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Ace the Challenges of Chemical Industry Together with SAP and Gloitt

Updated: Apr 4, 2021

The history of chemical manufacturing can be traced back to the times when chemicals were manufactured manually in traditional ways. The establishment of chemical manufacturing as an independent industry can be attributed to the emergence of the Industrial Revolution. Since then, there has been no looking back. Like any other industry, the chemical industry has undergone a tremendous transformation over the years.

Business Challenges

With new ways, come new business challenges. Let us see, what the challenges of the chemical industry are and how an ERP solution has been able to combat those industry-specific challenges:

Real-Time Data Analysis

The chemical industry is heavily dependent on data processing and analysis. Thus, one of the major challenges that the chemical industry faces is that that of real-time data analysis to be able to monitor and remediate the processes. Real-time analysis of data in chemical companies is not only needed for analyzers to provide measurements to manufacturers but to be able to conduct quality checks accurately and frequently at different stages. Poor data management can lead to delayed production and further can be a cause of decreased revenue. Data management becomes multi-fold complex in chemical companies. Therefore, an ERP solution in chemical companies holds paramount importance. An intelligent ERP like SAP can give actionable insights on real-time data with its built-in system. With SAP solutions, chemical companies can get real-time insights and track chemical formulae which could be used to make judgments about variation, quality, and cost.

ERP solution for chemical industries

Inventory Control

Inventory management is at the center when it comes to manufacturing and process enterprises. Further, constantly changing markets and increasing product demands make inventory management even more complex. With an industry like that of chemicals, certain guidelines need to be followed to ensure the right ways of handling and transportation. About inventory, there has been a reduction in days of inventory by 12% - 15% with the help of SAP solutions. Further, SAP, being an integrated system, has proven to reduce total logistics costs by nearly 10-15%. SAP solutions have been able to optimize the cost of capital using real-time inventory and predictive stock.

Compliance and Regulations

Chemical companies have to completely abide by regulatory compliances that govern the use, production, material, and packaging of chemicals. Any slight miscalculation or negligence in label printing can cause damage to not only customers or consumers but the environment at large. Limited capabilities to respond to changes in regulatory compliance and legislation can lead to a high risk of supply chain disruption.

Thus, an ERP solution for chemical industries is much needed to have comprehensive management of all the processes. With the right ERP tool, chemical firms can not only comply with existing regulations and run efficiently but can smoothly accommodate new regulations. If a chemical company has the right tool to simulate the ecological footprint and new regulatory requirements on revenue, it can very well mitigate the risk of supply chain disruption and can be compliant and efficient.

ERP solution for chemical industries

Operations Management

Chemical companies often face difficulties in understanding the potential impact of an event on the downstream processes. One of the major reasons for this is the lack of integration between operations and management systems. Often companies are not able to find the best possible solution to a problem because there is no integrated and comprehensive model of solutions available.

In such a scenario, only an ERP solution can help in identifying the trends for advanced analysis. SAP has proved to combat the lack of operations management by using the key of “integration”. It acts as a dedicated solution to optimize its operations along with innovation and resource utilization leading to reduced process cycle times up to 10%, faster response time, reduced cost up to 15%, and support for new business processes up to 20%.

SAP Solutions for Chemical Companies- Some Statistics

  • Benefitted more than 6500 Chemical companies

  • Faster project management (70%-80%)

  • Lesser production overtime costs (up to 48%)

  • Increased new product revenue (10%-20%)

  • Better on-time delivery (10%-30%)

  • Lesser R&D expenses​(10%–15%)

  • Lesser manufacturing cost​(1%‒5%)

  • Lesser manufacturing cycle time (Up to 10% ) ​

  • Lesser service and maintenance costs (10%–15%)

  • Lesser inventory days (12%–15%)

  • Lesser logistics cost​(10%–15%)

  • Increased customer satisfaction​(10%–20%)

  • Lesser cycle time for financial forecasting and reporting​(25%–50%)

  • Lesser procurement function costs​(10%–15%)

  • Lesser cycle time for financial forecasting and reporting​ up to 25%–50%

SAP Solutions for Chemical Companies - A Case Study

SAP Solutions have proved to be a game-changer for many mid-sized companies and large enterprises. A briefcase study would bring forth the contention. A global chemical firm that was already able to do automation of around 70% of its invoicing was looking to automate its invoicing process within a complex supply chain like that of different regions. This challenge could only be met with an ERP solution like SAP. Once the implementation was done, the firm was able to capture real-time data throughout the supply chain network. Data analytics and machine learning together were able to automate the processes and simplify the invoicing and payment processes. As a result, the company was able to automate approximately 94% of the processes which helped it to drastically reduce risk and improve accuracy.

Why Gloitt?

Gloitt, with a track record of 27 years in delivering software solutions has the expertise and experience to optimize and implement SAP solutions in a way that minimizes risk and increases efficiency. Gloitt has got refined expertise that spans over 14 industries and has a client base of 900+.

Thus, no matter at what stage your company is positioned in terms of growth and profitability; you do need a technology partner to turn opportunities into business!

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