Procurement in the Chemical Industry

The global chemical industry delivers materials and substances to sectors such as agriculture, automotive, construction, and pharmaceuticals. This also means that changes in the chemical industry are likely to have an effect on a number of other industries.

While the chemical market is transforming and companies need to adapt their businesses, processes and operating models, chemical CPOs are facing new challenges.

It is therefore critical to understand the key chemical market developments, how they will affect the agenda of chemical CPOs and how these challenges can be faced successfully in order to create a competitive advantage in the long run.

In Germany / Western Europe, we observe a structural shortening of chemical value chains. Petrochemicals, Fine chemicals, Intermediaries are increasingly imported from countries with feedstock, energy or other advantages. This leads to higher supply risks, volatility and lead times, as well as new supplier structures. This trend is likely to continue in the next few years. Based on this development, strong procurement within direct material sourcing is needed to check supplier sustainability, and early warning systems should be established to assess supplier health and increase supply chain transparency.

Wolfgang Falter, Global Chemicals & Specialty Materials Leader