Chemical industry is plagued by a supply chain gap

July 17, 2006
Supply chain professionals in the chemical industry view the underutilization of supply chain technology as a barrier to improving overall supply chain

Supply chain professionals in the chemical industry view the underutilization of supply chain technology as a barrier to improving overall supply chain performance in the industry, according to a study conducted by management consulting firm Accenture (

In the study, which was designed to identify supply chain best practices in the global chemicals industry, fewer than 10% of the respondents indicate that their supporting supply chain technology is performing at an " excellent" level across all functional areas studied, including commercial optimization, demand planning, inventory target setting and deployment. In addition, although more than 70% of respondents report using integrated systems for the order management and commercial optimization categories, fewer than 30% of respondents feel their technology is being fully utilized.

The study also finds that supply chain training shows significant room for improvement. For example, more than three-quarters (78%) of respondents say they either do not receive formal supply chain training or let functional areas define their own training needs, ultimately incorporating cross-supply chain issues to varying degrees.

Furthermore, collaboration with customers appears to be a challenge for chemical companies, as more than two-thirds of respondents indicate they do not engage suppliers in joint planning processes.

"Results from the study demonstrate that chemical company supply chains, while unquestionably valuable to a company's performance,-are far from achieving best-practice status," says Christopher Lange, a senior executive in Accenture's Chemicals industry group and the study's author.

The study looked at more than 250 business units with over 1,000 contributors in the chemical industry across North America, Europe and the Asia Pacific region. In addition, Accenture recruited executives from 10 leading chemicals companies to form a steering committee charged with designing and overseeing the study.

"This has been a very positive process as we consolidated information throughout our organization in a consistent manner," says David Prilutski, vice president, supply chain for Lyondell ( "We now know more about our company and how it compares to best practices and our peers. This has been very helpful as we define the areas on which we need to focus."

Supply Chain Council launches job board

The Supply Chain Council (SCC) has introduced a new interactive job board. By visiting, employers and recruiters can reach the 700 member companies of SCC worldwide, who are experienced practitioners representing a broad cross-section of industries, including manufacturers, services, distributors, and retailers.

Job seekers can post their resumes free and confidentially, receive automated weekly e-mail notification of new job listings, and can save job postings for later review.

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