The chemical industry is facing major challenges, with an urgent need for action. However, now is precisely the time to lay the groundwork for a successful recovery once the current downturn has been overcome. The study “Success Factor Supply Chain Management and Logistics in the Chemical Industry 2024”, conducted by Solventure, Aimms, and Miebach, examines key trends and challenges, the role of digitalization and artificial intelligence (AI), and planning strategies in the European chemical sector. The study begins by asking: What are the current trends and challenges in the chemical industry? This broad question was broken down into specific trends and their perceived significance according to the study participants. Birgit Megges interviewed Klaus-Peter Jung, Partner at Miebach, about the key findings of the study.

CHEManager: Mr. Jung, the study reveals that the majority of participants consider rising cost pressures on warehousing and transportation to be the most critical issue, while CO2 neutrality is currently a lower priority. Were you surprised by this result?

Klaus-Peter Jung: Not at all. This finding is reflected not only in the predominantly negative public reports about the state of the industry but also in our daily consulting work. In the short term, many companies are primarily focused on cost reduction and cost avoidance, leaving CO₂ neutrality as a secondary concern.
However, it’s also important to acknowledge that logistics contributes only a small share of CO₂ emissions in the chemical industry — far less than in other manufacturing sectors or retail. Moreover, there is a “natural correlation” between reduced transport costs and lower CO₂ emissions: shipping is cheaper and more environmentally friendly than air freight, full trucks are more cost-efficient and eco-friendly than half-empty ones, and larger shipments are more economical and sustainable than multiple small ones.

“Many companies are actively exploring AI and its applications.”

You explored how well the European chemical industry is prepared to tackle current challenges. What insights did you gain from the responses?

K.-P. Jung: Following the boom years of the early 2020s, the industry experienced an abrupt downturn for which, by its own assessment, it was not well prepared.

Looking at individual aspects, we found that only about half of the participants consider themselves ‘very well’ or ‘well’ prepared in terms of ‘transparency through enhanced communication and close collaboration’. This figure drops to roughly one-third when it comes to handling ‘rising cost pressures on warehousing and transport’ or ‘aligning logistics within the chemical supply chain with customer and product-specific requirements’.

Many companies are in ‘work-in-progress’ mode, addressing these challenges but without clear solutions yet. Some even admit they are inadequately prepared — or not prepared at all — for certain issues.

Digitalization and AI are hot topics in supply chain management and logistics. How widespread are such solutions in the industry?

K.-P. Jung: Simply put: too limited. On the positive side, many companies are actively exploring AI and its applications. However, many still struggle to identify suitable use cases beyond inventory management, forecasting, and workforce management, as well as highly administrative, repetitive applications like customer service chatbots. Nevertheless, there is a sense of momentum in the search for AI applications — but with limited budgets.

I am far more critical when it comes to advanced digitalization tools beyond AI, such as digital twins and control towers. Given past Black Swan events like Covid-19 or the Suez Canal blockage, one would expect companies to have recognized the urgency of the situation and invested in digital twins to strengthen supply chain resilience. Unfortunately, we see that these proactive risk management measures have often been sacrificed in favor of short-term cost-cutting.

“The industry is still far from achieving full digital transformation.”

The study also examined how chemical companies approach planning at the strategic, tactical, and operational levels, who is involved, and what tools are used. What were the key takeaways?

K.-P. Jung: The chemical industry has a very different planning approach compared to other industries, such as consumer goods.

Strategic planning, such as decisions on production footprint or inbound and outbound networks, is typically conducted only every two to three years or on a need-to basis. Only a few companies follow a structured annual planning cycle.

In most cases, these strategic planning tasks fall under line management, though over 40% of respondents also rely on external consulting firms. External experts bring specialized methodologies, tools, and experience, while also freeing up internal resources and often delivering faster and higher-quality results — many companies still rely on Excel for these tasks.

Tactical planning follows various cycles: while inventory optimization tends to be weekly, S&OP planning rounds occur monthly in the vast majority of companies. Supply chain teams take the lead in tactical planning, whether for demand planning, inventory management, or supply & production planning. The logistics department is almost equally involved, particularly in demand and inventory planning, while production teams naturally take the lead in supply and production planning. Interestingly, very few companies assign these responsibilities to their sales teams, and if they do, it’s only for demand planning or S&OP.

Across all three planning levels, one of our study’s most critical findings is that Excel remains the dominant tool. While Excel is flexible and easy to use, it is also prone to errors and requires extensive manual effort. This highlights that the industry is still far from achieving full digital transformation.