This is the first blog in a four-part series on digital transformation in the chemical industry. Stay tuned next week for part two – the five main benefits of digital transformation in chemicals.
At Schneider Electric Software’s Innovation Summit in October, representatives from industry-leading chemical manufacturer BASF delivered a keynote presentation addressing their digital transformation goals. It really gave me an opportunity to see just how large an impact digital transformation is making in modern industrial applications and how it’s helping companies large and small cut costs, improve productivity and decrease operational risks to the enterprise. In today’s chemical industry margins are increasingly thin and competition grows fiercer by the day. Chemical companies need to control costs while acquiring and maintaining customers in an industry where regulations are constantly changing. This means these companies need to discover and exploit any competitive advantage they can while reducing risk to the enterprise.
Like other companies, chemical manufactures drive revenue growth through new customer acquisition. One of the ways leading chemical companies are attracting customers is through a unique and differentiated customer experience. They are turning to digital transformation and asset performance management to augment and overhaul their traditional industrial and business operations and deliver new customer experiences.
See how chemical manufacturers have reduced operator training time by up to 12 months with digital transformation – download our infographic to learn more!
The IT/OT Convergence in Chemicals
The gap between traditional information technology and operations technology disciplines is shrinking. With the adoption of Industrial Internet of Things (IIoT) technology digital transformation is taking place. Digital transformation starts with enabling connectivity of real time data and information throughout the enterprise. Previously disparate data points are suddenly connected and capable of enabling new insight. This leads to better understanding of everything from feedstock supply chain management to production to customer order fulfilment.
Digital transformation in the chemical industry enables rapid collaboration and improved partnership efficiencies between feedstock suppliers and chemical producers. Information on feedstock availability is readily available throughout the enterprise and enables improved production scheduling and precise customer expectation management. Closed loop communication is established between chemical producers and customers that enables rapid innovation cycles. Digital transformation enables companies to quickly transition from being merely a supplier to the customer’s industry partner.
As traditional business processes undergo digital transformation, the enterprise moves more quickly and efficiently to deliver a unique customer experience. Behind the scenes, technology innovations are being implemented that empower the workforce and increase collaboration between teams. Mobile technology connects operators on the production floor with reliability and maintenance engineers in real time. This increased visibility increases equipment uptime, improves on time delivery of customer orders, and produces higher quality products. Ultimately, all of those factors combine to deliver an unparalleled customer experience.
At the same time, digital transformation enables an asset performance management strategy that allows the enterprise to capture as much return on asset investments as possible. Technology like predictive maintenance with advanced pattern recognition and machine learning ensure assets are not over maintained while catching potential failures before they occur.
Learn how Ascend Performance Materials achieved a savings of $500,000 in utilities and materials costs and more than $1 million in maintenance cost while avoiding potential plant shutdowns (savings of $2 million)
Catch Problems Before They Occur
Reliability studies have shown that only about 18% of assets benefit from preventive maintenance. That means that roughly 82% of asset failures are completely random. Proactive maintenance solutions enabled through condition based, predictive and prescriptive maintenance are far more effective methods of decreasing equipment downtime while driving a better customer experience through on time delivery of higher quality products. Condition-based, predictive or any advanced technologies need a solid underpinning of an EAM that enables world class business processes through the information technology side as well as the operations technology side. But it’s not just about delivering new technology.
Successful digital transformation strategies are about delivering a better customer experience, not just implementing new technology. Selecting the right mix and rollout plan based on your company’s maturity is critical to achieve digital transformation success. Adopting “design thinking,” and addressing the “human factor” when building tomorrow’s industrial technology solutions is critical. Consider the interactions employees, customers and partners will have with that technology and plan accordingly. Digital transformation is about transforming silos of data into actionable insights that create differentiated customer experiences and uncover new opportunities.
Yes – digital transformation is about driving efficiency, enabling better decisions, and ultimately improving the bottom line. However, without the driving force of manufacturers delivering great user and customer experiences, digital transformation is just another industry buzzword. Unless manufacturers deliver great customer experiences, digital transformation initiatives are almost certainly doomed before they ever begin.