Industry and Disruption
Besides the immediate-term challenges (shortages of critical products and materials, surging commodity prices, increased interest rates) the chemicals sector is facing significant medium- and long-term challenges too. Read more at McKinsey & Company, Online 2023 to find out how digitalisation could address the issues and deliver the next level of operational excellence in the industry.
Addressing indirect emissions that arise across the value chain (Scope 3 emissions) represent a bigger challenge than dealing with company-owned and -controlled resources and indirect emissions from energy generation. Nevertheless, regulations and investors are increasing their pressure on business to deal with the issue. Experts proved that decarbonization can be a value-creating opportunity (e.g. by capturing green premiums or building new green businesses). Article presents a strategy to lower Scope 3 emissions and seven critical success factors that can help companies create a plan that suit their circumstances. Read more at McKinsey & Company, Online 2023.
Agrivoltaic project (otherwise known as agrisolar or dual-use solar) refers to projects where the area is used for both farming and solar power generation. The development of a field has been restrained by some basic logistical issues. Simply said efficient solar power generating structures were blocking the sunlight necessary for plants to grow. A groundbreaking solution, that relies on organic materials, has been recently tested. The result was surprising. Read more at Popsci, Online 2023.
EU is close to finalising a set of new binding targets for green hydrogen use - at least 42% of all H2 used in industry must be renewable by 2030, with a small percentage required in transport. The target is expected to rise to 60% in 2035. Read more at Hydrogeninsight, Online 2023.
Experts believe that reinventing the approach to customers should be one of 4 focus points for supply chain executives already today to outperform competitors over the next couple of years. Focusing on customer satisfaction might soon not be enough. Enabled customers (e.g. ones that are provided with gift wrapping upon delivery, which saves time and effort) are twice as willing to repurchase as customers who were merely satisfied. Read more at Gartner, Online 2023.
The world economy is still rocky. A continuing war in Ukraine. Growing tension between China and trading partners. Unrest in Sudan. The unstable geopolitical arena contributes to the uncertainty and constraints in the supply chain. Experts anticipate no supply chain normalcy in the near future. Take a look at the current challenges and the recommended steps to take in order to improve the supply chain excellence. Read more at Forbes, Online 2023.
During the resent years energy and natural resources companies have experienced a great deal of disruptions: pandemic, blockage of the Suez Canal, and now the war in Ukraine. Until now there have been two reactions. Some believed that the challenge is temporal. Some hoped they were structurally protected from the disruption. But the reality shows that the current energy crisis is not short-lived and no company is immune. Just the shipping costs have doubled since March 2021. How can companies best protect their margins without upsetting customers? A range of trial-and-error actions during the last year have outlined suggestions to a new pricing approach. Read more at Bain & Company, Online 2022.
Post-Covid economic recovery in chemical sector is now challenged by the war in Ukraine. European chemicals sector suffers most, given its dependence on supply from Russia and Ukraine. This dependency effects inputs, supply chain, operations and end-markets. Long-term implications are harder to predict but could include new manufacturing hubs and acceleration of chemical recycling. Read more at Bain & Company, Online 2022.
The near future comes with 4 mayor transitions: from internal combustion engines to electric vehicles, circling plastic, decarbonizing the fertilizer chain, shifting diet to alternative proteins. These trends have pitfalls, industries have to be prepared for, and new business opportunities. Balancing the needs of the current business while investing in innovation and new product lines to succeed in future is a strategic task for today’s leaders. Read more at Bain & Company, Online 2021.
While most talk of customer experience innovation has focused on consumer-facing businesses, industrial firms are by no means immune to digital disruption. Based on L.E.K. research, customers are far more prepared for digital engagement than industrial leaders may realise. Leaders should be analysing the customer journey and selecting the best suited digital tools for engagement as quickly as possible in order to secure a first-mover advantage. Read more at Harvard Business Review, Online 2020.
