The numbers are similar for the degree of customization that companies will tolerate, as one might expect. That is, 15% of respondents indicated significant levels of customization — essentially the same 15% who said that commercial needs drive SKU decisions. On the other end of the spectrum, 19% said they had little or no customization. Although some level of customization occurs among more than 80% of respondents, less than half charged a premium to recover the associated costs.
Ample opportunities remain
The results of the Accenture’s “2007 Global Chemical Industry Supply Chain Best Practices Study” highlight several strengths of chemical companies in terms of the supply chain. More importantly, they also highlight several areas where significant progress still can be made. In particular, key opportunities lie in addressing the commercial functions and the way they relate to the rest of the supply chain. For example, chemical companies can take steps to more thoroughly document commercial policies and can establish mechanisms for enforcing and monitoring those policies.
Doing so is likely to have positive ramifications far up the supply chain.
Companies also can focus on giving manufacturing and supply chain operations a seat at the table in commercial decision-making. That way, those operations will have a clearer view of the commercial requirements that they’ll need to support. At the same time, they’ll be in position to inform the commercial processes so that sales and marketing can factor manufacturing and supply chain realities into commercial decisions — and everyone can work together to address potential issues early on.
The chemical industry’s efforts to improve the supply chain are ongoing and so too is the 2007 study. Rather than a one-time snapshot, it’s designed to be a continuing exploration; companies interesting in participating should contact Accenture. The goal, ultimately, is to draw on the broad experience of numerous chemical companies to develop knowledge and insights that can help the industry strengthen its ability to use the supply chain as key driver of high levels of business performance.
Christopher F. Lange is a Chicago-based senior executive in the chemicals industry group of Accenture. E-mail him at firstname.lastname@example.org.