Major opportunities arising from the digitization of chemical suppliers

What are the main opportunities of digital chemicals? What must leaders do to seize these opportunities?

The potential of digital 1 in chemicals is as exciting as it is in society as a whole. We believe that digitization will have a significant impact on many areas of the chemical industry, with the potential to change the value chain, bring higher productivity and more innovation, and create new market channels. Given all the excitement about digital technology, it is necessary to separate the substance from the hype and carefully assess what it means for the industry.

Let’s step back and review the changes that underpin digital technology. The generation, collection and storage of data has never been as cheap as it is now, and all this is happening at a time when computing power is reaching unprecedented heights and the cost is lower. At the same time, the digital thinking mode of the society has expanded, stimulating the willingness to participate in digital technology, as well as higher expectations for the quality of user interface and service level.

The combination of these factors opens up a new way for chemical industry. Companies can use advanced analysis technology to extract management related information from the large amount of unstructured data they generate. This information can be used to improve the operation of the plant and make more intelligent and faster decisions in the whole business process of chemical suppliers. In the wider world, the chemical industry is an important supplier to countless other industries, so the way these industries are digitalized has in turn turned into opportunities and challenges for chemical suppliers.

For the leaders of chemical suppliers, the key problem is to have a clearer understanding of what impact digitalization will bring to the industry and what impact it will bring to enterprises. Using extensive collaboration with leading chemical suppliers, proprietary research and our digital technology, we describe in this article the interaction between digitalization and the value chain and its sub sectors of the chemical industry, how digitalization affects the business processes of the industry, and the steps that industry leaders need to take.

How will digital technology affect the chemical industry? Where is the biggest impact?

Digital technology will affect the chemical industry in three main ways. The first is to use digital methods to improve the company’s business processes, which we call functional excellence. Secondly, digitization may affect the demand pattern of the final market, and then affect the value chain of the chemical industry. Third, digital development leads to the change of business model, through which chemical suppliers capture and create value for customers.

Reach a new level of functional excellence

Business processes of chemical suppliers, including manufacturing, marketing and sales, and R & D, provide opportunities for performance improvement based on data capture and interpretation. Over the past two decades, outstanding features have led to significant productivity gains. Digitalization provides a means to raise productivity to a new level.

Manufacturing is one of the largest and most accessible areas of opportunity, spanning all sectors of the chemical industry, from petrochemicals to pesticides. We believe that the use of digital in production and operation can increase the sales return by 3-5 percentage points. Most chemical plants produce a lot of data, but most of them are discarded. Instead, managers should collect data and interpret it to reveal ways to achieve higher production and throughput, lower energy consumption, and more effective maintenance. For many companies, these successes can be easily achieved by using existing it and process control systems, while companies that expand the types of data they collect may gain more.

The contribution to profits is huge. A leading polyurethane manufacturer conducted a high-level analysis of 500 million data points collected from a major production process at one of its factories. This enables it to identify ways to adjust operations, increase the isocyanate production of the plant by 10% without any capital investment, and save costs by reducing the use of high-pressure steam in the plant by 25%. The leading specialty chemicals company goes one step further: it uses advanced analytical models to improve the accuracy of production processes to a new level, and then uses models to provide detailed, real-time guidance for operators of nuclear power plants on how to adjust process parameters to optimize performance through a specially designed application.

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