MANY companies in the chemical industry have embraced e-commerce and more are joining the ranks every day. But to take full advantage of the new technology, the industry will have to build a flexible, adaptable infrastructure, said Kamal Siada, chemical and energy services director of Sapient Corporation, Cambridge, Massachusetts.
"The extent to which participants across the chemical industry are able to align their capabilities to integrate with their customers' supply chain, and assume managing significant parts of it, will determine the winners and losers in the industry going forward," he said.
Siada discussed e-commerce and its effect on the chemical industry at Chemical Week's 5th annual Chemical Transportation and Distribution Conference January 17-19 in Houston, Texas.
Because of the Internet revolution, the balance of power now leans toward the customer in almost every industry. "Traditional channels have been forever changed," he said. "It is the customer, in most cases, who is driving change in business models and market dynamics. Increased competition for their business has validated customers' increasing expectations of their vendors and service providers."
Today, customers demand the flexibility to buy products and services any time, anywhere, at competitive prices, and with superior customer service. In addition, the industry is feeling the impact from new entrants in the market and the evolution of spot markets for chemicals and associated transportation.
"This changing landscape is creating opportunities for both transportation providers and third-party logistics providers to transform their service offerings to meet the demands of chemical companies and their customers," he said.
"This transformation will impact how companies throughout the value chain conduct business with customers and trading partners alike. Supply chain integration will be at the core of any successful initiative."
Despite all of the change currently occurring, the technological revolution has only begun. "Right now, it is unpredictable because it is evolving every day," Siada said.
The challenges will come with adapting to the technological gains and the accompanying infrastructure requirements. Added to those challenges are companies adjusting to mergers, customer needs, and globalization.