Awash in Volatility, Chemical Manufacturing Must Be Agile
Chemical manufacturers must find every possible opportunity to build flexibility into their operations. Scaling production up or down based on the relative availability of key materials or fluctuating demand has to become second nature for leaders in the chemical sector. Companies that are too slow to adapt to market conditions could end up with expenses stacking up or an inability to capitalize on opportunities.
The Petroleum Connection
One of the factors causing intense uncertainty for chemical producers is these businesses' close connection to the global crude oil market. The many plants that use petroleum as a material or feedstocks may find their ledgers changing in a heartbeat when oil prices spike or decline.
Considering that oil prices are often affected by unrest around the globe, in patterns that can be hard to predict, it's easy to see how a such a market development might creep up on a company. Recent events that have affected oil production, as cataloged by MarketWatch, include Hurricane Harvey's damage to U.S. refineries and civil unrest in Libya curtailing OPEC output.
A Demonstration of Volatility
The recent hurricanes that slammed the Southern United States disrupted the chemical supply chain in another way. Bloomberg Businessweek noted that when Harvey struck the Gulf Coast, a large percentage of U.S. ethylene production went offline. Other producers will now be facing increased demand, and companies that use the chemical as an ingredient in fabricating PVC and other materials may have to scale back operations for some time.
Processes Must Adapt
When chemical producers have access to more efficient and digitized versions of essential functions such as barcode labeling, they gain visibility and flexibility that will serve them well in uncertain times. Furthermore, making these systems more efficient and cutting the costs associated with labeling product barrels - and complying with related laws - can help them bottom line when plans have to change in a hurry.
For more on chemical labeling check out our recent report on that topic.