Globalization, Major Regional Shifts in Demand and Supply Base, Geopolitical Risks, Increased Competition and Other Factors are posing multiple challenges for chemical industries in recent times. As a result, it is time for them to begin the digital transformation of their entire business and shift towards being an intelligent enterprise.
Digital transformation is a journey, and chemical industries have established strategic priorities to help them achieve their goals. This article discusses industry-specific features for the Chemicals Industry offered by RISE with SAP’s Business Transformation Service. Let us begin by defining strategic priorities and their benefits for the Chemicals Industries!
Strategic Priorities for Chemical Industries
To begin the transformation, chemical industries should prioritise examining their entire business model and be prepared for it. Thus, Chemical Industries concentrate on achieving this customer-centric intelligent digital transformation by implementing the four key strategic priorities listed below:
- To Assist sell business outcomes instead of just products
- Simplify to shrink cycle times
- Compete as an ecosystem
- Adopt strategic agility in response to market dynamics
In order to achieve the above-mentioned priorities, it’s time for the chemical industries to reinvent by integrating an intelligent ERP system called RISE with SAP, which enables you to innovate products as well as redesign entire business models and processes.
Compete as an Ecosystem
Even now many chemical companies still operate within their traditional boundaries. The inside-out thinking drives innovation by capitalising on existing products as well as internally know-how and established relationships with suppliers, partners and customers help them to behave like a complete ecosystem. However, Companies can no longer afford to focus solely on their own in the face of increasing competition, ongoing globalisation, and blurring industry boundaries.
To better understand this, let’s consider there are two businesses namely:
- Company A uses a non-SAP ERP system
- Company B uses an SAP-ERP system
As Company A’s entire business structure is governed by a non-ERP system, these were the pain points faced by them:
- The sale of agrochemicals through wholesalers had little impact on farmers purchasing decisions which in turn affected their business.
- Product and price differentiation were the only source of competitive differentiation for them.
- In terms of “Profitability”, it is determined by the number of products sold.
- Due to a lack of understanding and insights into the best way to treat a field, suboptimal agrochemical usage had a negative environmental impact.
- Breakdowns in equipment caused critical and time-consuming delays.
As a result, insufficient integration of their traditional system resulted in a high involvement of manual processes.
Now let’s see about Company B, which uses an SAP-ERP system, where:
- Direct marketing of agrochemical products allowed farmers to receive decision support.
- Competitive differentiation based on superior services enabled the best field treatment.
- Outcome-based business models provided success based on the yield that can be achieved rather than the volume of product sold.
- Smart machines, Drones and Robots are among the connected agriculture IoT devices that enable smart data collection and automation. This provided lots of insights and optimization at levels lower than the square metre.
- Predictive maintenance and service increased the availability of equipment for them.
Overall, Company B’s Intelligent ERP [RISE with SAP Package] system provides live inventory management that enables them to have better transparency in material movements. Making agreements by combining one-time product sales with subscriptions and usage-based services in a single contract was a huge advantage for them.
Top Value Drivers
The major value drivers in the Chemicals Industry post successful deployment of SAP S/4HANA are:
- Increased yield per farm unit and uptime of equipment.
- The overall cost savings was reduced drastically.
- Brand recognition throughout the ecosystem was increased.
Now you may be asking, “How can RISE with SAP helps us?”. Here are the primary business capabilities they offer to assist you in reaching your objectives:
- Advantage of open co-innovation and extended manufacturing networks while understanding customer needs was favourable.
- Development in the ability to redesign networks and relationships in response to market dynamics was higher.
To summarise, SAP S/4HANA is a one-stop solution that can provide intelligent and industry-specific benefits to the chemical industries through a digital core ERP system that helps them innovate markets and sell products, operate manufacturing plants, maintain assets and build a responsive supply chain.
To know more about how SAP S/4HANA or about other solutions that can help enterprises in chemical industries, do get in touch with us!