Jack Weiss, chief executive of industrial systems, pointed out that during the economic downturn, Jack Weiss was “quite challenged.”. Sales in some markets are down 20% to 80% depending on the specific vertical direction. The good news, he said, is that the industry has basically established itself, with sales back to pre recession levels and profits even reaching record levels.
However, Weiss said the industry still faces the challenges of market volatility and increased demand. Traditional tools, such as statistical forecasting, have become less effective, and history is no longer a reliable indicator of future trends. In response, many chemical suppliers are looking for collaborative forecasting with customers.
In some ways, the chemical industry is catching up with others. As the inventory is relatively cheap, there is no incentive to optimize the inventory and better match supply and demand. Now, with rising uncertainty and more intense competition, chemical suppliers have a strong incentive to improve their inventory management as a means to improve profit margins.
The fluctuation of oil price is an important factor of uncertainty. Many key products of the global chemical industry are heavily dependent on oil. Weiss said that in the United States, where natural gas is the main raw material, chemical suppliers have a certain competitive advantage over their foreign counterparts. However, he said that drilling for shale oil and gas in places such as Pennsylvania “could incredibly change the rules of the game in the United States.”. “It could lead to a renaissance in the development of new chemicals.”