ChemWeek Features ChemVM Digital Matching Tool
ChemVM cofounders Michael Van Marle and Erik Viens sat down with Chemical Week senior editor Vincent Valk to discuss the company's chemical services matching tool, its anticipated value for the industry, and the benefits of digital transformation to chemical buyers as well as toll, custom and private label manufacturing services.
You can read the full article here. Additionally, on the ChemWeek podcast, Erik and Vincent discussed the chemical industry's history of digital technology implementation and why the market is now ripe for adoption. Their conversation will be published as an episode later this week. Below is an abbreviated Q&A – once the episode is live, we will link to it here.
ChemWeek: You have a long track record working with digital commerce solutions in the chemical industry. Tell us about your career and the roots of digital commerce in the chemicals sector.
Viens: Many aren’t aware of the tracks that have been laid in the chemical industry for digital commerce starting as early as the 80’s when I was a brand new chemical engineer. My initial experience with electronic communications came with DuPont in the mid 80’s where we offered voicemail services to my customers - that was revolutionary! Eventually proprietary email crossed company boundaries and public email became mainstream as did document sharing via Electronic Data Interchange.
Industry and sub-industries came together to form working committees to standardize message formats and DuPont, Dow and others were very active in these groups. I grew up in polymer fibers and there were several groups working for both ANSI standards and European EDIFACT across multiple industry groups by the late 1980’s. In fact, my first assignment for DuPont in Europe was to help drive customer communications electronically.
ChemWeek: Why was the automotive industry such a key early driver of this?
Viens: The automotive industry was the first to see the value in digital communications and used their immense commercial power to demand adoption. Since companies like DuPont sold hundreds of dollars in chemical products for every car produced, there was really no choice but to engage. The “big 3” truly kick-started this space, which drove messaging standards and transformational process changes like “just-in-time” and other manufacturing and commercial process step changes.
ChemWeek: In the early dot-com days, there were some platforms that were trying to move customer transactions online in a way that was not really done before. Can you describe some of these services?
Viens: Just before and after the new millennium, ecommerce across many industries but especially consumer facing goods and services reached a tipping point, creating excitement about the future of digital commerce for the chemical industry. This resulted in multiple start-ups, names like ChemConnect, ChemMatch, SpecialChem, Omnexus, and Industria, among others. Most of these were consortiums (or close partnerships) of chemical providers such Dow, DuPont and Rohm & Haas and their goals were to create “neutral” market places and to push technical focus to more interactive and consumer-like business processes that included order entry and tracking, and eventually even towards experience-based processes like product expert recommendations and advocating.
ChemWeek: These platforms, generally, were not widely adopted. Why?
Viens: Our products can have critical safety and environmental consequences; the complexity of product selection and the logistical details of many transactions can make digital transformation more difficult than other industries. Twenty years ago neither the technology maturity nor the confidence in the person working the process was high enough to sustain more than the most trusted routine business using these services.
Further, the monetization model necessary to support the investment that was made in the platforms, the many ecommerce companies and employees, proved too much for the participants.
ChemWeek: Interest in ecommerce has gained steam again over the past several years. What’s behind this? Has the industry changed, has the technology changed, have the customers changed?
Viens: All of the above! Our industry is hugely complex - to this day we are the only large industrial market that focuses only 10% of sales thru 3rd party distribution. I see three trends driving this convergence that make this time different than any previously:
- Technology drivers, specifically advancements with cloud computing, AI and IoT
- Business drivers: namely disruption of the value chain, big data and consolidation of the market
- Societal drivers with the next generation workforce, customer’s changing expectations, and further acceleration and disruption from COVID-19
After forty years in the industry, and having seen many stops and starts on digital commerce and communication, to me, we’re at the perfect storm of these drivers all coming together to make this THE time for digital transformation to take hold in the chemicals space. This is why software companies like ChemVM will succeed. The chemical services space, which is about 10% of the $4T global market, is highly underrepresented digitally and we’re using technology to match people needing chemical services with the optimum chemical manufactures that can produce those individual products.
Other chemical companies are making unprecedented digital infrastructure investments and more software companies are starting and gaining traction in the chemical space. Of the millenium startups, for example, today SpecialChem (combined with Omnexus) is still focused on product in specialty and polymer products, and Elemica morphed more to focus on technology platform to enable connection vs a product focus.
I’ve been hoping for this for our industry for years, and I’m so excited to see it finally happening. It will bring so much value to all parties and we’re thrilled to be playing our part in the chemical services space to bring customers and toll and custom manufacturers, packagers and formulators closer together.
Chemical Suppliers Get Started with ChemVM
Chemical toll and custom manufacturers as well as contract formulators, packagers, and warehouse operators can register at chemvm.com/register.
Chemical Process Engineers and Procurement Leaders Get Started with ChemVM
Chemical procurement and supply chain leaders, chemical process engineers, entrepreneurs and other buyers needing a private label product made, market testing, production outsourcing, or formulation and process engineering support can get started by entering their project at chemvm.com/customers.