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"Are the challenges of an uncertain economy preventing you from focusing on sustained
profitable growth? Many midsize
chemical companies recognize that keeping up with pricing and margin pressure, regulatory compliance, and customer demand can keep them from managing their critical business objectives: differentiating through innovation and building economies of scale"
Source : SAP
Strategies for Profitable Growth: Chemical Industry
Chemical Industry and Profitable Growth is also known as :
Chemical Companies,
Chemical Manufacturer,
Chemical Marketplace,
Chemical Branch,
Chemical Industry,
Chemical Industry Leaders,
Chemical Engineering,
Chemical Industry Data,
Chemical Industry Council,
Chemical Industries Association,
Chemical Associations,
Society Chemical Industry,
Chemical Industry Trends,
Chemical Industry Databases,
Chemical Online,
Chemical Manufacturing,
Chemical Industry Directories,
Chemical Suppliers,
Chemical Industry Data,
Chemical Industry Corporation,
Sustainability Chemical Industry,
Technology Chemical Industry,
Chemical Industry Professionals,
Chemical Industry Production,
Enterprise Industry Chemicals,
Powerful Chemical Industry.
YOU’RE CONSTANTLY TRANSFORMING
TODAY’S CHALLENGES
Today, your business is constantly transforming. You’ve survived the slowdown
of the last few years, but what do you do now to stay competitive? Cost pressures
and customer demands present new challenges at each step in your supply chain.
But you can only cut so much. You must find new growth opportunities.
NOW WHAT?
STRATEGIES FOR SUCCESS
To relay what industry experts are thinking, SAP® Strategies for Profitable Growth
explores the most recent strategies, solutions, and best practices for each of the
more than 25 major industries served by SAP.
Each brochure in this series reflects the views of independent observers,
analysts, and other domain experts in a specific industry. Take a closer look at
these strategies, practices, and tools in the pages ahead, and consider how they
can help your business achieve profitable growth.
HIGHLY TARGETED SOLUTIONS . . .
SAP SOLUTIONS FOR THE CHEMICAL INDUSTRY
SAP supports the most important business processes in the chemical industry and
provides tools to help you understand and implement these processes effectively.
One of these tools is the solution map (shown below). Built using input from customers
and leveraging the expertise SAP has acquired through our extensive industry
experience, SAP solution maps are multilevel blueprints of processes defined for
specific industries. The solution map for your industry helps you visualize, plan,
and implement a coherent, integrated, and comprehensive information technology
solution. Furthermore, the solution map is integrated into a best-practices template
for the chemical industry. By referring to the solution map, you quickly understand
potential business solutions and the business value they can bring.
The SAP solution map for the chemical industry is available at
www.sap.com/solutions/businessmaps/
and then select Industry-Specific Business Maps.
WITH THE TOOLS TO SUPPORT THEM
SOLUTION MAP FOR CHEMICAL INDUSTRY
INTEGRATE BUSINESS PROCESSES
Pressure on margins increases every day. More products become commodities,
customers ask for more services, and feedstock prices fluctuate. At the same time,
stockholders expect financial performance improvement as demand rises.
Chemical-industry business managers need to analyze the impact of available
actions – price increases, product-mix changes, capital projects, or manufacturingprocess
changes – to make their best decisions.
RECOMMENDATION
Industry analysts note that leading chemical companies go beyond spreadsheets
and “islands of information” to integrate revenue and cost forecasts with current
inventory and plant data. Tools include materials requirements planning,
customer price and volume forecasting, and inventory planning systems.
WHAT SAP OFFERS
SAP offers an integrated ERP solution that adapts to changing business information
needs, and allows management to see the result of changes in their business,
such as sales volumes, selling prices, and manufacturing costs. Chemical-industry
solutions include sales and operations planning, customer relationship management
(CRM), supply chain management (SCM), and product life-cycle
management (PLM) solutions – all integrated with core mySAP™ ERP solutions.
