In the chemicals industry, it’s the use of technology against the right digital strategy that holds the real value. … 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. 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). 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. Turn thinking into doing at Mobile World Congress 2018 in Barcelona February 26 – March 1, 2018. We are no longer using cookies for tracking on our website. Digital transformation is emerging as a driver of sweeping change around the world. It also requires a corporate mindset that embraces agility, adaptability, and innovation. These large producers valued operational efficiency over flexibility and adaptability. Manufacturing operations present one of the biggest and mo… Industry chokepoints The chemicals value chain is full of chokepoints that can be eliminated with intelligent use of digital enablers. It is a group of industries that produce a wide range of products across many unique segments. It requires a mindset that is driven by a customer-first, design thinking … 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. 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. By exploiting the convergence between operational and information technologies, these companies are connecting their enterprises internally, and externally throughout their supply chain. , Digital Strategy The industrial enterprise has one of the most compelling stories for digital transformation (DX). The systematic improvement of efficiency must extend to all areas and all phases of a plant’s lifecycle. Infor also recognizes the significance of Big Data and data science to transform PLM, APM and SCM processes. Digital provides the means to unlock a new level of productivity enhancement. Keywords: Chemicals, Digital Transformation, Regulations, PLM, SCM, EAM, ERP, SaaS, Infor, ARC Advisory Group. 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. 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. But this requires those systems to be connected via a common platform. Chemical companies’ business processes, including manufacturing, marketing and sales, and R&D, present opportunities for performance improvement based on data capture and interpretation. The Chemistry and Advanced Materials industry played a leading role in previous industrial revolutions, through its products and innovations, … This requires a focus on implementing a true digital core that enables a common system of record through the business. Increased global competition drives the need for greater efficiencies and cost reductions across the industry. 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. These include improved on-time shipments, revenue, customer satisfaction, quality/yield, and safety. To avoid failures on the 82 percent of assets, new, IIoT-enabled proactive solutions replace conventional reactive or preventive maintenance with far more effective predictive and prescriptive maintenance approaches. Digital transformation is an inevitable part of any industry at present. Dow began its digital transformation in 2008 addressing the need for vertical integration between the enterprise and the shop floor. Die Transformation wird unumgänglich sein. When supported by a common SCM platform, this approach can drive a powerful network effect with the benefits of universal connectivity among participants. Anyone wishing to stay competitive in the chemical industry must continuously optimize the efficiency of their plant. for quality management and regulatory affairs, safely connects formerly fragmented and isolated content, processes and data beyond departments and company borders. Thanks to digital transformation, chemical industry participants are realizing the following advantages: PLM and chemical formulation processes are moving toward closed-loop product and chemical formulations to support continuous product improvement, EAM processes are expanding to encompass predictive and prescriptive maintenance, thus reducing unplanned downtime, cost, and risk, SCM processes can now support omni-channel supply chain concepts to improve both the highly integrated chemical supply chain and customer experience. Auto Manufacturing Suppliers: Magna International produces and sells car bodies/chassis and seats to automakers 4. Connecting the physical and financial aspects of the chemicals business will fundamentally change behavior and work process. Learn more! By … What opportunities do new technologies offer companies in this space? If you disable this cookie, we will not be able to save your preferences. Moreover, with predictive and prescriptive maintenance, near-zero unplanned downtime for critical equipment can be achieved. IN COLLABORATION WITH SAP. The continued adoption of digitization among customers and suppliers extends this information loop and supports utilization of field experience to drive product innovation. © Digitalist 2020. … Hexagon’s Smart Manufacturing Solutions Portfolio Enhanced by Acquisition of D.P. Increased digitization across the value chain is another clear trend. 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. AspenTech, a software company born out of MIT, is now playing an important role in helping chemical and petrochemical companies in their digitalization efforts – … This means that every time you visit this website you will need to enable or disable cookies again. 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). Digital technology, along with data analytics, is tremendously promising for the chemicals industry. This includes mandates to increase safety and reduce potentially harmful emissions. This requires a focus on implementing a true digital core that enables a common system of record through the business. From the customer perspective, digital platforms in chemicals can be categorized along two dimensions: 1) single manufacturer versus an “open platform,” which includes several manufacturers, and 2) standard transactional platform versus one geared toward industry expertise. | chemicals industry. 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. 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. Innovation However, increasingly, a company’s global supply and trading network represents a living (ideally connected) ecosystem of supply chain partners and e-commerce. Digital Transformation is a buzz word that seems to be on everyone’s mind and lips these days. It is a group of industries that produce a wide range of products across many unique segments. Connectivity has shown the potential to empower millions of people, while providing businesses with unparalleled opportunities for value creation and capture. If your enterprise is not already undergoing a digital transformation, the time is now. 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… 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. Companies are using an integrated digital supply chain along with consumer data to create a direct-to-consumer model. These technologies can all play a role in driving business value. Thorsten Wenzel is Vice President and Global Head of Chemicals at SAP. In the chemicals industry, it’s the use of technology against the right digital strategy that holds the real value. 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. In general, the entire chemical industry is seeing a move toward increased automation to reduce costs and compensate for the growing skills shortage. But technology alone isn’t the answer. The global chemical industry can benefit from such transformation, which can act as a catalyst to unlock enterprise-wide business innovation. Digital transformation in chemicals From novel process technologies to sustainable plastics, the chemical industry is in the midst of profound change. Users have reported that moving from preventive maintenance to predictive or prescriptive approaches provides 50 percent savings in maintenance labor and MRO materials. Large established firms and smaller emerging competitors deal with the same dynamics. Overcoming these challenges is the only way to address the single largest challenge the industry faces today. Digital transformation in the chemical industry (in German) Digital transformation in the chemical industry KPMG in Germany recently launched a ground-breaking study on digital transformation within the chemical industry, together with the market research institute, TNS Emnid where they interviewed 75 senior chemical industry executives. With the right technology and partners, enterprises are leveraging a breadth of technologies to better prepare their products, processes, and people for the future. 