Success Factor Supply Chain Management and Logistics in the Chemical Industry 2024

Act Now to Prepare for the Industry’s Recovery!

What are key supply chain and logistics trends and challenges in the chemical industry? The 2024 study “Success Factor Supply Chain Management and Logistics in the Chemical Industry”, carried out by Miebach in collaboration with Solventure and Aimms, reveals latest insights. The study underscores the need for chemical companies to address supply chain and logistics planning and adopt digitalization and AI to be ready for future growth.

Cost Pressure Dominates, CO2 Neutrality Takes a Back Seat

In the face of a difficult economic climate, with rising energy and personnel costs, the study confirms that “increasing cost pressure on warehousing and transportation” has become the top concern for the chemical industry. This is mirrored by the widespread adoption of cost-cutting measures in response to declining sales and ongoing inflationary challenges.

Additionally, the study highlights the importance of “transparency through enhanced communication and close dialogue” as a near-equally pressing concern, with businesses recognizing the need for better visibility and coordination across their supply chains.

One of the most surprising findings is the low priority given to carbon neutrality ambitions, which, despite public commitments, was rated as the least important trend by participants.

Participants Not Fully Prepared to Meet the Challenges

The study reveals concerning gaps in preparedness across the sector. While nearly half of respondents feel well-prepared for enhanced transparency and communication, only one-third say they are ready to tackle rising cost pressures or adapt supply chains to specific customer needs. Many companies admit to only “working on” these challenges, with some acknowledging they are inadequately prepared.

Slow Adoption of Digitalization and AI in the Chemical Industry

Despite widespread buzz around digital transformation, the chemical industry’s adoption of digitalization and AI in supply chain management remains limited. The study found no respondents currently using digital twin technologies or planning to implement them in 2024, and similar results were reported for warehousing control towers. Tools like robot process automation and big data analytics have seen some early adopters, with more planning to follow in 2025. And two-thirds of the participants are planning to use AI for inventory optimization in the next year.

Strategic Planning Every 2 - 3 Years or On Demand, Traditional Tools Dominate

Strategic planning across the chemical industry occurs sporadically, often only every 2-3 years or on an on-demand basis, with many companies relying heavily on internal resources. More than 40% of respondents report using internal or external consultants for planning. The dominance of traditional tools like Excel and ERP systems suggests that advanced digital solutions are not yet fully integrated into day-to-day operations.

Time to Act: Preparing for Recovery

The chemical industry is at a crossroads. While companies acknowledge the need for more professional supply chain and logistics planning, their ability to act is currently constrained by limited budgets and resources.

We see significant potential for the industry to embrace digital tools and build more resilient, agile supply chains. The companies that take action now will be best positioned when business picks up again,” said Dr. Klaus-Peter Jung, Partner, Miebach.

If you are interested in the study report, please contact Ralf Hoffmann (e-mail: hoffmann@miebach.com) or fill out the form on this page.

Read also the article in CHEManager 3/2024: Link to the article