Like almost all other industries, the chemical industry is in unexpected trouble in 2020 due to the global pandemic of coronavirus. In fact, every sector of chemical manufacturer has experienced a chain reaction of market slowdown. There are still uncertainties in the stability of the supply chain, labor capacity, changes in Global trade rules and so on.
Despite the impact of global supply chain disruption on enterprises, the chemical industry can take advantage of some of the following factors:
Global demand for raw materials for health products and disinfectants is increasing.
The fall in oil prices provides an opportunity to obtain oil raw materials at a lower cost.
Many major and secondary sectors are dependent on raw materials provided by the chemical industry.
Decision makers of chemical manufacturers also need to make strategic and operational changes to help their enterprises tide over the crisis with minimal loss. The chemical industry also needs to prepare for the post coronavirus era. However, before we can find a viable solution, we must understand the challenges facing the chemical industry. Let’s take a look at the six challenges the chemical industry is facing due to the new coronavirus crisis.
Liquidity and investor issues
Due to the covid-19, the financial results of the first quarter of 2020 suddenly declined sharply. Market slowdown leads to investment shortage, credit decline, etc. The financial impact has caused great pressure on the chemical industry, and the senior managers reconsider their financial allocation policies to get through this difficult period.
Labor shortage and productivity decline
Many areas have not yet returned to normal, we need to follow the norms of social distance to avoid the spread of coronavirus. Existing additional rules limit the capacity of chemical production facilities to work at full capacity. Even if there is no labor force working in the workshop, they have to work at home or stay at home. The current problems in the chemical industry have led to a decline in productivity and a reduction in the output of production plants.
Supply chain disruption
With the slowdown of all types of tourism (especially international air travel), the global chemical industry is facing major supply chain challenges. To a great extent, the chemical industry relies on the harmonious work of different stakeholders to achieve seamless operation. The enterprises have been hit hard, such as the delay of raw material acquisition, delivery delay, delivery obstruction and so on.
Differences in raw material demand
Chemical companies supply different raw materials to different industries. They arrange the inventory according to orders, estimates and market conditions. However, the blockade imposed as a result of the coronavirus pandemic has resulted in the shutdown of many industries, such as automobiles and consumer goods. In contrast, other industries, such as hygiene products, pharmaceuticals and medical equipment manufacturing, have to increase production capacity. The imbalance of the market leads to inconsistent demand for raw materials, and chemical manufacturers have to readjust their inventory to meet the changing demand. The market is recovering, but it still has a pandemic impact.
Promote social distance on the website
Workers who have returned to the factory need to be re equipped to speed up work and catch up with previously suspended customer orders. Many chemical companies have made great changes to their factories in order to provide a safe working environment for their workers. The atmosphere includes regular cleaning of the place, promotion of social distance, checking the temperature of employees, interaction and collaboration through digital tools, etc.
Changes in post pandemic strategy
Strategists and executives of chemical manufacturers have a strong and demanding job at hand, and need to re formulate strategies to deal with the post pandemic era. Replanning involves measuring market pulse on a fine-grained basis, understanding the different needs of different compounds, and providing visibility of plans to investors and business partners. Higher visibility drives the demand for airborne agile analysis tools and their manufacturing execution and warehouse management systems.