STRATEGIES TO MAXIMIZE COST EFFICIENCIES
“Using a best-practices
approach, we consolidated
four legacy systems into
one; significantly reducing
inventory, overall operating
costs, and changing our
monthly closing from two
weeks to four days.”
Hanna Lukosavich, Vice President and CIO,
Resolution Performance Products
IMPROVE PLANT-LEVEL PROCESSES
Most capital investment and operations spending goes to production facilities.
But do you know which units are the most effective producers, based on usage and
quality standards? Are you producing to plan? How are maintenance funds being
spent? What is the total cost of all products with labor and overhead allocated?
RECOMMENDATION
Leading firms are implementing six-sigma quality management, statistical
process control, and other techniques using data from their ERP and plant-control
systems. Business data visibility via integrated ERP systems drives higher asset
utilization, lowers capital expenditures and operating costs, and delivers insights
into product, plant, and customer profitability.
WHAT SAP OFFERS
Business packages designed specifically for the chemical industry include
production planning and execution, batch and recipe management, predictive and
preventive maintenance, finished product and in-process quality reporting, asset
management, and environmental, health, and safety compliance, including
emissions management. SAP Business Intelligence (SAP BI) helps organizations
develop customized business intelligence analytics.
STRATEGIES FOR INNOVATING PRODUCTS AND SERVICES
“We used the best-practices
template from SAP, and
while we consider many of our
practices unique, we found
the preconfigured template
extremely valuable to our
implementation team, giving
them a basis for understanding
how a ‘generic’ chemical
company would implement
an SAP solution. The implementation
was on time, within
budget, and is providing many
of the benefits we expected.”
James S. Pall, Vice President – Logistics,
Stepan Company
BUILD CUSTOMER LOYALTY
Customers are more sophisticated and demanding than ever – on-time and
complete deliveries, high quality standards, and accurate billing are a given.
Customers also want customized labeling, “never run out” inventory
management, and rapid adjustments to their changing production schedules.
How can you keep up and still make a profit?
RECOMMENDATION
Leading chemical companies are installing real-time order-tracking systems,
just-in-time delivery capabilities, on-site inventory management services, and
regional and global account management information systems. Leading firms are
also segmenting their services to specific customers as a way to build customer
loyalty through improved service.
WHAT SAP OFFERS
The complete order-to-cash solutions from SAP cut across the many functions
that touch a customer order, and integrate with your financial systems.
Additional capabilities available through SAP solutions for CRM and SCM include
e-commerce, sales force automation, complaint management, warehouse and
inventory management, and customer analytics.
NOW YOU MUST INNOVATE ACROSS SUPPLIER AND CUSTOMER PROCESSES
COLLABORATE WITH CUSTOMERS AND SUPPLIERS
More and more, chemical companies are developing new products in close
collaboration with customers and suppliers. This can yield a competitive
advantage, since collaboration can accelerate product innovation and enable
real-time responsiveness to market changes.
RECOMMENDATION
Industry observers note that collaboration with customers and suppliers provides
better visibility into real customer needs and emerging trends. And collaborative
product development helps beat competitors to market with new products.
Customers and suppliers commit to work with one another, and align and improve
their business processes.
WHAT SAP OFFERS
SAP enables business collaboration with customers and suppliers by supporting
many scenarios. These include vendor-managed inventory and import/export
management with SAP Global Trade Services. In both scenarios, SAP software helps
align plant and work processes from recipe management through to production
and warehousing. The SAP NetWeaver™ platform offers numerous components that
make it easy to connect across your enterprise and out to your trading partners.
INCREASE FLEXIBILITY ACROSS THE SUPPLY CHAIN
Although a chemical company may have strong relationships with suppliers,
the entire supply chain may not be able to respond quickly to market changes.
Today, it is critical to align manufacturing business processes with suppliers, so
that the entire supply chain can adapt and respond.
