CHEMICALS & ENERGY
Leading the Way in Asset and Energy
Management
The number one strategy for companies in the chemical and energy industries is to improve
demand orchestration as the economy recovers. Planning processes must manage pricing,
capacity allocation, and inventory positioning to manage margins. In addition, operational
processes must have visibility and business rules to manage commitments and respond to
volatility. These industries are more mature than others in their approach to asset manage-
ment, energy management and compliance.
—Paul Lord, research director at AMR Research
MR Research finds that companies in the chemi-
cal and energy sector are most advanced in
terms of operating and maintaining fixed assets.
Specialty chemical companies excel at applica-
stable operations have engaged commercial leaders in executive
operational demand forecasts from the financial budget.
• Sustainable design—Top chemical companies are embrac- A
S&OP processes with 3-year time horizons. They have separated
tions research and product formulation. Some of the salient ing regulatory changes in industrialized nations as opportunities
points associated with the chemical supply chains are:
for improvement. Many offer products and technologies which
• Center-led supply chains—Best-in-class companies are bal- can contribute solutions. Leading companies see reduced emis-
ancing autonomous profit centers and shared service functions sions as consistent with efficiency and a marketable side benefit
like procurement with end-to-end supply chain managers who of continuously lowering their cost.
drive performance improvements and facilitate tactical planning.
• Channel segmentation—Industry leaders have estab-
The Outlook
lished low-cost channels to deliver low-margin products and In 2010, expect to see continued emphasis on energy efficiency
serve “price conscious” customers. Several companies have as rising energy prices put upward pressure on feedstock and
achieved order-to-cash process automation for a significant transportation prices. As business conditions improve, consoli-percentage of transactions.
dation and capacity rationalization will continue as producers in
• Complexity reduction—Top companies are measuring developing countries add new capacity or make acquisitions.
cost-to-serve and product profitability metrics. They are Companies will focus more deeply on cost containment and
rationalizing low-growth, low-margin products from their port- demand orchestration, balancing their focus on working capital.
folios and standardizing specifications and service levels for The impacts of REACH (Regulation, Evaluation, Authorization
commodities.
and Restriction of Chemical substances) and greenhouse gas reg-
• Sales and operations planning—Successful companies with ulations will command attention.
