The chemical industry is dynamic and will change rapidly over the next few years. New trends are creating a new wave of disruption in the chemical industry. This is challenging companies’ strategies. The chemical industry, Bisley Australia requires companies to adapt quickly to meet new challenges and to maintain a competitive edge. Today, the chemical industry is no longer dependent on factors like intellectual property, customer proximity, and technology know-how. Below are the major trends expected to drive the chemical industry over the next few years, based on market research?
- Circular Economy
Companies must consider the scarcity of raw materials when planning their strategic strategies. In a traditional linear economy, resources are used and disposed of. In a circular economy, resources are utilized to the maximum extent possible and then disposed of. Resources are recovered and products are regenerated at the end of their service lives. Because of its ability to reduce energy and resource consumption, the circular economy is being adopted on a local, regional, and global scale.
Modern technological advances such as in-memory processor power and the ability to store almost unlimited amounts of data at a low price offer exceptional levels of granularity and connectivity. They also allow for fast access to, processing, and analysis of large quantities of data. Machine learning, the Internet of Things, and block chain are all helping to accelerate digitalization in the chemical industry.
Chemical companies require a business plan and an IT foundation to maximize their digitalization potential. This includes a solid core system and an innovative system. These two systems must be integrated on a single platform to enable rapid scaling of innovations and optimize business value for the entire company.
- Accelerated Globalization
Emerging market players are developing new business models, concepts, and processes. Innovators are quickly catching up to incumbents due to their speed and responsiveness, rapid commoditization, and shrinking lifecycles. They are creating new products and services, as well as new formulations.
Chemical companies have to come up with new ways to stay competitive in a dynamic, pressurized global marketplace. Many companies are looking at digital solutions to improve their business processes and achieve this goal through a digital lens. They make large investments in digital solutions, applying them to demand planning, sales, and supply planning. The goal is more collaboration, better integration within and outside of the company.
- Mergers and Acquisition
Mergers and acquisitions have played a major role in the growth strategies of chemical companies over recent years. The end of mega-deals that cost billions of dollars is coming in the chemical industry. After the closing of several large deals, companies are more inclined to focus on smaller divestments or acquisitions that target specific portfolio inadequacies. These will deliver quantifiable short-term and long-term results. Mid-sized companies are likely to buy some of the non-core assets from the next mega-companies in the chemical sector’s next wave of mergers and acquisitions.
- Emergence of new business models
Businesses are moving towards automation and operational excellence as a way to build new business models. Companies can now realize the potential of digital technologies, such as “touch less order fulfilment” and “lights-out manufacturing”, which are both commercially viable and scalable.
Companies will need a strong foundation to allow these new business models to flourish. This foundation should include a 4th-generation platform for IT infrastructure, business processes, and a skilled workforce. The Internet of Things, machine learning and block chain will not thrive in a vacuum. They should be embedded in our thinking and our processes.