In my 2nd blog on topic - Strategic Priorities for Chemical Industry we had discussed Industry’s structure, operational challenges, competitive positioning, and imperatives for effecting customer-centric and customer-led transformation. In this blog we will discuss strategic directions, decisions, and actions which Industry needs to take to effect this transformation.
To initiate transformation, the Industry should first prioritize to examine its entire way of doing business. This review should aim to redefine and restructure operational processes, product portfolio and organizational structure. This transformation will enable Industry to find new ways to deliver value (to customers and overall stakeholders) and create a sustainable, responsive, resilient, and operationally efficient Industry.
Chemical Industry can undertake this customer centric transformation through following four key strategic drivers and initiatives:
Sell Business Outcomes instead of just Products: This paradigm shift involves move from Selling Products towards Selling Solutions to deliver tangible and desired customer outcomes. Companies are making this shift (from Products to Solutions) through customer collaboration and devising mechanism to include (customer) feedback on product usability in product development and customer service processes. This will enable Industry to devise new value streams, launch new services, improve, and develop products tailored to customer requirements. (Ballance Agri-nutrients)
Simplify to Shrink Cycle Time: Chemical industry aims for Efficient, Productive, Safe and Sustainable Operations. To ensure Operational Excellence (in its operations (assets, production)) Industry is prioritizing utilization of Intelligent Technologies (AI, ML) to run simulations and predictive models on Digitized version of their Operations. In this pursuit it is also leveraging IT and OT integration and IoT to achieve real-time visibility of its operations which can help it to uncover opportunities for profitable and sustainable Operations. These actions / initiatives can enable Industry to like to analyze operational data from multiple systems (like DCS, PLC) and after enriching it with business data (materials, orders, batches etc.) can help it to visualize and ascertain operational insights (like process parameters values to be maintained) for executing predictable operations (ALBIS PLASTIC).
Compete as an ecosystem: As Industry boundaries are blurring, it has become pertinent and essential for the industry to go-beyond its internal value chain to collaborate and engage across its ecosystem with customers, vendors, and suppliers. This will help it to understand requirements and market dynamics. Hence to achieve and support innovation, flexibility, and collaboration across its ecosystem, Industry should prioritize to build and operationalize Business Networks (Catena-X).
Adopt a strategic ability in response to market dynamics: In a cost and profitability challenged industry, there is no one formula to for consistent profitable growth. As discussed in my 1st Blog - market dynamics of all industries are constantly evolving therefore Chemical Industry needs to build strategic ability to dynamically refine its growth plans and accordingly structure its products and business portfolio. This strategic ability and corresponding actions can empower industry to redefine, reposition and manage its offerings (products, segments, services, markets, and locations) through either organic or inorganic routes (Mergers, Acquisitions or Divestures).
To summarize my 3 blogs, the time for Chemical Industry to reinvent itself is now. The way it innovates, markets and sell products, operates manufacturing plants, maintains assets, builds responsive supply chain, and manages its workforce all will need to have an outward focus towards its customers to ensure their (customer’s) success.