But technology alone isn’t the answer. In 2019, digital transformation is no longer a future state, or something to reconsider for the next fiscal year, it’s an initiative that needs to be woven into the very fabric of an organization. The Digitalist Magazine is your online destination for everything you need to know to lead your enterprise’s digital transformation. The industry has also seen an increase in merger and acquisition activity in recent years, and this trend is likely to continue. , #MWC18, Innovation: It's More Than Just A Nice-To-Have, Three Supply Chain Trends Accelerate In Response To Current Crisis. , Disruptive Challenges New technologies, such as 3D printing, have provided new opportunities for plastics, resins, ceramics, and powders. Thorsten Wenzel is Vice President and Global Head of Chemicals at SAP. It is a group of industries that produce a wide range of products across many unique segments. data required to do so varies greatly depending on the regulatory group and can come in a variety of data formats, structured and unstructured. These players have prompted incumbents to differentiate themselves by producing smaller batches for individual customer needs and selling services, experiences, and outcomes, while being early adopters of digital technology at the business core. The industrial enterprise has one of the most compelling stories for digital transformation (DX). Jenner: I think we need to discuss the term ‘digital transformation’ first. Digital transformation in chemicals From novel process technologies to sustainable plastics, the chemical industry is in the midst of profound change. We’re seeing significant investments in state-of-the-art, world-scale chemical production facilities in all these countries. Digital technology, along with data analytics, is tremendously promising for the chemicals industry. 1. The digital journey: The starting point Digital transformation can turn industry challenges into real business value. As ARC Advisory Group learned in a recent briefing with company executives, Infor’s $675 million acquisition of GT Nexus, a leading cloud-based global commerce platform, represents one sign of the company’s commitment to helping chemical manufacturers transform their supply chains. What are some examples of B2B Industrial Distributors? ACCELERATING DIGITAL TRANSFORMATION IN THE CHEMICALS INDUSTRY Truly transformative and sustainable innovation happens when technology, people, and data are combined. and packages them in useful bundles for factories 2. FW: How would you describe the way digital transformation is reshaping operations across the chemicals industry? Angela Morris, MES Global Improvement Leader at Dow Chemical, used a symphony orchestra analogy to describe Dow’s history and progress in manufacturing execution systems (MES). Companies are selling customer experiences instead of products: It’s not about the color of the paint, but how the paint looks on the wall and fits into the larger home experience. for quality management and regulatory affairs, safely connects formerly fragmented and isolated content, processes and data beyond departments and company borders. As we learned, Infor is moving all of its products and solutions to the cloud and combining these with GT Nexus to provide a powerful network to move chemicals, track goods and provide inventory visibility. In this emerging business model, the focus is on interactive collaboration among carriers, shippers, forwarders, suppliers, and even customers. With its “five-pillar” strategy for digital transformation encompassing industry-specific solutions, design, science, internet, and the network, it appears that Infor is well positioned to help global chemical industry participants in their journey to digital transformation and the associate competitive advantages. By … Innovation Volatile feedstock prices have added an element of cost variability. ARC Advisory Group clients can view the complete report at ARC Client Portal on Office 365 or Box.com or New Client Portal on this website, If you would like to buy this report or obtain information about how to become a client, please Contact Us. This both requires and supports new business models and processes. This growing interconnectedness of industrial operations is what is meant by the now familiar term, the Industrial Internet of Things (IIoT). This higher maintenance maturity level supports broader business benefits that go beyond reducing maintenance costs. The company believes designing applications for user experience is paramount and has created an agency called “Hook and Loop” to improve this experience and help pave the way to adoption across industry. Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings. Reliability studies show that 82 percent of all assets have a random failure pattern. Advanced computing technologies are allowing these devices to be connected to each other, and to use the data in a variety of ways. If your enterprise is not already undergoing a digital transformation, the time is now. Technology Corp. Yokogawa Releases Field Assistant R2.05 that Enables Hands-Free Field Inspections. At a recent Inforum customer event, Mr. Phillips and Kurt Cavano, General Manager of GT Nexus Commerce Cloud, discussed how the combination of Infor cloud-based ERP solutions with GT Nexus Commerce Cloud has created a powerful global business network and supply chain application platform for chemical manufacturers, their suppliers, and customers. Digital transformation prepares