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Chemical consumers face the challenge of identifying suppliers who can deliver raw materials of the required quality at a fair price. Once they have found a reliable vendor, buyers have a tendency to continue the association even if there is a possibility of finding alternative sources that are more economical.

The price volatility of raw materials can result in rising costs, lower profitability, and a desperate last-minute hunt for new suppliers. But finding alternative sources of supply for chemicals is a time-consuming process involving the verification of the seller’s reputation and its ability to honor its commitments.

Supply chain management in the chemical industry can be a challenging task. Identifying a reliable supplier of the required raw material could take days if not weeks. Once this task is completed, it would be necessary to negotiate a mutually acceptable set of terms and conditions.  By the time an order is placed, the market situation may have changed. The firm that has placed the order may not require the material any longer. It could also be possible that the price at which a particular chemical is finally purchased has increased to such an extent that it makes the entire exercise uneconomical.

Small and medium-sized chemical consumers often find it difficult to get their suppliers to reduce prices or to offer them other concessions. With relatively low buying power, these firms are at the mercy of the companies from whom they source their raw materials.

The chemical industry is seeing rapid growth and innovation as key end-use markets witness increasing demand. The US chemical industry alone is “an $801 billion enterprise” accounting for 14% of the country’s exports and 15% of the global chemical market. World chemical production grew by 2.8% in 2015. It is expected to expand by a further 3.3% in 2016 and 3.7% in the following year.

Organizations that consume chemicals require their suppliers to provide efficient and proactive customer service. A supplier who takes an inordinate amount of time to respond to a query or fails to respond to a specific request for information is likely to be dropped at the first opportunity.

Let’s spend some time focusing on digital marketplaces, not because that’s what Kemgo is, but, rather, because marketplaces are a solution that makes digitalization a little less overwhelming

Chemical companies that enhance their digital B2B capabilities will be in a better position to adapt to a changing competitive landscape. They can take advantage of several important opportunities, including deeper and stronger customer relationships, streamlining lead qualifications, and extending company reach.

Technology and business practices are evolving and the shifting expectations of customers are quickly raising the bar for most suppliers. e-Commerce interactions in the chemical industry will need to be more customer-focused and richer. In the near future, all B2B processes will be digitized. That is a shift that will enable sellers to more effectively and proactively improve their marketing efforts and customer reach.