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.
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.
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.
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.