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In the modern business world, traceability is no longer a luxury — it is a necessity.

Nowhere is this more true than for chemical companies where the pressure to demonstrate the origin, composition, and safe disposal of products is most vigorous. In Europe, this is driven by a mix of stringent regulations such as REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals), growing customer demand for transparency, and increased scrutiny around environmental and human health impacts.

At the heart of a chemical product’s traceability is the concept of product lifecycle management. Known simply as PLM, product lifecycle management involves collating the data on production processes, raw material sources, handlers, designers, and sales information from a chemical’s inception to retirement.

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This transparency is vital not just for legal compliance, but also for rapid responses to quality issues, recalls, or sustainability audits. Without managing traceability, chemical companies risk non-compliance, reputational damage, and financial penalties.

Moreover, as the EU moves towards a circular economy and climate-neutral goals, traceability supports sustainability claims and helps companies measure progress against green targets. In essence, it is becoming a core part of the chemical sector.

As is to be expected, there are numerous sets of laws and standards to be met with regards to traceability. As the British Chemical Industry Journal noted in a recent report, “Whether dealing with REACH, OSHA, EPA, CLP, or international standards like ISO 9001 or GMP, chemical manufacturers face some of the strictest requirements in global industry.” Concluding that, “A traceable production process is often a non-negotiable prerequisite for gaining market access or passing audits.”

But because most chemical products are manufactured as a composite of many chemicals and industrial feedstocks, establishing a clear path can be a daunting task.

Fortunately, the Chemical Industry Journal also gives advice on how best to achieve traceability by breaking the task down into more manageable portions. When doing so, areas to be considered include:

Clear Documentation and Communication: Make certain that traceability data, such as batch records, safety data sheets (SDS), and COAs (Certificates of Analysis), is readily available and regularly maintained. If quality problems arise or if recalls become necessary, open and honest communication with suppliers and consumers can help improve credibility and minimise miscommunication.

Labelling, Barcodes, and GHS Compliance: Physical identification of a chemical product is still necessary even with increasingly digitalised settings. For inventory, shipping, and safety compliance, labelling systems should be able to scan barcodes and integrate with ERP systems to connect physical containers with digital data.

Process Tracking and Operator Accountability: Time stamps and operator information should be recorded at every stage of the production process, from weighing and mixing to reaction monitoring and packaging. In the event of deviations or incidents, this offers a documented trail and facilitates root-cause analysis.

Lot and Batch Tracking: Manufacturers of chemicals must use lot or batch numbers to keep track of their raw ingredients, intermediates, and final chemical products. This promotes adherence to safety data sheets (SDS) and regulatory filings and provides complete visibility into which ingredients went into which finished goods.

Make Use of Specialised Traceability Software: The demands of modern chemical manufacture are often simply too great for manual processes to handle. Operational effectiveness, compliance, and real-time visibility are guaranteed if ERP system software with integrated traceability is employed.

Not only is this list not exhaustive, but chemical companies may also adopt some, none, or all of the approaches as they best see fit. For example, the use of traceability software may be a vital tool for one chemical supplier but may be too expensive and unnecessary for another.

Here are how some chemical companies have approached this challenge.

1. ICA Group: Centralizing Compliance with Trace One SDS Authoring

ICA Group, a global manufacturer of wood and glass coatings, faced challenges in keeping up with rapidly changing regulations like REACH, CLP, and GHS. Their existing system struggled to stay current with safety data sheet (SDS) information, leading to compliance risks. By adopting Trace One SDS Authoring, ICA Group centralized its compliance processes, ensuring up-to-date regulatory data and streamlined workflows.

2. BASF: Digitalizing Supply Chain Traceability

As a much larger chemical business, BASF were able to implement their own digital traceability system. Called ‘BASF 4.0’ it is a traceability function which utilises sensors, blockchain technology, and data analytics to achieve end-to-end tracking of raw materials and chemical products. By doing so, BASF hope to enhance efficiency in the paperwork process (now digital), reduce costs, and improve customer satisfaction. Additionally, BASF leveraged traceability data for process optimization and risk reduction.

3. REACHLaw: Supporting Multi-Regional Regulatory Compliance

A North American chemical manufacturer engaged REACHLaw to navigate compliance with EU REACH, Turkey’s KKDIK, and UK REACH regulations. REACHLaw acted as the Only Representative in each region, facilitating registrations and ensuring market access.

Traceability is no longer a back-office concern for chemical companies—it is a strategic imperative. Whether the goal is regulatory compliance, operational excellence, or sustainability leadership, robust traceability systems are fundamental to success.

As demonstrated by chemical industry leaders like ICA Group, BASF, and REACHLaw, investing in digital tools, process transparency, and regulatory foresight not only mitigates risk but also creates competitive advantage. In an era of complex supply chains and rising stakeholder expectations, traceability is the thread that holds accountability, safety, and innovation together—and chemical companies which ignore it, do so at their own risk.

Photo credit: Jean Woloszczky on Unsplash, Leslie Saunders, Chelaxy Designs, Alberto Rodriguez, & Guerrilla Buzz

Much has been written about the transformative power of AI for the chemical industry. But much of the discussion has been around the efficiencies being made at large chemical facilities—the energy savings, the streamlining of processes, procurement control,d more.

