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Chemical companies must accelerate innovation to capture fast-changing market opportunities

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There are many opportunities in today’s chemical industry. New markets, new products, new partnerships – they seem to be popping up everywhere. In addition to new opportunities, there are also new regulations and greater demands for sustainability. As exciting as all this may be, it also adds complexity to the task of new product development.

A company’s success in this complex environment requires new levels of agility. Digital transformation is crucial for chemical companies hoping to navigate these complex new areas. And this transformation needs to spread throughout an enterprise. According to EY’s survey, it’s clear that no function will be unaffected by digital technologies. Industry decision-makers expect that digitalization will affect their:

  • innovation and development (56%),
  • customer interface (56%),
  • processes and efficiency along the value chain (55%),
  • logistics and distribution (62%),
  • sales and order management (59%), and
  • customer service (58%)

While most people agree that accelerating innovation and getting more sustainable products to market faster is crucial, the unfortunate reality is that chemical firms still rely on age-old processes and incumbent technologies. There’s no single version of the truth, resulting in a significant amount of work duplication and a lack of collaboration.

Existing ways of working can stymie innovation. One common situation is that key stakeholders don’t have access to the information they need to manage and make good decisions. As a result, business leaders don’t know which projects are working and which are failing. How can you make fast, confident decisions on any given project, product, or market scenario when it takes days or weeks to gather all the right information for that circumstance?

The success of chemical organizations hinges on the ability to innovate. Sadly, breakdowns in innovation management are an enormous problem throughout the industry. Gartner research shows that 85% of growth stalls stem from avoidable innovation management factors, which means that investments in new products, services and business development aren’t achieving desired returns.

Chemical companies must become more agile and be able to innovate at speed. They must produce viable new product ideas that the market will embrace and operate with high efficiency to meet strategic targets. To do this, they need to look at moving beyond managing and manually sharing conventional documents.

Chemical Innovation

As George Harrison said, “If you don’t know where you’re going, any road will take you there.” In the chemical business, companies need to be clear on their primary goals and the “roads” they’ll take to reach those objectives. With this in mind, here are three things every chemical company should be doing and three reasons why each initiative is important.

1. Make innovation the heart and soul of the organization

  • Identify and clearly communicate the organization’s key priorities. It must be clear how all initiatives contribute to the future growth of the business – and which new initiatives are strategically desirable.
  • Create a roadmap for new product ideas – Dynamic long-term roadmaps will keep a company innovating at pace. It will help the organization identify the products needed to meet those goals, the technologies that must be invested in to get there, and the proper order projects should be completed and products introduced to the market to meet targets.
  • Adopt one centralized system that is the single source of truth. This will bring transparency to information and processes and expedite the product development cycle as a result.

2. Make “best ideas” a foundational part of standard operations

  • Centralize digital information across business units - A single, centralized source of truth is the key ingredient for high-performing It will ensure that the best ideas are acted upon and shared throughout the organization.
  • Make more informed decisions on which ideas are worth pursuing or continuing - Prioritize those ideas that best meet your current objectives, while quickly highlighting and rejecting those that are unfeasible or unprofitable. Don’t be afraid to say no, especially if you are not sure.
  • Remain in compliance with ever-changing, worldwide regulation – The ideas that stimulate innovation must also be in compliance with continuously evolving global regulations and industry standards.

3. Make optimization of processes an ongoing initiative

  • Automate new product development (NPD) – Companies that blend in agile ways of working with a Stage-Gate® process for areas such as scoping, feasibility and commercialization are in the best position to succeed.
  • Enhance traditional R&D capabilities - With all information available in one centralized location, companies can identify gaps, stimulate innovation and identify key market differentiators.
  • Communicate progress clearly across the organization - People, systems, and data from across the organization must be able to communicate crucial information about various projects and portfolios faster and more effectively.

Cloud-based solutions, such as innovation management systems, enable forward-thinking companies to adapt their product portfolio based on market changes and strategic goals. These solutions also create clear cost and performance targets and then achieve them through meticulous tracking.

Built with the unique needs of the chemical industry in mind, Sopheon's Accolade, a single innovation system, gives companies the agility needed to adapt strategies quickly to respond to the fast-changing industry and business landscape. For more information on Sopheon's Accolade, please visit here.

We also invite you to download our E-Guide on this topic, “How chemical companies can achieve a new level of enterprise performance” which provides useful insights on how to innovate, operationalize, and optimize your business. Download it now

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