for the interaction of all engineering and operational tools and components, such as plant management, the process control system, device design, and configuration. , Digital Chemicals Early on in this journey, ARC Advisory Group’s consultants helped the company identify the value-creating use cases and define the functional requirements needed to address the operational technolog… The systematic improvement of efficiency must extend to all areas and all phases of a plant’s lifecycle. Furthermore, incorporating batch lot tracking and other operational tools that tie into a product database, enable rapid decision support in the event of emergencies or recalls. This requires a focus on implementing a true digital core that enables a common system of record through the business. By working with retail outlets and automated sensor-enabled mixing systems, they are also moving closer to first -pass quality for custom products. Although product lifecycle management (PLM) approaches originated in the discrete industries, chemical companies are increasingly taking advantage of the benefits that effective PLM offers for product development, manufacturing, sales and support. Chemicals: Univar purchases large amounts of chemicals and distributes them in smaller loads for their clients 3. This includes development of new modular “micro” production plants that can be easily located close to either feedstocks or end customers to reduce logistics costs. What opportunities do new technologies offer companies in this space? Many processes in highly regulated industries like the chemical industry are an ideal fit for digital transformation. Moreover, with predictive and prescriptive maintenance, near-zero unplanned downtime for critical equipment can be achieved. Who could have guessed back in the 19 th century that the invention of the Yellow Pages, a book full of company contact information, would end up being a global business-to-business electronic commerce. , #Industries While, until recently, North America had seen few greenfield or expansion projects for specialty chemicals and virtually none for bulk chemicals; the competitive advantage provided by shale oil and gas created a wave of activity in both greenfield and capacity expansion projects. Anyone wishing to stay competitive in the chemical industry must continuously optimize the efficiency of their plant. It requires a mindset that is driven by a customer-first, design thinking … The expanding markets in emerging economies, combined with nearly continuous regulatory changes in established markets, make it imperative for chemical companies to be able to quickly and confidently document formula and label compliance with industry, national, and regional regulations. With more accurate and efficient automated data collection, IIoT dramatically expands the number and variety of parameters that can be monitored cost effectively with engineered algorithms or machine learning to identify problems well before they become failures. Economic and manufacturing growth in Asia has made its mark. Firms are focusing on mergers and acquisitions to remain competitive and drive growth. If you disable this cookie, we will not be able to save your preferences. By exploiting the convergence between operational and information technologies, these companies are connecting their enterprises internally, and externally throughout their supply chain. , Digital Industry This requires a focus on implementing a true digital core that enables a common system of record through the business. Digital Transformation is a buzz word that seems to be on everyone’s mind and lips these days. Despite this complexity, the document management capabilities of chemicals-specific PLM solutions can help ensure that products meet regulations from concept to retirement, even as regulations change. This talent will be key to leveraging technology to offer core business value. This includes mandates to increase safety and reduce potentially harmful emissions. Infor also recognizes the significance of Big Data and data science to transform PLM, APM and SCM processes. Auto Manufacturing Suppliers: Magna International produces and sells car bodies/chassis and seats to automakers 4. More and more, smart sensors and equipment that contain smart diagnostic features are being used in industry to generate large volumes of data. In the chemicals industry, it’s the use of technology against the right digital strategy that holds the real value. While the scale and complexity of bulk chemical manufacturing appears to be increasing; specialty chemical manufacturers, particularly in Europe, are exploring increased modularization of production assets. … Functional excellence has generated significant productivity improvements over the past two decades. Industrial Supply: Grainger sources tools (DeWalt drills, Milwaukee, etc.) Customer Experience. IN COLLABORATION WITH SAP. Digital provides the means to unlock a new level of productivity enhancement. It requires a mindset that is driven by a customer-first, design thinking perspective. Intelligent connected products and assets, along with network communications, software, and advanced analytics allow companies to redefine their approach to business processes, including enterprise asset management (EAM), product lifecycle management (PLM), and supply chain management (SCM). To do this, they must address an aging and non-digital workforce and find a way to attract new talent that embraces the digital workplace. Industry chokepoints