But what about smaller operations and chemical suppliers? How can these chemical businesses gain from AI?

This was a topic of discussion at the recent Global Chemical Regulations Conference held in Washington DC, this April.

The key takeaways from this were:

Image Recognition:

While many AI users are familiar with interacting through text or voice, one of the lesser-known features of modern AI is its image recognition capability. This technology allows AI systems to ‘see’ and interpret visual data—an asset particularly useful for smaller chemical companies with limited staff for quality control.

For example, image recognition can be used to automatically inspect packaging for errors, such as incorrect labelling or missing hazard symbols. It can also detect defects or damage in goods upon delivery, such as cracked containers, discolouration, or leaks, which may otherwise go unnoticed until it’s too late. All of which helps towards ensuring compliance with safety and regulatory standards.

As these systems can operate continuously and consistently, they reduce the risk of human error and allow employees to focus on more strategic tasks.

Chatbots:

With fewer staff in the sales team, smaller chemical companies can make significant savings by using AI as the first point of contact for answering client enquiries, suggesting products, or even handling some orders.

But more than just speed, generative AI chatbots can streamline communication between sales teams and technical departments, reducing delays and enhancing customer responsiveness.

“One of the most compelling use cases I’ve seen for GenAI in the chemical industry is in supporting sales,” noted Brendan Boyd, former R&D executive at a Fortune 500 chemical company. “Getting the right information quickly is crucial.”

Risk Assessment:

AI can analyse safety data to predict potential hazards and recommend improvements. However, the panel noted the importance of ensuring that the AI was using the correct data set.

“Garbage in equals garbage out,” said Fitch. “We’ve heard that saying a lot, and so it’s very important that we are using optimal data when we are training models, so that we are making sure to get the most valid and reliable results.”

Regulatory Compliance:

Wading through countless pages of regulations is a laborious, time-consuming task that many smaller chemical companies lack the workforce to manage. However, it is absolutely necessary if delays and problems are to be avoided further downstream.

Sifting through heaps of text and data is an ideal task for AI, as it can quickly check if procedures and products meet safety and environmental regulations. It can also confirm that labelling is adequate and check on what paperwork is required for export.

For example, one of the Global Chemical Regulations Conference panel members, Rebecca Morones, a senior product steward at BASF, explained how she often uses Microsoft Copilot to summarize EPA risk evaluations.

However, she also cautions that while the responses were a helpful outline, AI should not be trusted to perform in-depth analysis of information.

“You still have to read the documents,” she said. “But I feel like there’s also 200 pages it’s sifting through, which does at least help get you to kind of where you’re looking for and give you a great oversight.”

Beware of Hallucinations:

The panel was also quick to highlight the dangers of AI supplying incorrect information—a phenomenon commonly referred to as hallucinations. For example, when Morone’s colleagues asked AI to determine the density of a safety data sheet or the amount of a TSCA fee, the platform returned an inaccurate response.

“Anytime it comes to regulatory aspects, you should probably have them come to the regulatory experts,” she explained. “Don’t rely on what they’re seeing or what they’re doing.”

It may also happen that AI can return references that appear authentic but actually do not exist.  For this reason, the panel suggested that any material created by an AI model should be independently reviewed by personnel to confirm its legitimacy.

“With that lesson, it’s really important that not only are we reviewing the things that are coming out of any AI model, but also that we’re verifying them,” added Seneca Fitch, a Director at the chemical business consultancy ToxStrategies. “Because something could certainly sound logical, it could certainly look real, and yet it’s not. It’s false information and that hallucination, that’s not rare.”

“So, if your businesses are using this,” cautioned Morones, “just make sure that they are aware of these hallucinations.”

One further way to confirm an AI response’s accuracy, was to ask the question many times, or even on different AI tools.

“If the question or the task might be repeated over and over again, you want to ensure that you’re getting similar performance for each iteration of the task,” noted the IS EPA’s Sean Watford.

Prompt Training:

The final point raised by the team was not so much an advantage to be gained, but advice on how to get the most out of AI. This is because, like any new tool, staff will benefit from proper training to gain the full benefit of what can be achieved.

“I think that the most practical advice is that it (AI) is a computer, and it uses logic,” said Fitch who recommended users adopt a computer-like way of thinking when prompting AI.

This was a view supported by Morones, who suggested keeping instructions simple. For example, she suggested imagining instructing a computer in how to make a sandwich. “It’s not going to understand, ‘Grab two slices of bread,’” explained Morones. “You have to be very specific for what you’re doing.”

While AI is often associated with large-scale industrial transformation, it’s clear that smaller chemical businesses have just as much to gain—if not more—from adopting these technologies. From streamlining customer interactions with chatbots to leveraging AI for compliance, safety checks, and even basic administrative tasks, the opportunities are both practical and powerful.

However, with great power comes great responsibility: proper training, data quality, and human oversight remain essential.

For small chemical operations looking to stay competitive, AI isn’t just a futuristic concept—it’s an accessible tool that, when used wisely, can deliver immediate and meaningful benefits.

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