With over 15,000 chemical manufacturers in the market, the large manufacturers account for over 80% of chemical production. Though large manufacturers enjoy economies of scale, profitability remains closely tied to efficient operations. As energy often accounts for over 30% of the total costs, chemical manufacturers must compete effectively by making the most out of a seemingly limited field of choices. As such, focus has turned to leveraging plant locations, optimizing the use of automation, and mitigating supply chain disruption.
Some manufacturers own and mine the raw materials and minerals materials needed, but many enter long-term supply contracts that specify quantities and prices. The terms of these agreements and the dependence upon these suppliers can significantly influence profitability and supply chain disruption risk. For example, ammonia needed for nitrogen fertilizer can undergo price swings of +/- 500% and availability restrictions. Insight into the internal or external organizational supply chain is required to gain efficiency and mitigate risk.
Developing countries in Africa and Asia, for example, show significantly higher demand for chemicals. With a high value-to-weight ratio, chemicals are often traded and transported globally. This has offered large manufacturers the opportunity to move production facilities either closer to the raw material sources, or closer to the end market – leading to newer global supplier management requirements and oversight.
With globalization, chemical manufacturers face increased regulation for each country they manufacture in, transport through, or market to. Each of these countries has differing standards, laws, and penalties – which change constantly. Dealing with large amounts of toxic and waste materials, manufacturers have been forced to optimize collecting and managing supply chain information in order to comply with the large variety of regulations, whether OSHA, EPA, DOT, REACH, or other. Without oversight and control, these organizations are quickly exposed to large fines for infractions and even complete plant shutdown.
HICX understands the pressures that the chemical industry faces. Our products are designed to streamline global supplier enablement and management, monitor supplier performance, audits, and risk at all levels of the supply chain, and oversee information collection and reporting for all global and regional regulations.
Whether for basic, commodity, or specialty chemical production, our solutions can facilitate compliance with GMP, OSHA, EPA, REACH, ISO, and other quality and safety requirements. Plus, they can improve operational efficiency and transparency.