INDUSTRIAL SECTOR

CHEMICALS

What challenge(s) do our clients face?

Capital intensive assets, risk management and safety, a diverse range of clients and product uses, environmental pressures, global logistics… these are just a few characteristics which raise complexity in the Chemicals sector.

The sector is marked by specific and technical features ranging from raw material fulfilment to final product sale, which raise complex and differentiated challenges throughout the value chain.

The relationship between supply and demand is complex, with commodities, influenced by exchange rates and geopolitical contexts, being transformed in large industrial plants requiring capital-intensive assets with uninterrupted production processes. Simultaneously, this must be matched with a varying demand influenced by global competitors as well as the enormous variety of clients, segments and product uses.

Sustainability, and its regulations, has also had a growing influence on the operations of all players, especially given the environmental toll that extraction and production yield.

Overall we are seeing consumption profile changes, legislative changes, public pressure and technological advancements, shifting medium – and long-term strategies throughout the sector.

How do we help?

In this challenging context, Integration has been a partner to our clients, supporting them with a large variety of projects ranging from supply chain efficiency programmes to new market entries.

We have worked across countries, allowing us to understand the Supply Chain and sales conditions across various markets. As a result, we have seen that the challenges between companies and countries vary a lot and that the solution must be adjusted to each reality.

With this in mind, our approach ensures we deeply understand each company’s context, working hand-in-hand with our clients. We bring pragmatic and practical perspectives to our solutions, thus enabling businesses to connect strategy with tactics and operational plans. Alongside data-driven decisions based on your business’ reality, Integration also embeds technical, business and change management perspectives in each solution.

Some common ways in which we have helped our clients include:

2 1 Given this is an industry that competes in a global landscape and is influenced by cycles of offer and demand and commodities price variation, we help our clients to understand their customers values in terms of service level and use this as a lever to sustain/grow market share or even enable higher margin negotiations. The service level differentials can encompass reducing order to cash lead times, ensuring product availability, creating customized products or packaging, etc. CREATE SERVICE LEVEL DIFFERENTIALS 3 Supporting the company to enhance its planning competences, enabling clear decision making and trade-offs evaluation when optimizing its capital-intensive assets Ensuring the needed product availability to sustain a market entry strategy or reduce inventory levels and manage cash flow. IMPROVING OPTIMIZATION AND PLANNING CAPABILITIES 4 Given the consumption profile changes and the increasing pressure to sustainability aspects, we can help define the company sustainability strategy and lead market actions on this topic as a market differential and even cost reducer. DEFINING A SUSTAINABILITY APPROACH Usually dealing with a very high variety of clients, segments, regions and product applications, ranging from other chemical companies, distributors, consumer goods companies, beverage and food and many others it becomes even more important to understand their differences and adjust the market approach to each one of them. ADJUSTING THE GO TO MARKET STRATEGY TO EACH CLIENT AND SEGMENT

Commonly applied services

Integration supports companies across the value chain by leveraging expertise from each of our practices – Supply Chain, Marketing and Sales, Finance and Management, Implementation and Leadership and Organization – supported by our Sustainability and Tech-Lab competence centres.

Clients

We have worked with clients in different categories, geographies and positions along the value chain:

WATCH TESTIMONIAL

In this video, a range of clients from the Chemical sector talk about their positive experience working with Integration.  


Chemicals: What our Clients Say Chemicals: What our Clients Say

SUCCESS STORIES

CHALLENGE

A global company was in the ramp up period of a new operation, having just inaugurated a new factory in a new country, which by nature brought out some challenges, such as understanding the new market dynamic, clients and competitors and ensuring a stable and efficient operation.

One of the company’s challenges and goals for this ramp up period was to ensure domestic market penetration while reaching its financial targets. This demanded a full revision of its planning capabilities, from understanding and forecasting the demand, to enabling business choices, such as inventory levels, service level to sustain market penetration, and of course connection to the business strategy.

APPROACH

Various symptoms of the problems in the results and governance were visible, but we delved deeper with interviews and field visits, as well as quantitative analyses to understand the problems root cause.

With clear gaps and opportunities identified, we focused on redesigning the inventory policy, S&OP, Control Tower and order fulfilment processes, KPIs and governance models as well as the Supply Chain organizational structure. All of this built together with the client and adjusting the solution to its context and needs.

RESULT

We supported the implementation of all the recommended solutions, which involved revising planning processes and rituals, implementing a new inventory policy, building supporting tools, coaching the team, and fine-tuning the design to best suit their reality.

This set strong foundations from which they generated a much more consistent operational performance and inventory, sustaining growth and allowing them to reach the financial and market penetration targets.

CHALLENGE

A global player in the petrochemical industry entered Mexico with a strong market penetration in its first 5 years.

With a sizeable market share, they had the challenge of optimizing their existing business model and Go-to-Market strategy, with emphasis on clarifying their vocation and regional scope, as well as preparing to scale the business over the next 5 years.

Integration had to intricately understand the needs of the different customer segments and design a value proposition that was both attractive for the customers and profitable for our client.

APPROACH

We took a 5-step approach:

  1. The first step was to understand the market potential, its dynamics and customer needs to define the company’s vocation for the next strategic cycle (regional focus, product orientation and customer segments).
  2. With a clear vocation validated by the leadership team, we worked on building the client’s segmentation considering the client’s current attractiveness, potential and right to win (or be profitable).
  3. With the segmentation in place, we defined each of the Go-to-Market enablers that would help meet the strategic objectives defined for each segment. These enablers included service level packages by segment, distribution strategy, organizational structure, commercial policy, and supply chain drivers.
  4. Next, Integration built a P&L 5-year simulation to measure the financial benefits of implementing the new Go-to-Market for our client.
  5. Finally, we built an implementation roadmap to have clarity on the timeline, resources needed, governance model and KPIs to ensure a successful implementation.

