As the chemical industry continues to evolve, companies are trying to visualize how the digital economy will create opportunities and risks. To do this, chemical companies must rely on their digital plans to be able to make decisions quickly and adapt to changing customer expectations.
Industry 4.Now focuses on using digital technology to gather and analyze data across machines and business systems by enabling faster, more efficient processes. This brings together manufacturing, logistics, sales, and services to achieve value in a short period of time. Now is the time for chemical companies to start refining their Industry 4.0 strategies. A study by the World Economic Forum found that 87% percent of chemical executives say companies that do not embrace digital will lose their competitive edge and may face extinction.
SAP has been engaged in the Industry 4.0 discussion and its strategy since 2011, when it first became an academic discussion. During this time, SAP was an integral part of the definition of Industry 4.0 as the future high-tech strategy for 2020.
Earlier this year, SAP announced the company initiative Industry 4.Now to provide applications and advanced technologies that bring to life Industry 4.0 and the Intelligent Enterprise.
Two industry trends show how Industry 4.0 will play a part in the future of chemicals:
- Improving sustainability: Resource scarcity, government regulations, and changing consumer expectations call for innovative business models and platforms in support of more sustainable practices. With governments and other organizations starting to enforce sustainability measures, such as bans on single-use plastics, as well as emissions regulations, chemical companies will need to adapt to these new regulations and lead the way to a sustainable future.
- Delivering new customer experiences: With ongoing commoditization and margin erosion, chemical companies are required to focus on co-innovation and the selling of business value and outcomes instead of just products. The ultimate goal is to deliver entirely new customer and consumer experiences by putting data at the core of everything companies do.
ALBIS Plastic GmbH, for example, is a leading global operating companies of thermoplastics. The company wanted to introduce predictive quality analytics across its compounding operations. However, silos of locally stored information meant that conducting predictive quality analysis across all manufacturing locations would be a challenge.
By using SAP Cloud Platform and Internet of Things (IoT) technologies, ALBIS now uses advanced analytics to review historical production and process data. Based on this, the solution analyzes patterns associated with previous quality issues and uses these to identify key quality risk areas within the processes. These results are then communicated to quality management teams using reports and dashboards.
Since implementing this solution, ALBIS has seen improved visibility and analysis of production line performance. The company now had an architecture blueprint that can be used for Big Data analytics use cases and has minimal system maintenance required thanks to the cloud-based software as a service.
For chemical companies, the SAP strategy around Industry 4.Now can be broken into four different areas.
Intelligent products for the chemical industry are not necessarily focused on making the existing products more intelligent, but instead on offering new products or offering new value adding services business models. This is done by leveraging data and new intelligent technologies from across the entire product life cycle. Companies can then streamline the research and development process or rely on digital services to deliver outcome-based business models to their customers. This requires an environment that welcomes collaboration and open co-innovation.
Intelligent factories — or, from a chemical perspective, intelligent plants — focus on a company’s need to make efficient use of materials and energy while still producing at a high quality. They are also forced to react quickly to changing demands and unforeseen events. COVID-19 is an example of this; many chemical companies quickly adapted their factories to produce more products such as hand sanitizers or PPE gear.
Chemical companies are doing this by using intelligent data analytics for optimizing their production and horizontally integrating production with supply and demand chains.
Companies are looking for ways to avoid downtime of equipment and increase their asset performance. They are doing this by shifting from a reactive asset management plan to predictive and proactive data-driven plans.
The Industry 4.0 strategy takes the people component a step further by not just making the people working in plants more intelligent, but offering resources and training to empower employees to do their job more efficiently and safely. Companies are always looking for ways to reduce risk of manual errors while increasing people performance. Providing real-time data-driven decision support helps to ensure safety, increase performance, and further drive innovation.
Now more than ever, chemical companies need to be able to rely on their digital strategies to help companies evolve and adapt to changing customer expectations. For more information, visit Industry 4.0 area of sap.com.
Jenna O’Toole is a solution specialist at SAP.