The chemicals sector is capital-intensive and sometimes struggles to secure bank loans given its cyclical character.
The products are extremely diverse if we draw a distinction between basic chemicals and special chemicals, which have a vast range of applications (pharmaceuticals, automotive sector, food processing or construction for example).
Since 2008, the sector has been subject to a great deal of uncertainty and variability in many respects: demand, product prices, material prices, regulations and sustainable development requirements. There is also a race for innovation and increasing competition in emerging countries, which poses all sorts of challenges to the various companies in the sector. These include controlling transport/logistics costs that account for 10% of the turnover - one of the most important because of its impact on profitability.
The economic crisis has particularly driven down stocks in the sector, thereby generating needs for lightning speed responsiveness on the part of suppliers whilst increasing the risk of stop-start resumptions.
- Medium-term planning (S&OP): being able to put together scenarios promptly as demand and the prices of raw materials change means you can manage risks better - even with unreliable forecasts - with stakeholders working effectively together; making more concerted decisions about the economically viable balancing of costs, with a successful anticipation of the transport capacities to be set up - all the while keeping better control over stocks connected with useful quota plans for guaranteeing high-quality service
- Short-term planning: being able to make decisions in a very short space of time about how to manage loss between customers, depending on their importance, via the ATP (Available-to-Promise) approach; the tools required for this advanced practice are a sound knowledge of all orders, stocks and works-in-progress and short-term production plans as well as the possibility of updating plans at a moment's notice
What DIAGMA can do for you
Founded in 1973, DIAGMA is now a leading consultancy firm in Supply Chain Management - and several-times the top-ranking firm in its sector.
- DIAGMA has a wide range of experience with stakeholders in the sector, with an international foothold. Diagma brings them:
- assistance with converging on tangible and accessible targets for improvement
- best practices for planning, stock management and transport to have an effective impact on costs, working capital and service quality
- the methodology for developing operationals' support for pragmatic solutions inspired by best practices
- knowledge of advanced tools and their integration for increasing the agility of the Supply Chain