RECOMMENDATION
Chemical-industry experts say that leading chemical companies go beyond
procurement agreements, fax machines, and e-mail by aligning business processes
with suppliers, ensuring that everyday demand changes are reflected in the
supply chain. They also tie together customer orders, finished-goods needs,
production planning, and raw material replenishment. The leading companies can
respond quickly, extending their business when they see new opportunities.
WHAT SAP OFFERS
SAP provides chemical-industry solutions for managing business processes across
the supply chain, as well as improving the ability to manage planning, sourcing,
scheduling, procurement, delivery, and accounting. As a result, chemical
companies can implement the best solutions to improve business processes with
suppliers, and can enhance flexibility to meet changing market demands.
STRATEGIES FOR INCREASING BUSINESS VISIBILITY
USE KPIS TO IMPROVE INFORMATION VISIBILITY
Whether you’re evaluating monthly business performance or determining new
business strategies, your success depends not only on what you know, but also
on how quickly you can find it out. The solution and the challenge are to build
toward a real-time enterprise.
RECOMMENDATION
Industry leaders are typically successful at developing and delivering relevant key
performance indicators (KPIs) to management on a timely basis. Sophisticated KPI
tools not only measure yesterday’s results, but also can signal warning signs in
leading indicators. These KPIs are then aligned with individual, group, and business
performance objectives.
WHAT SAP OFFERS
SAP Business Intelligence (SAP BI) offers a reporting tool with numerous
preconfigured templates that let business analysts download data into spreadsheets
for sorting and summarization. In an application such as sales forecasting, this data
can be uploaded into the SAP system to immediately assess the results of a changed
sales forecast.
ARE YOU READY?
STRATEGIES AT A GLANCE
- Connect business processes
- Integrate plant and commercial
activities
- Innovate customer services
- Collaborate with customers
and suppliers
- Build a demand-driven
supply chain
- Track relevant business KPIs
INDUSTRY-STANDARD PRACTICES
VERSUS INDUSTRY-LEADING PRACTICES
Trends show that many midsize organizations are moving away from traditional practices and adopting forward-thinking
practices to support profitable growth and financial performance in key areas.
|
INDUSTRY-STANDARD PRACTICE |
INDUSTRY-LEADING PRACTICE |
| BUSINESS VISIBILITY |
Manual or disjointed methods for monitoring Integrated information from the enterprise,
business performance and aggregating results |
Integrated information from the enterprise,manufacturing plants,
suppliers, andcustomers feeds into comprehensive business planning |
| BUSINESS PROCESSES |
Processes such as payroll, accounting, HR, and
transportation management kept in-house by
vertically integrated companies |
Processes such as employee self-services,
customer-order management, logistics
services, and production outsourced entirely
or piecemeal |
| BUSINESS FOCUS |
Focus on cost cutting, business process
reengineering, and selling more products
to fewer customers |
Focus on top-line growth by collaborating;
implementing customer, product, and
segment analytics; and pricing optimization |
TO STAND STILL IN TODAY’S WORLD IS TO FALL BEHIND
THE ROAD TO PROGRESS
The business processes and information systems throughout your company
were developed over decades, and many of them are undoubtedly “entrenched.”
Reengineering them to take advantage of industry-leading practices won’t
happen overnight, and will require a strong commitment at the highest levels.
But there is good news. Organizations that persevere can expect the
following rewards:
- Greater ability to respond to market dynamics,
reduce business risk, and deliver financial results
- Significant reductions in operational and administrative
costs and working-capital requirements
- Better preparation for profitable internal growth,
mergers, and acquisitions
- Stronger relationships with customers, suppliers, and the
extended enterprise
EMERGING TECHNOLOGY
Chemical-industry companies are finding better ways to improve collaboration
across supply and customer value chains – and manage internal operations.
Emerging technologies and processes, such as role-based dashboards, master-data
management, and middleware technologies that connect internal and external
processes, are paying off for leading-edge companies.
