Factors That Will Shape the Future Model of Procurement in The Chemical Sector

Where globalisation, sustainability and tech advancements are leading the industry?

What do you think will be the impact of deglobalisation and other complications on the chemical industry?

The chemical sector is a four trillion-dollar global business that is an important part of the global economy and supply chain network. According to ChemAnlayst’s study, globalisation is arguably facing its greatest test since the end of the Cold War in today’s turbulent world, amid the twin crises of Covid and the war in Ukraine. The question of where globalisation is heading – and what it means for the economy, markets, and society – is at the top of everyone’s mind right now.

Government policies and authoritative regulations play a crucial role in the modelling of the chemical industry. Directives and regulations on safety standards and product labelling have a major impact on chemical products. International trade policies can affect the chemicals market by influencing import and export flows. The imposition of tariffs, trade barriers and agreements can either facilitate or hinder market access for chemical products by disrupting supply chains, increasing costs, and affecting market dynamics.

In broad terms, policies and regulations compliance, trade dynamics, geopolitical tensions, and deglobalisation among other complications can negatively affect the chemical industry. To successfully navigate the complicated terrain of the industry, chemical businesses must carefully monitor and respond to these elements.

The post-Covid period will therefore be strongly influenced by political objectives, which may have an impact on the geographical structure of production. However, political efforts may be constrained by the continued hegemony of the rationalisation paradigm of flexible manufacturing, pre-existing global economic development paths and associated power relations, which makes comprehensive deglobalisation very unlikely. Thereby, it is crucial for market players to start concentrating on reshoring and reduce their over-reliance on other nations for commodities while adhering to the standard protocols.

What major actions do you predict will shape the chemical market in the coming years?

The Sustainable Development Goals (SDGs) – There is growing recognition across the global business community of the immense potential of the Sustainable Development Goals (SDGs) to unleash innovation, economic growth, and development on an unprecedented scale. The Chemical Sector SDG Roadmap initiative, led by selected leading chemical companies and industry associations, aims to identify, articulate, and support the realisation of the chemistry sector’s potential to leverage its influence and innovation to contribute to the SDG agenda.

The chemical sector can support the SDGs through innovative products and practices that minimise negative impacts, protect the environment, promote social progress, and support economic growth through the responsible production, use and management of chemicals.

Tech Advancements – The chemical sector can benefit from the technological advancements such as chemical platforms and databases. Comprehensive databases like ChemAnalyst, ICIS, among others offer valuable data for suppliers and manufacturers both by providing pricing data, Market reports & analysis, Industry News & Insights, etc. These developments and new technologies can be accelerated by assistance for research and development (R&D), strategic procurement, and market intelligence.

Supply-Chain Decarbonisation – Decarbonising supply chains will be a “game changer” for global climate action with a potentially huge impact.

What are some effective strategies for promoting clear communication and transparency between suppliers and businesses?

First and foremost, it’s important to remember that maintaining a successful and mutually beneficial communication between suppliers and businesses requires work from both parties. One can encourage a productive and effective collaboration by putting forth strategies into practice while promoting a collaborative mindset. Few effective strategies include:

• Technology and Tools: To track progress, communicate information, and manage workflows, one can utilise collaboration platforms, project management tools, and shared documents. This makes the communication between suppliers and businesses more centralised, while guaranteeing that everyone has access to relevant data.
• Explicit and Precise Information: Suppliers must be informed explicitly about the product and service requirements by the businesses. One must include thorough documentation that includes technical specifications, quality standards, or any special instructions.
• Dispatch Pertinent Data: Informing suppliers with pertinent facts that can improve their comprehension of your company, current market trends, and long-term goals.
• Establish Long-Term Partnerships: Investing in long-term partnerships with suppliers rather than switching them frequently, fosters commitment, transparency and builds trust.

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ChemAnalyst is an online platform offering a comprehensive range of market analysis and pricing services, as well as up-to-date news and deals from the chemical and petrochemical industries globally.

Being awarded “The Product Innovator of the Year, 2023”, ChemAnalyst is an indispensable tool for navigating the risks of today’s ever-changing chemicals market.

The platform helps companies strategise and formulate their chemical procurement by tracking real-time prices of more than 400 chemicals in more than 25 countries.

ChemAnalyst also provides market analysis for more than 1000 chemical commodities covering multifaceted parameters including Production, Demand, Supply, Plant Operating Rate, Imports, Exports, and much more. The users will not only be able to analyse historical data but will also get to inspect detailed forecasts for up to 10 years. With access to local field teams, the company provides high-quality, reliable market analysis data for more than 40 countries.

Learn more at  www.chemanalyst.com