Digital Transformation In The Chemicals Industry (Digitalist)
Scientists conducting test in laboratory --- Image by © Monty Rakusen/cultura/Corbis

Digital Transformation In The Chemicals Industry (Digitalist)

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Knowde Take:

Nice concise summary of the various challenges facing the modern chemical industry and some of the technologies that can be used to drive value in the face of those headwinds.

The chemicals industry is more than a single industry. It is a group of industries that produce a wide range of products across many unique segments. Base chemicals, paints, beauty products, fragrances, and food flavorings all face pressure due to rapid changes in digital technology, consumer demand, and global competition.

In the past, large producers dominated the market. These large producers valued operational efficiency over flexibility and adaptability. Today, the market is challenged by niche players that strongly focus on consumer demand. These players have prompted incumbents to differentiate themselves by producing smaller batches for individual customer needs and selling services, experiences, and outcomes, while being early adopters of digital technology at the business core.

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The Future Of Sales And Marketing In The Chemical Industry (Digitalist)
30 May 2012, Marbella, Spain --- workers checking water quality --- Image by © Chris Sattlberger/Blend Images/Corbis

The Future Of Sales And Marketing In The Chemical Industry (Digitalist)

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Knowde Take:

This is a great reminder that operational efficiencies can only take a company so far.  Applying technology to Marketing and Sales means producers can reach more customers and reduce cost-to-serve.

The chemical industry is at a crossroads. Faced with market unpredictability, increased regulations, and products that are quickly moving toward commoditization, it is becoming increasingly difficult to maintain reasonable margins. A few companies are finding success by developing breakthrough products, but true revolutionary innovations are hard to uncover.

Instead, most chemical manufacturers have responded by reducing costs with operational efficiencies. One area that is often overlooked, however, is sales and marketing. This department continues to deploy traditional approaches to selling, despite rising expenses. In fact, a recent study from McKinsey indicates that average sales, general, and administrative (SG&A) costs increased by as much as 10% over the last decade.

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Demystifying Digital Marketing And Sales In The Chemical Industry (McKinsey)

Demystifying Digital Marketing And Sales In The Chemical Industry (McKinsey)

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Knowde Take:

This article provides the best possible motivation for industry stalwarts to further develop their digital capabilities: cost savings AND topline growth. And for those willing to act quickly, the potential to displace the competition.

Digital can give chemical companies the power to unlock more than $200 billion of new value by reducing cost to serve, improving pricing, and for fast movers, capturing growth from competitors.

Over the past decade, the chemical industry has enjoyed remarkable success, delivering more shareholder value than its upstream suppliers, downstream customers—and, indeed, the global equity market as a whole.

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The Chemical Industry Is Innovating (PwC)

The Chemical Industry Is Innovating (PwC)

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Knowde Take:

We’re excited to see that chemical producers are looking to adopt a long-time trademark of successful B2C companies: Innovating to optimize customer experience.  We agree it is critical to maintaining a competitive edge in the highly fragmented and increasingly commoditized chemical industry.

In our work with chemical companies, we see the critical impact of innovation close up every day. Why is innovation so important? It helps chemical companies address their customers’ challenges.

Chemicals innovation is helping the industry’s customers get more productive and more sustainable. Ultimately, it’s having a profound impact on the daily life of consumers. Nearly every good manufactured—96%—is touched in some way by chemistry.

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Digital Transformation In Chemical Industry Is Here (World Economic Forum, Accenture)

Digital Transformation In Chemical Industry Is Here (World Economic Forum, Accenture)

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Knowde Take:

The World Economic Forum and Accenture collaborated on this truly comprehensive paper on the many ways that digital technology will impact, improve and challenge the chemical industry as well as the frequent disconnect between the understanding and acceptance of the benefits of digital vs. the execution of effective digital initiatives.

Digital transformation is emerging as a driver of sweeping change around the world. Connectivity has shown the potential to empower millions of people, while providing businesses with unparalleled opportunities for value creation and capture. The Chemistry and Advanced Materials industry played a leading role in previous industrial revolutions, through its products and innovations, in areas such as pharmaceuticals, plastics and consumer electronics.