Transportation and distribution processes will benefit from radio-frequency
identification (RFID) technology. Look for RFID to be used for tracking
everything from bulk materials to finished goods. The combination of RFID with
mobile computing and wireless communication will be used to signal changes
in demand, all the way from retail outlets back to raw material suppliers.
As supply chains become more complex and partner-to-partner collaboration
extends to process optimization and plant automation, application software
is changing in response. New-generation manufacturing execution systems
are combining with enterprise management solutions to deliver greater overall
business visibility.
THE FUTURE LOOKS BRIGHT . . .
Emerging technologies will have a particular impact on the following chemical-industry business processes:
DATA AND BUSINESS-PROCESS INTEGRATION
Businesses are using SAP NetWeaver to connect their internal systems with those of their customers and suppliers.
Business processes are becoming integrated, facilitated by middleware as well as by business-process communication standards
such as CIDX. A preconfigured order-to-cash scenario using CIDX standards is available today, allowing you to automate
this business process. SAP NetWeaver provides a number of components that can be implemented separately, which lowers
your implementation risk and speeds ROI.
ENHANCED PRODUCTION MANAGEMENT
The ever-increasing number of installed plant and enterprise management systems enables sophisticated management
of total customer value, changes in demand, and the extended supply chain with capable-to-promise, which drives
plant utilization and efficiency.
CUSTOMER SERVICE
Chemical companies will have to provide customers with increased visibility to orders and their own operations
through Internet portals and remote monitoring technologies. Furthermore, marketing executives will become more
informed about what they sell and to whom, enabling them to provide tiered services and optimized pricing based on
customer buyer values and cost-to-serve data, which drives profitability and customer loyalty.
A COMPLETE FAMILY OF SOLUTIONS FOR THE CHEMICAL INDUSTRY
SAP continually interviews chemical-industry thought leaders to identify the
most significant challenges and trends facing companies today. This knowledge,
combined with our customer experience worldwide, has led to the most
comprehensive portfolio of integrated solutions for the chemical industry.
For instance, a best-practices template for the chemical industry enables rapid,
low-cost deployment of common business processes based on best practices from
industry leaders. mySAP Business Suite enables maximum performance of
the enterprise through integrated management of plants, products, people,
customers, and suppliers. And SAP NetWeaver components, such as SAP Exchange
Infrastructure, integrate people, information, and processes across the extended
enterprise.
SAP combines its 30 years of problem-solving experience with the solutions and
the expertise of today. For midsize as well as large chemical companies, SAP helps
you achieve your goals and maximize your return on investment.
WHEN YOU CHOOSE THE RIGHT PARTNER
“At Devos-France, the SAP
system offers nothing but
advantages. Its scalability,
safety, ease of maintenance,
transparency, and integration
possibilities make the solution
unique.”
Freddy Wansart, CEO, Devos-France
FOR ADDITIONAL INFORMATION ON HOW SAP SOLUTIONS
CAN HELP YOUR COMPANY OPERATE MORE EFFICIENTLY
AND PROFITABLY, PLEASE VISIT
www.sap.com/industry/chemicals"target
THE BEST-RUN CHEMICALS RUN SAP
Both large- and mid-size companies around the world experience
the benefits of best-practice solutions by SAP.
- Aarhus Oliefabrik, Denmark
- Adiesso, Germany
- Basell NV, Netherlands
- Degussa Specialty Polymers,
Germany
- Döhler, Germany
- GE Bayer Silicones, Germany
- Hydro Agri, Norway
- K+S Group, Germany
- MG Industries, Germany
- NOVA Chemicals, Canada
- Polyone, USA
- Reichhold Inc., USA
- Resolution Performance
Products, USA
- Rohm, Germany
- Rohm & Haas, Global
- Sasol, South Africa
- Vinnolit, Germany
- Waters Corp., USA
www.sap.com/contactsap