Challenges for Speciality Chemicals Players

The increasing business and operational complexity faced by specialty chemicals producers is a threat to both customer satisfaction and profitability if not properly managed.
Some of the key challenges are:
Shifting business portfolios – The specialty chemicals landscape is being continually transformed through rapid product diversification and heavy merger and acquisition activity. Company business portfolios are constantly changing as producers add and divest divisions, enter new markets and participate in mergers. Combined with the well-established trend towards globalization, this shifting landscape has increased the complexity of company business portfolios.
Uncertain demand patterns – Specialty chemicals producers face uncertain and unpredictable demand patterns with limited visibility of future customer orders. When compounded with growing customer portfolios spanning many end-use markets, visibility into demand variability represents a key challenge for specialty chemicals producers.
Expanding product portfolios – Specialty chemicals producers continue to innovate their products in order to maximize differentiation, increase customer loyalty and enter new markets. The combination of new product introduction and frequent adaptation of existing products has resulted in a significant expansion in the number of products produced, leading to higher operational complexity.
Moving closer to customers – The trend of moving closer to customers is well established within specialty chemicals, with producers offering both customer-tailored products and customer-specific service arrangements. While the increased customer intimacy has been a source of differentiation for producers, it has also increased the complexity of their operations.
Multi-stage manufacturing operations – Specialty chemicals manufacturing operations have grown in complexity as producers utilize multi-product, multi-stage batch processes to produce advanced products with extensive bill-of-materials requirements.
Compliance – The ability to document and certify both product quality and procedural compliance is a growing issue for specialty chemicals producers, whether it is driven by government regulations, end-use
market requirements or specific customer requirements. Requirements for batch and lot level traceability are becoming common in many segments and add further complexity to operations.