The chemicals value chain is full of chokepoints that can be eliminated with intelligent use of digital enablers. The continued adoption of digitization among customers and suppliers extends this information loop and supports utilization of field experience to drive product innovation. This applies to both the specialty chemicals and bulk chemicals sectors. It also requires a corporate mindset that embraces agility, adaptability, and innovation. For such firms, the daily challenges of integrating operating systems into a single system have become a reality. For this to happen, companies must leverage large amounts of data to better understand their operations and their customers. Now, digital transformation in chemicals is presenting immense, largely unexplored new potential to not only increase efficiencies but to help companies design novel products and processes. , Business Model Innovation It became evident that the chemical industry … As many global industries and sectors embrace digitization in areas ranging from business processes to customer relationship management, digital transformation is becoming a smart business objective beyond just improving the core of the business. In general, there’s been a trend for global bulk and specialty chemicals manufacturers to shift production from well-established production centers in Europe, Japan, and (to a somewhat lesser degree) North America; to cost-advantaged China and India and feedstock-advantaged Saudi Arabia, which has been making a major push to increase the value of its exports and diversify its economy. The resulting digital enterprises can design, manufacture, deliver, and support products faster, more efficiently, and at lower cost. As products become more specialized, product development requires greater collaboration with customers, ingredient suppliers, packaging suppliers, and regulators. Base chemicals, paints, beauty products, fragrances, and food flavorings all have one thing in common. Recent economic and technology trends have had major impacts on the global chemical industry. Naturwissenschaftlich orientierte Manager der Chemieindustrie entdecken, dass die Digitalisierung ihnen ein Werkzeug in die Hand gibt, um ihr Geschäftssystem weniger vom Zufall abhängig und berechenbarer zu machen. Digital technology, and the data it brings, holds tremendous promise for the chemicals industry. Connectivity has shown the potential to empower millions of people, while providing businesses with unparalleled opportunities for value creation and capture. Today, the market is challenged by niche players that strongly focus on consumer demand. | In addition to enhancing external collaboration, PLM for process manufacturing closes the design-to-production loop and enables users to fine tune product formulation based on yield measurements and fluctuating cost elements. In addition to growing pressures to reduce both project-related and operations-related costs and expenditures, chemical manufacturers face increased governmental regulation. Instead of micro-level optimization, which only allows for cost-savings within your own supply chain, the doors are open to macro- level optimization—finding those optimization opportunities that lie between several systems. Users have reported that moving from preventive maintenance to predictive or prescriptive approaches provides 50 percent savings in maintenance labor and MRO materials. That’s because GT Nexus provides global order management and coordinates commerce across partners, enabling manufacturing companies to collaborate with suppliers to manage and optimize shipments to customers, and distribution centers to meet demand. All rights reserved worldwide. , Business Process Innovation A modern enterprise asset management (EAM) system provides the visibility, planning, and execution capabilities needed to improve industrial asset uptime, increase asset longevity and safety, control costs, and support the executive need for high return on assets (ROA). Overcoming these challenges is the only way to address the single largest challenge the industry faces today. During the process, they are gaining valuable customer data and insights. … Increased digitization across the value chain is another clear trend. Turn thinking into doing at Mobile World Congress 2018 in Barcelona February 26 – March 1, 2018. These include improved on-time shipments, revenue, customer satisfaction, quality/yield, and safety. Large established firms and smaller emerging competitors deal with the same dynamics. Digital Transformation Creates Efficiencies in the Chemical Industry February 8, 2020 David Cahn, SCB Contributor Analyst Insight: Every change-management consultant knows that effective transformation within a business requires a combination of people, processes, and technology. Chemical industry being asset-intensive is now facing game-changing challenges derived from the disruptive potential of digitalization. Learn more! 5-January-2018 In the chemicals industry, it’s the use of technology against the right digital strategy that holds the real value. It’s in the creation of an ecosystem focused on improving the customer experience. Hexagon’s Smart Manufacturing Solutions Portfolio Enhanced by Acquisition of D.P. ARC agrees with Infor’s CEO, Charles Phillips, that, “the future of manufacturing belongs to networked companies.” For the chemical industry this is a network of buyers, raw material suppliers, logistics providers and service partners. Keywords: Chemicals, Digital