Given the challenges set in motion by COVID-19, organizations within the chemical manufacturing industry have become even more vulnerable to disruption than they were prior to the pandemic. Between the current economic situation and the instability of supply chains, the industry is under a great deal of pressure – especially companies that process raw materials.
The Environmental Protection Agency (EPA) has made a number of changes this year that will affect chemical manufacturers. This includes a framework between the EPA and the Occupational Safety and Health Administration (OSHA) to evaluate exposure to new chemicals in the workplace. With tightening regulations — as well as serialization, end-to-end tracking and other evolving legal requirements — chemical producers may find that generic enterprise software solutions can’t meet their specific needs.
Manufacturers need a solution that streamlines process implementation while allowing for change and minimizing risk every step of the way. This requires real-time batch control, formulation management, quality control and more.
Specialized enterprise software that’s tailored to chemicals industry requirements can offer centralized data management, complete process control and overall resilience.
With the right enterprise resource planning (ERP) technology, organizations can get a closer look at their current inventory and better predict the amount of raw materials they’ll need in the coming months. More than three-fourths (76%) of chemical manufacturers say the cost of raw materials is the primary business challenge they currently face, according to the National Association of Manufacturers’ Q1 2021 Outlook Survey. On average, manufacturers anticipate prices will rise more than 6% over the next 12 months, but a quarter of manufacturers expect prices to rise as much as 10%.
Industry-specific ERP enables enterprises to plan ahead and purchase the necessary materials today, before an anticipated price hike, which will save them money down the line. Conversely, if prices are expected to fall, they can use that same technology to measure current inventory levels to determine if they should wait for the price to drop before placing another order. Epoxy resins maker Copps Industries, for example, was able to double its customers, triple sales and cut outsourced IT support by 20% using a comprehensive ERP solution built specifically for their industry.
The challenges that chemical manufacturers face are not going anywhere. It’s time to adopt specialized solutions.
Scott Deakins is chief operating officer at Deacom.