REVIEW GLOBAL MANUCHEM STRATEGIES 2012

From the 13th to the 14th of February, we.CONECT invited Managing Directors and leading Managers to the annual Global ManuChem Strategies 2012 conference in Berlin.
More than 65 attendees used the Global ManuChem 2012 conference to discuss about the current challenges, brand new...

17 Case Studies  |  3 World Cafés  |  Icebreaker Session  |  Challenge your Peers

Improvements in chemical manufacturing in a changing business environment

2012 will be probably one of the most difficult years to forecast for some time. Concerns remain about the changing business environment and the slowdown in the global economy. Global competition, maturing markets, over-capacity plants, increasing environmental pressure, and rising raw material prices continue to challenge the profitability of the chemical-industry. Customers are demanding lower prices and increased service levels, while competitors are getting smarter, leaner and expanding their global reach. New product lifecycles are shorter and competitors are entering the market faster. Energy and raw material costs have exhibited extreme volatility. Globalization is lengthening supply chains and increasing business complexity, while increased government regulation and scrutiny and greater product stewardship are increasing the amount of information required in the chemical supply chain, often at significant cost.

Listening to record profit announcements of the chemical industry around the globe, the economic crisis seems to be coming back faster than anybody imagined. As the chemical sector continues to feel the impact of the volatile economic business environment, executives and corporate managers have rarely faced such challenging and high stake business choices: How much should we cut capacity? Which plants should we make idle? How do we maintain the flexibility and grow resources?

To find answers to these questions is not easy. But clearly, winners in this environment will be the chemical producers with the most responsive supply chain and best in class excellence in manufacturing & operation units. The companies that took the opportunity to reshape their operations and business portfolios will be rewarded with much higher earnings and valuations compared with those that did not.

Therefore, operations excellence, from order to product delivery, will be critical for all producers. Cost management and control is required to help alleviate the issues and cost pressures that the chemical industry is currently facing in today’s business environment. Sustainable cost reductions and process excellence can be achieved through transparent management information and accountability. A strategic approach, focusing on both cost reduction and process excellence (and control processes) in parallel, will enable organizations to set the stage for, and perhaps self fund, more transformational activities.

Today, however, chemical manufacturers are recognizing that operational excellence relies not only on traditional technology, but also on the effective combination of emerging technologies, lean & six sigma and the role of the “human factor.” Over-emphasis of one aspect to the detriment of the other will limit an organization from achieving its true potential. Optimizing performance requires managers to have an in depth understanding of how products and customers consume resources and this is why manufacturers adopt more sophisticated cost and profitability analytics  - solutions that go beyond production and include the supply chain, support functions and infrastructure.

Added to these are new imperatives for sustainability and energy efficiency as chemical companies are under constant pressure to manage risk, customer relationships, health, safety, and environmental (HSE) issues. These challenges affect the way chemical manufacturers operate, and optimizing plant operations to reduce costs is a top priority for global chemical companies.

A suite of (software) tools & methods, such as MES, BI or an integrated automation infrastructure has been developed in order to fulfil both the technical and human requirements of achieving operational excellence. This emerging technology is available today and can be implemented to provide companies in the chemical industry with capabilities that improve visibility, manage events, and provide performance scorecarding and analytics for improving and understanding performance. This allows production and logistics processes to be synchronised so that, at any time, products are quickly and cost efficiently delivered which contributes to maintaining a competitive edge.  Many leading chemical manufacturers recognize the need for a vastly improved and more global automation infrastructure than currently exists in even the most automated facilities. These companies need better tracking and tracing capabilities, cost-effective production management solutions, methods to maximize asset utilization and solutions for improving quality and safety.

Agile enterprise is always one step ahead of the competition, which cultivates a responsive environment and delivers major improvements in lead time, product quality, and lower production costs. The resulting increase in inventory levels, costs and savings, and the massive pressure from Asian competitors requires a thorough discussion of methods and tools to implement a strategic and sustainable production management in the chemical industry under the impact of global shifts in the market. 

The “Global ManuCHEM Strategies” will discuss these challenges and solutions with top executive and managers from all leading chemical companies from Europe and the US.

We look forward to welcoming you!

Your we.CONECT team