Transformation, Regulations, PLM, SCM, EAM, ERP, SaaS, Infor, ARC Advisory Group. Digital transformation at its core allows organizations to tackle disruptive changes such as marketplace fluctuation by designing new products, services, and business models leveraging digitalization. Read the Digitalist Magazine and get the latest insights about the digital economy that you can capitalize on today. Electronics Distributors: Arrow sources electronic components like capacitors and atten… The future of the chemicals industry is no longer the one-shot, blockbuster product model. The chemicals industry is more than a single industry. As chemical companies look for new opportunities in 2018, some of the greatest potential will come from digital technology. For many companies, this need is reinforced as competitors, partners, suppliers, and customers begin employing digitized business processes of their own. In today’s highly regulated and competitive environment, chemical companies must look beyond traditional industrial conventions and business norms and focus on achieving the desired outcomes via digital transformation. The global chemical industry can benefit from such transformation, which can act as a catalyst to unlock enterprise-wide business innovation. Digital transformation is an inevitable part of any industry at present. In general, the entire chemical industry is seeing a move toward increased automation to reduce costs and compensate for the growing skills shortage. We are no longer using cookies for tracking on our website. With the traditional chemical supply chain logistics model in which only one component at a time can be optimized, companies are forced to view their respective supply chains as a cost center instead of a strategic, competitive work process. There is also the threat of the innovative companies that have reimagined their markets, products, services, and technology. For many companies, this need is reinforced as competitors, partners, suppliers, and customers begin employing digitized business processes of their own. So changes in production, oil prices and investment are the perfect time to dive in, anaylsts explained. Infor is building both a platform and applications to manage the supply chain and connect general ledger within the ERP-to-inventory systems of the expanded chemical supply chain. Modern technology, e.g. Rockwell Automation Adds to its Maintenance Solutions Portfolio by Acquiring Fiix Inc. Hitachi Develops IoT Platform for Buildings’ High Added Value Required for the New Normal, Device Charging Stations Problem Solved as LTTS Deploys an Effective Solution, Digitalization Turns Around a Municipal Water Treatment Company, Itus Launches Asset Performance Management Solution. The best example of the smoothest digital transition is Yellow pages. More information about our Privacy Statement, The Internet of Things (IoT), leveraging sensors to capture data from manufacturing, storage, and distribution, The cloud, a platform to support a common system of record for both suppliers and customers, Analytics, to correlate supply data to product quality and customer satisfaction, Machine learning, to assist in predictive maintenance of operational equipment, Blockchain, to better track transactions for assets, materials, and products. Digital Transformation of the Chemical Industry, Digital Transformation Council (End Users Only), Digital Transformation Council for Smart Cities, ABB Provides Electrification and Automation to Sustainable Underground Mining Project, Itus Digital Announces Acquisition of nextAPM, UK-based Maximo Solutions Provider SRO Solutions Being Acquired by The Cohesive Companies. As Marcelo Carugo, senior director Chemical and Refining Solutions, Emerson Automation Solutions (St… , Digital Disruption , Digital Strategy Infor’s strategy is to create industry-specific solutions with mechanisms for user customization via Amazon Web Services (public) cloud deployments. ACCELERAT T TST T S STY 2 CT 2017 T S TABLE OF CONTENTS 3 7 12 14 17 The Innovation Challenge Enabling Digital Innovation The Value of Innovation The Winning Edge Taking the Next Step. These large producers valued operational efficiency over flexibility and adaptability. Most companies have one or more digitalization initiatives underway as demonstrated in this survey conducted at the 2019 Emerson Exchange during the Chemical Industry Forum session. As a result, many firms have moved towards mergers and acquisitions to remain competitive and drive growth. These technologies can all play a role in driving business value. In the past, large producers dominated the market. It also requires a corporate mindset that embraces agility, adaptability, and innovation. , Digital Transformation Since these are not simple to weave into user experience and work process, Infor has created a dedicated data science lab for machine learning and advanced analytics on the campus of the Massachusetts Institute of Technology (MIT). Chemical players are at varying maturity stages of their digital transformation journey according to quantitative analysis Voice of the Industry • Almost 40% of executives want their company to be digital trailblazers (or disrupters) over the next 3 years • The adoption of open and semi-open platforms are Companies that effectively employ PLM to collaborate and manage data, will develop new products faster, introduce them at lower cost, and bring them to market in less time. chemicals industry. 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