Continuing review of facets of the operating model to meet the new realities of doing things is necessary to assure business agility
Bringing together the best innovation, continuous improvement and considerable intellectual capital has always differentiated leaders in the chemical business. This reality has, however, been brought into clearer — and more urgent — focus as a result of the global pandemic. There are many examples of businesses that have been rewarded for their investments in research and development, both in terms of value creation as well as their overall effect in society.
This time, however, the motivation has more to do with improving the response to the global pandemic, supporting the wellbeing of citizens and adapting to a new environment with rapidly evolving demands. As the pandemic continues and businesses are compelled to revise their strategies to operate under Covid-19 conditions, the concept of what drives value may change dramatically. As a geographically diverse industry, the crisis has compelled the sector to revisit processes, production, innovation, networks and talent optimisation, using a unique set of lenses.
The industry continued to forge ahead amid intensifying pressure from elevated demand for hygiene products and personal protective equipment. Alcohol and perfume manufacturers have effectively (and almost overnight) switched lanes, accelerating the production of essentials such as hand sanitisers/hand rubs, disinfectants and chemicals/consumables required in the medical field. Car and appliance manufacturers have taken to producing ventilators, while clothing manufacturers (including high-end brands) are manufacturing face masks and hospital gowns.
These changes are demonstrating the dexterity of businesses — not just in the chemicals industry but across diverse sectors. It has also tested the resourcefulness of businesses in unexpected ways, challenging creativity in how customer needs are pre-empted and expectations exceeded.
Given the global interconnectedness of the chemical industry, businesses had been faced with the fundamental risk of having production sites far from end-markets. Thus, a prudent response to managing supply-chain vulnerability entailed considerable readjustments that sought to re-engineer operations and minimise dependencies.
As the market continues to experience the effects of the disruptions, the ongoing review of other facets of the operating model to meet the new realities of doing things is necessary in assuring business agility. Chemicals businesses will be particularly well served if they focus astutely on better controlling their balance sheet to maintain resilience. This includes more judicious inventory and creditor management, renegotiating repayment terms, improving cost efficiencies and bolstering working capital.
These are all fundamental approaches in yielding positive results, beyond the immediate situation and the short term and is instrumental in demonstrating dexterity to the business’ stakeholders and using that dexterity to meet societal needs.
Relevant innovation and thinking out of the box to address the needs arising from this global crisis, no longer presents an advantage. It is a critical necessity to keep the lights on and for the chemicals industry, particularly, is vital in supporting the wellbeing of our population and adapting to the new environment. Although certain developments were already on the cards, it is evident that Covid-19 has dramatically accelerated the pace of implementing certain time frames by 50% (or even more).
Some of the more notable developments that businesses can learn from the recent re-engineered technological adaptations include:
- Drones that are being used to disinfect public areas in countries such as China, India and the UAE.
- Robots that are limiting person-to-person contact by delivering medical supplies and are being used to disinfect hospitals.
- Artificial intelligence algorithms that play an invaluable role as cameras in public areas are equipped with thermal sensors to identify those who may have a high temperature and possibly fever.
- Smart tools that are increasingly being used for contact tracing and tracking of quarantine violations, among other uses.
It stands to reason that technology, innovation and creativity are largely defunct if the talent doesn’t exist to manage these processes and extract proper value. Achieving resilience and growth will take nothing less than the highest levels of performance, adaptability and responsiveness. The role of human resources must evolve — and meaningfully so — to stay ahead of the curve. The future fitness of businesses thus relies heavily on continued investment into upskilling employees and encouraging progressive thinking as well as approaches.
This continues to be an unprecedented and demanding test of business agility, but as a global nation, the chemicals industry is winning — in so many ways, presenting lessons that are valuable within any business context.
• Gobalsamy is CEO of Omnia Holdings.