Business

Advantages of digital transformation for chemical manufacturer

Sustainability is not only reflected in complying with environmental regulations and reducing emissions. It requires to improve the efficiency of the whole manufacturing value chain, from the supply chain to the manufacturing process, from good maintenance to the final product and its processing. Emerging digital technologies, such as Al, blockchain, industrial Internet of things, data analysis, cloud, etc., can create a paradigm shift in manufacturing efficiency, thus greatly realizing sustainable operation.

In today’s highly regulated and competitive environment, chemical manufacturer must go beyond traditional industrial practices and business norms and focus on achieving the expected results through digital transformation to maintain sustainable development. For many companies, this demand is reinforced as competitors, partners, suppliers, and customers begin to use their digital business processes. By using the integration of operation technology and information technology, these companies connect their enterprises internally and externally. This requires and supports new business models, processes, and technologies.

Smart connected products and assets, as well as network communications, software and advanced analysis, allow enterprises to redefine their business processes, including enterprise asset management (EAM), product lifecycle management (PLM) and supply chain management (SCM). The resulting digital enterprise can design, manufacture, deliver and support products faster and more efficiently at lower cost.

Through digital transformation, chemical industry participants are realizing the following advantages:

PLM and chemical formulation processes are moving towards closed-loop products and chemical formulations to support continuous product improvement

EAM process is expanding to include predictive and normative maintenance to reduce unplanned downtime, cost and risk

Supply chain management process can now support the concept of Omni channel supply chain and improve highly integrated chemical supply chain and customer experience

Sustainable process of protecting environment and promoting economic growth

Challenges for chemical manufacturers

Recent economic and technological trends have had a significant impact on the global chemical industry. This applies to the special chemicals and bulk chemicals industries. In recent years, M & A activities in the industry have also increased, and this trend is likely to continue.

The continued downturn in oil and gas prices, especially in North America, has had a significant impact on the industry as they are key raw materials for specialty and bulk chemical production and provide a large amount of energy (directly or indirectly) for these energy intensive industries.

However, until recently, few new or expansion projects of specialty chemicals have been seen in North America, and there are few projects of bulk chemicals. The competitive advantage provided by shale oil and gas has triggered a wave of new projects and capacity expansion projects.

In general, there is a trend for global manufacturers of bulk chemicals and specialty chemicals to shift their production focus from Europe, Japan and North America; China and India, with cost advantages, and Saudi Arabia, with raw materials advantages, have been vigorously promoting export value growth and economic diversification. We see significant investment in state-of-the-art, world-scale chemical production facilities in all of these countries.

The increasing global competition makes the whole industry need to improve efficiency and reduce costs. With the increasing scale and complexity of large-scale chemical production, manufacturers of specialty chemicals, especially in Europe, are exploring modularization to increase production assets. This includes the development of new modular “micro” production plants that can easily be located near raw materials or end customers to reduce logistics costs.

In addition to the increasing pressure to reduce project related and operation related costs and expenditures, chemical manufacturers are also facing more and more government regulation. This includes the need to improve safety and reduce potentially harmful emissions. With the increasing concern for sustainable development, the public also wants enterprises to ensure that new chemicals and chemicals already in the enterprise portfolio are more environmentally friendly. In response to this need, global initiatives such as the joint action for sustainable development (TFs) have been launched to audit, assess and implement sustainable development practices in the chemical industry (environment, health and safety, labour and human rights, and governance issues).

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