Matlack highlights digitisation benefits

TOMORROW IS NOW

DIGITISATION • WILL THE COVID-19 CRISIS ACCELERATE THE UPTAKE OF NEW TECHNOLOGIES IN THE CHEMICAL SUPPLY CHAIN? MATLACK LEASING THINKS IT JUST MIGHT

DIGITAL TRANSFORMATION IN the chemical industry has been evolving gradually, bringing with it tools such as digital portals, remote sensors, dashboards and e-commerce sites, all of which aim to improve the efficiency of suppliers and their supply chain partners. Those companies that are ahead of the curve can operate more effectively and efficiently.

According to Matlack Leasing, a service provider to the North American chemical supply chain, the benefits digitisation brings in terms of fleet management and distribution include more efficient route planning, optimised equipment utilisation and improved client relationships.

MATLACK BELIEVES THAT CUSTOMERS FOR ITS

TRANSPORT ASSET LEASING SERVICES WILL BENEFIT

The US chemical industry is responsible for around one quarter of national GDP and it continues to expand. To deal with that, chemical distributors have been required to update their traditional business models in order to stay relevant and continue to add value in the supply chains. “Specifically, chemical distributors looked to leverage technological solutions to meet industry demands for increased capacity, efficiency, and transparency,” Matlack says.

A 2018 study by Kearney outlined the business models that chemical distributors can use to add value and to increase their market share, noting that their implementation often benefits from – or even relies on – the use of digital technologies. Similarly, a report from Deloitte published earlier this year noted that, in order to relieve pressure on margins, chemical companies should direct their efforts towards “driving higher process efficiencies and enhancing cost savings across the chemical value chain with the help of digital technologies”. Deloitte also noted that the rejuvenation of an otherwise ageing workforce by a younger, tech-savvy generation would accelerate the process of digital acceptance.

CHANGE IS AT HAND The chemical transport sectors, including trucking, rail, and shipping, will evolve to support these demands from chemical companies to improve the efficiency of the supply chain and provide greater transparency, Matlack says. It notes that the trucking sector, which supports more than half of all chemical shipments, has already seen changes through the incorporation of digital technologies, including mobile sensors, real-time position tracking and online recorders to monitor product status en route. These digital enhancements all improve visibility, quality, and control.

In 2020, digitisation was expected to become a major differentiator for those companies willing to risk investing in the advantages of economies of scale and improved control over their operations, supply chain and distribution channels. However, the forecasted slow growth rate for the chemical industry and the chemical transport sector came to an abrupt end with the emergence of the Covid-19 pandemic.

The temporary shutdown in countries across the globe for all but essential goods and services, and the glut of oil, gas and petroleum products, required a rapid shift from transport to storage. It also required cuts in production, even as new mandates emerged for transitioning to a remote workforce and the implementation of social distancing requirements.

In the short term, companies have shifted to conserve cash, postponing projects that are in early stages, while wrapping up phases currently nearing completion. While it is still too soon to evaluate the longer-term impacts of the pandemic, it seems reasonable to assume that companies at the forefront of the digital transformation are in a better position to collaborate remotely while operating transparently and efficiently. One of the few more certain outcomes is the heightened awareness of the need for digitisation in chemical manufacturing and distribution. Ultimately, it is likely these trends will resume when capital and cash flow allow. www.matlackleasing.com