The global chemical industry caters to nearly every goods-producing sector and accounts for an estimated USD 5.7 trillion, as per the International Council of Chemical Association (ICCA) report published in March 2019. According to the report, the chemical industry contributes to global Gross Domestic Product (GDP) through indirect, direct, and induced impacts, equivalent to 7% of the overall world's GDP, and supporting around 120 million jobs worldwide. It is offering materials and substances to sectors such as agriculture, automotive, construction, and nutrition.

The chemicals market is currently transforming post-COVID-19 pandemic, so chemical companies need to adopt new technologies in their operating models, businesses, and processes. In the global chemical industry, the supply chain management will face new challenges and new opportunities.

Therefore, it is critical to understand key developments in the chemicals market and the resulting impact on the individual supply chain. Only then will companies have the proper preparation to face these challenges and seize the opportunity to create a long-term competitive advantage.

Key Supply Chain Challenges in the Chemicals Industry

Market & Competition
Ongoing high-cost pressure caused by intensifying global competition
Opportunities for organic growth continue to slow down owing to saturated western markets while value chains move to the Asian Market
Customer Demands
Decreasing product importance due to commoditization, dematerialization, and deflation
Increasingly complex customer demands with differentiated service levels and request profiles
Emerging Technologies
High complexity and dynamics in the chemical industry demand environment generate vast quantities of data
Unlike in other industries, the impact of digitalization in the chemical industry is more of an evolution than a big bang
Future Prospects for Chemical Industry Supply Chain

Many companies have business endurance plans in place, and chemical companies have survived major storms, trade wars, market downturns, political disruption, and other calamities. However, the sheer magnitude and complexity of today's COVID-19 crisis demand immediate action to revive the chemical factory and business operations with updated methods like how chemical companies do business, not only for the short-period but also for an extended period. This crisis isn't going to go away in a shorter span. Recovery will be a long with many challenging paths. The very idea of business as usual will have to change and it has to be integrated with the latest digitalized technologies. Those who build resilience with balanced cost and growth strategies during the pandemic and adapt quickest to the new market reality will be best placed to capitalize on the global chemical industry opportunities that recovery from COVID-19 will bring.


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