Chemical suppliers improve the management of their portfolios

Given these different seller and buyer perspectives, chemical suppliers can improve the management of their portfolios by:

Simplify converter portfolio: companies should build a “no fancy” set of products by removing unnecessary SKUs, and then focus on developing innovative products for converters. However, in doing so, they should be careful not to exclude products related to the manufacturer – which is particularly important, as manufacturers seem to value products that are widely and in depth.

Reassess service mix: companies should assess their technical support, joint solution development, market intelligence, inventory, analysis and other service products, and have a clear understanding of the services that customers really value. This is particularly important for manufacturers and buyers, because they value them more. Chemical suppliers can also increase the use of automation to provide these services at the lowest cost. In addition, they can adopt a multi-channel approach so that they can provide different services to different types of buyers in a targeted manner.

Deepen understanding of cost: the company needs to have visibility and transparency on the cost of serving customers. This is the key to shaping a profitable portfolio and avoiding the complexity and characteristics of the nature of no one willing to pay for it. To succeed in this regard, the company can benefit from the widely used CRM system, strong data management and analysis ability, and objective evaluation of the products provided by the company compared with the competitors.

Refocus on product innovation: companies should enhance product innovation capabilities and invest in reducing the time of launch of new converter products. To do this, they may mobilize some innovative capital and talents from the businesses they serve for manufacturers, because they currently overestimate the importance of these attributes to this buyer group.

Overall, the study points out how chemical suppliers can more closely integrate their product and service mix with customer needs. This not only helps them better meet their customers’ needs and increase their income, but also help them rationalize their portfolio, reduce costs and complexity, and focus on the most important things that are often scarce to their customers – ultimately, on their own bottom line.

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