as information on materials and suppliers are given in real-time. Ultimately, chemical tracing systems enable heads of supply chain to have greater visibility over their production processes, should customer complaints or queries occur.
The best chance of securing profitability comes from innovation. Success will depend upon implementing innovative solutions which cater to the specific needs of the chemicals manufacturing supply chain. For heads of supply chain, the challenge is implementing the right solutions that can protect profitability, whilst navigating complexities caused by congestion.
Do not miss out on cutting-edge insights into the chemicals supply chain industry by downloading the latest LogiChem event agenda here.