Today, the Chemistry and Advanced Materials sector is an important enabler of the Fourth Industrial Revolution. Its contributions allow other sectors to turn ideas and innovations into sophisticated products supporting digitalization. But the industry itself is also being transformed through digitalization. Digitalization helps increase productivity and safety across the industry’s value chain and supports the design of new offerings.

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Chemicals Industry Getting Ready For Next-Generation B2B (Accenture)

Chemicals Industry Getting Ready For Next-Generation B2B (Accenture)

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Knowde Take:

This article from 2015 nicely summarizes the reasons why it is imperative for the chemical industry to provide an e-commerce experience that meets the needs of today’s buyers who are shaped by their experiences as consumers.  We’d love to know what customers think about the progress made over the last few years…

In the chemicals industry, electronic business-to-business (B2B) interactions between buyers and sellers typically rely on tools and techniques that have been in place for years.

Those tried-and-true approaches work, and they have brought greater efficiency and speed to transactions between companies and their business customers.

However, things are changing. Soon, the industry’s current approach to B2B—which traditionally focuses on sales transactions— may not be enough. Evolving technology and business practices and the changing expectations of chemical-company customers are quickly raising the bar for the industry’s B2B practices.

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Digital In Chemicals: From Technology To Impact (McKinsey)

Digital In Chemicals: From Technology To Impact (McKinsey)

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Knowde Take:

We love the way this article includes the impact of digital technologies on the markets served by the chemical industry.  Remaining relevant means continually evolving to meet the needs of your evolving customer base.

What are the major opportunities from digital in chemicals, and what must leaders do to capture them?

There is a lot of excitement about the potential of digital1 in chemicals, just as there is about digital across society in general. We believe that digital will have a significant impact on many areas of the chemical industry, with the potential to change value chains, lead to higher productivity and more innovation, and create new channels to market. Given all the excitement about digital, it is essential to separate the substance from the hype and carefully evaluate what this will mean for the industry.

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Using Marketing Analytics To Drive Superior Growth (McKinsey)

Using Marketing Analytics To Drive Superior Growth (McKinsey)

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Knowde Take:

Great introduction to the “art” of analytics; the different approaches and how they can be applied alone or in concert to effectively measure ROI.

Companies have so many analytical options at their disposal that they often become paralyzed, defaulting to just one tool. But an integrated marketing-analytics approach is the key to driving growth.

There’s no question that the development of better analytical tools and approaches in recent years has given business leaders significant new decision-making firepower. Yet while advanced analytics provide the ability to increase growth and marketing return on investment (MROI), organizations seem almost paralyzed by the choices on offer. As a result, business leaders tend to rely on just one planning and performance-management approach. They quickly find that even the most advanced single methodology has limits.

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Introducing: The Knowde Blog

Introducing: The Knowde Blog

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Chemicals are everywhere.  They impact every market imaginable and are one of the largest industries in existence.  They’re also the result of cutting edge innovation by scientists and researchers that craft new chemistries to meet the changing needs of the world.

Surprisingly, until recently, the way the industry conducts business had changed little from the days of 3-martini lunches, relying heavily on outside sales people, belly-to-belly meetings and other archaic methods that fail to meet the needs of modern chemical buyers.  In fact, the chemical industry was one of the few holdouts that largely eschew e-commerce and believe a strong web presence consists of a company web site…that is about to change.

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The New Normal: Online Transparency

The New Normal: Online Transparency

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Despite the lack of US federal regulation, personal care powerhouse, Unilever, has voluntarily disclosed the fragrance ingredients included in all individual products sold in the U.S. and Europe.  The information was posted online starting in 2017, including explanations of the ingredient types in “What’s in Our Products” sections on Unilever websites.

Why undertake a costly, time-consuming and not legally necessary project of this nature?

As a savvy and socially-aware producer of consumer goods, Unilever has recognized that today’s consumers hold suppliers to a different and arguably higher, standard.  They are digital natives that expect total information transparency and demand social responsibility.  They won’t buy products from companies they don’t trust and they have $200B in buying power!  As Forbes writer, Kira Karapetian, so succinctly put it, “The Path To Millennial Spend Is Paved With Transparency”.

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