FEATURE

By Nick Fryer, Vice President of Marketing, Sheer Logistics, Chesterfield, Missouri

Data-driven supply chain management helps companies in the chemical industry mitigate risks and optimize inventory control.

As recent activity in the Red Sea has exposed, chemical supply chains can get disrupted at any moment. Even cargo shipping operations that don’t use this route have been affected, exposing just how crucial it is for chemical supply chains to maintain a firm grasp on their shipments and global trends that might impact them.

Supply chain disruptions have generally become a more frequent issue in recent years, and with sustainability requirements, customers, and regulators to contend with, the chemical industry is under more pressure than ever to adapt its approach. Data analytics is perfectly positioned to assist.

As we’ll explore in this article, data-driven chemical supply chain management can provide a host of benefits, mitigate risks, and even optimize inventory control.

Strategic Advantages of Data-Driven Supply Chain Management

Placing data in the driver's seat of chemical supply chain management offers strategic advantages, such as:

• Better Decision-Making: Real-time analytics allow businesses to keep an eye not only on their own cargo but all the moving pieces in the supply chain that may impact it. This makes it far easier to make informed, effective decisions in the face of any supply or market shifts. Looking at historical data through predictive analytics can even empower businesses to see these issues ahead of time and adjust accordingly.
• Cost Reduction: More informed decision-making has the ripple effect of saving businesses money as they can avoid costly delays, etc. As we’ll explore later on, data-driven supply chain management also makes it easier to keep track of stock and avoid major risks which, again, reduces unnecessary expenditure.
• Improved Competitive Advantage: With more than 20 million employees and trillions in annual sales, the chemical industry is one of the largest and most lucrative in the world. Staying sharp in an industry that is competitive isn’t easy, but embracing the power of data can offer a huge strategic advantage. It allows businesses to be more responsive to supply chain changes and more innovative in their approach.
• Sustainability and Regulatory Compliance: From Europe to North America, sustainability requirements are only being added each year. Data-driven supply chain management makes it significantly easier for the chemical industry to not only keep up with their compliance but improve on it. Data analytics can help cut transportation times, reduce carbon footprint, and make it simpler to accurately track fuel use, etc.

Boosting Efficiency Through Predictive Analytics

Setting up a predictive supply chain forecasting system is easier than many realize. It's all about embracing predictive analytics. By using historical data from your chemical supply chain and related factors, predictive analytics in logistics can identify patterns and forecast what might happen next.

Anyone who manages a chemical supply chain is acutely aware that a delay of even a few minutes can cause issues down the line, let alone what happens when entire routes are blocked. Being able to forecast problems and trends allows businesses to prepare better and, in doing so, use routes and transport as efficiently as possible. Instead of waiting until the problem is there to respond to, predictive analytics ensures that you're always one step ahead.

Optimizing Inventory Control with Real-Time Data

Predictive analytics can also provide market insight, which helps optimize inventory control. The analytics can paint a picture of supply and demand trends and how inventory should be managed to match them.

The magic of real-time data is that it gives the chemicals industry the power to see where their inventory is at all times. That kind of visibility and transparency means that every bit of inventory is traceable and, thus, nearly impossible to lose track of.

This kind of control over inventory offers huge benefits to chemical supply chain management. It helps mitigate against theft, allows businesses to provide up-to-date information to customers, and makes keeping data records for compliance that much simpler.

Using Analytics to Proactively Manage Risks

As many have noted, supply chain risk management is undergoing a major digital shake-up. Here are the key ways in which data analytics can assist in proactively managing risks in chemical supply chains:

• Faster Risk Identification: Both real-time and predictive analytics play a role in this. A better sense of the present status of a supply chain and all its moving parts, as well as potential upcoming issues, allows for a much quicker identification of the risks at play.
• Learning Early Warning Signs: Predictive analytics is all about seeing the patterns in the past and will usually unlock insights into the early warning signs of potential risks so that businesses can be more proactive than ever about mitigating things.
• Develop Mitigation Strategies: So much of effective supply chain management is about having a plan B, C, and D ready to go when a disruption arises. Predictive analytics, especially when it's applied to surrounding supply chain factors such as alternative suppliers, market trends, etc., can be instrumental in creating better risk mitigation strategies. The data can help businesses see where to turn to when things go south and even what the possible outcome of each option is.

The Power of Data Analytics

The stress of managing chemical supply chains has always been caused by the sheer number of moving parts. Data analytics are here to revolutionize things by making chemical supply chains more efficient, competitive, and better positioned to not only identify and respond to risks but avoid them altogether.