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. , Digital Transformation Globalization has also altered the chemicals industry. 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. The chemicals industry is more than a single industry. It also requires a corporate mindset that embraces agility, adaptability, and innovation. 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. In the past, large producers dominated the market. 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. 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. , Digital Industry Jenner: I think we need to discuss the term ‘digital transformation’ first. 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. , Business Process Innovation , #Industries What are some examples of B2B Industrial Distributors? 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. , Digital Disruption Digital technology, and the data it brings, holds tremendous promise for the chemicals industry. The impact of these industry changes is easy to see, as are the challenges they create: Chemical companies must identify new revenue streams, including innovative services and outcome-based models. 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. Read the Digitalist Magazine and get the latest insights about the digital economy that you can capitalize on today. 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. This both requires and supports new business models and processes. An example of this is the paint and coatings market. It became evident that the chemical industry … Thus, only 18 percent of assets benefit from preventive maintenance based on calendar time or usage. The best example of the smoothest digital transition is Yellow pages. 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. Many processes in highly regulated industries like the chemical industry are an ideal fit for digital transformation. For many companies, this need is reinforced as competitors, partners, suppliers, and customers begin employing digitized business processes of their own. 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. 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. More and more, smart sensors and equipment that contain smart diagnostic features are being used in industry to generate large volumes of data. There is also the threat of the innovative companies that have reimagined their markets, products, services, and technology. 5-January-2018 The resulting digital enterprises can design, manufacture, deliver, and support products faster, more efficiently, and at lower cost. Base chemicals, paints, beauty products, fragrances, and food flavorings all face pressure due to rapid changes in digital technology, consumer demand, and global competition. Modern technology, e.g. Reliability studies show that 82 percent of all assets have a random failure pattern. For such firms, the daily challenges of integrating operating systems into a single system have become a reality. , #MWC18, Innovation: It's More Than Just A Nice-To-Have, Three Supply Chain Trends Accelerate In Response To Current Crisis. data required to do so varies greatly depending on the regulatory group and can come in a variety of data formats, structured and unstructured. The Digitalist Magazine is your online destination for everything you need to know to lead your enterprise’s digital transformation. Base chemicals, paints, beauty products, fragrances, and food flavorings all have one thing in common. Chemical industry being asset-intensive is now facing game-changing challenges derived from the disruptive potential of digitalization. All rights reserved worldwide. During the process, they are gaining valuable customer data and insights. 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. So changes in production, oil prices and investment are the perfect time to dive in, anaylsts explained. Recent economic and technology trends have had major impacts on the global chemical industry. This growing interconnectedness of industrial operations is what is meant by the now familiar term, the Industrial Internet of Things (IIoT). 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. New technologies, such as 3D printing, have provided new opportunities for plastics, resins, ceramics, and powders. 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. This higher maintenance maturity level supports broader business benefits that go beyond reducing maintenance costs. In addition to growing pressures to reduce both project-related and operations-related costs and expenditures, chemical manufacturers face increased governmental regulation. New competitors, markets, and regulatory issues have changed industry dynamics. , Business Model Innovation Firms are focusing on mergers and acquisitions to remain competitive and drive growth. The chemicals industry is more than a single industry. 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. 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. 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. Electronics Distributors: Arrow sources electronic components like capacitors and atten… This talent will be key to leveraging technology to offer core business value. In this emerging business model, the focus is on interactive collaboration among carriers, shippers, forwarders, suppliers, and even customers. 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. For this to happen, companies must leverage large amounts of data to better understand their operations and their customers. The future of the chemicals industry is no longer the one-shot, blockbuster product model. Advanced computing technologies are allowing these devices to be connected to each other, and to use the data in a variety of ways. We’re seeing significant investments in state-of-the-art, world-scale chemical production facilities in all these countries. These segments are under pressure due to rapid changes in digital technology, consumer demand, and global competition. 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). Continuing success in the chemical industry will depend on the ability to quickly create and produce new products to meet consumer trends and changing customer requirements, and to ensure existing products continue to meet changing regulations. 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. Customer Experience. Infor’s strategy is to create industry-specific solutions with mechanisms for user customization via Amazon Web Services (public) cloud deployments. The digital journey: The starting point Digital transformation can turn industry challenges into real business value. The persistently low oil and gas prices, particularly in North America, have had a major impact on the industry, since both are key feedstocks for both specialty and bulk chemical production and provide much of the energy (either directly or indirectly) for these energy-intensive sectors. This applies to both the specialty chemicals and bulk chemicals sectors. 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. As products become more specialized, product development requires greater collaboration with customers, ingredient suppliers, packaging suppliers, and regulators. Rapid commoditization of the industry has accelerated as oil prices have remained low. 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 , Digital Chemicals It requires a mindset that is driven by a customer-first, design thinking perspective. 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.