RESULT

Having multifunctional teams and engaging all areas in the workshops and discussions was the key success factor to achieving the excellent project results.

We were able to build clarity on the market, client needs and client potential as well as a 5-year financial projection quantitatively measuring the benefits of implementing the new GTM.

For example, with 50% of their customers generating only 10% of the volume, we deemed those customers not profitable enough to support the client’s next strategic cycle and focused on a new segment which would drive profitable growth.

CHALLENGE

A large chemical distributor had recently been acquired by a private equity firm and was facing pressure to reduce the overstocks and stock-outs which were negative affecting performance and client image.

With a complex supply chain – more than 1500 SKU’s, imported lead times, commodity variability, demand volatility, service level as a key factor of differentiation – and a challenging context, with restrictions on profitability and cash, this client counted on Integration’s support to optimize the supply chain management.

APPROACH

We reviewed the entire planning process, with an emphasis on simplification and quality.

A complete diagnosis of their supply chain was the first step. For that, we conducted several analyses focused on the quality of this distributor’s inventory and sales characteristics. That, alongside interviews with procurement, operations, finance, and commercial staff, gave us an overview of the challenges that they were facing, as well as a map of the supply chain characteristics, such as responsiveness and required service level.

The second step was the design phase, which was divided into two work fronts: one to redesign the inventory policy and another to redesign the planning processes, organizational structure, and governance.

Following the design, Integration helped implement two planning cycles which would see the purchasing decisions follow the redesigned inventory policy. At that point, Integration’s support was crucial during the training of procurement staff as well as leading the first S&OP meetings – guaranteeing alignment between commercial, procurement, and finance for the following months.

RESULT

The quantitative results of the project were clear – in the first two months, stock levels reduced by 16% combined with 70% fewer stock-outs. Furthermore, the planning capability was successfully embedded in the team to drive further improvements over time.

CHALLENGE

Plastic packaging is changing rapidly as consumers, society and governments see the impacts of virgin plastics and apply increasing pressure for more sustainable solutions. Even though alternative packaging solutions are coming to the market, plastic recycling is expected to be an important part of the solution in the short to mid-term.

Our client, a leading petrochemical company, and one of the biggest producers of virgin plastic polymers needed to define its strategy to enter the recycled plastics value chain, thereby staying relevant whilst the demand for virgin plastics declined.

APPROACH

Moving to a Circular Economy model requires a reversed logistics chain of waste generators, collectors, and recycling companies working together. The dynamics of this reversed chain vary significantly per geography and good information on value chain operations or quantitative data is often lacking.

To understand the plastic recycling landscape and determine the most suitable model for our client, Integration visited and assessed multiple players in each step of the chain, understanding their operating model, volumes, margins, and service level including how they secure a constant availability of waste flows.

RESULT

We worked with the client to create a comprehensive business case that introduced a post-consumption recycled polymer to the market. Our due diligence supported them in selecting strong recycling partners, which could deliver the required volume and quality level and they are now proceeding with a full implementation.

TALK TO US

Alessandra Reganati

Since 2014 Alessandra has been working in our Supply Chain practice helping our clients to overcome challenges related to logistics, planning and efficiency. She has worked with clients in industries as diverse as Consumer Goods, Petrochemicals, Healthcare, Retail, and others with projects such as S&OP redesign, Order-to-Cash process improvement, Inventory Management and Cost Efficiency, to [...]

Augusto Ribeiro

Augusto Ribeiro is a Managing Partner at Integration and has been working since 2003 in the Marketing & Sales practice. Augusto built a solid international experience, leading and implementing strategic Marketing & Sales projects in industries ranging from Consumer Goods through Construction & Property Development to the Financial Industry, especially in the Private Equity sector.

Francisco Pereira Leite

Francisco is a Managing Partner and has been working within Integration since 1999. An all-rounder, Francisco has moved across our practices, working for the first eight years with focus in Supply Chain and then increasing his scope to the Finance & Management and Implementation areas. His experience over more than 150 projects includes Implementation and [...]

Gerard Schoor

Gerard is a Managing Partner and has overseen the Mexico City office since 2008. Prior to Integration, Gerard accumulated 25 years of experience in executive positions at L’Oréal, The Colomer Group and Unilever in Europe, USA and Latin America. He has led global projects related to Organizational Development, Market Entry Strategies, Industrial Management and Strategic [...]

Guido Solari

Guido is the leader of our Buenos Aires and Santiago office and is a director within our Marketing & Sales practice. Having worked with Integration since 2006, he has completed a wealth of projects across Latin America, the United States, Canada and Europe with clients spanning many sectors, including Retail, Consumer Goods, Government, Healthcare and [...]

João Barros

João is a partner at Integration and has been working since 2006 in our Supply Chain practice. During this period, he been instrumental to the practice's development in Integration's 7 offices around the world, contributing directly to its numerous awards in Brazil. He has led, and continues to lead on numerous projects in Planning, Distribution, [...]

Marloes van der Meer

Marloes is the Leader of Integration’s Sustainability Competence Centre. Across over 10 years in consulting she has developed a passion for and knowledge of sustainability topics, undertaking projects ranging from measuring carbon footprint of logistics networks, to the development of circular economy business models for plastic producers.

Ricardo de la Cueva

Ricardo is a senior specialist within Integration’s Supply Chain practice and has an MBA in Operations and Supply Chain from Rijksuniversiteit Groningen in the Netherlands. Having worked for over 20 years in consulting, he has developed extensive experience leading and advising on projects on an international scale across diverse industries including Consumer Goods, Healthcare, Education [...]