Much has already been said and written about digitization of the chemical industry, Even the previous blog articles on this website have discussed artificial intelligence, cloud computing, advanced digital algorithms and the power of quantum computing.
But what exactly is digitization? How does this work? And how will it be transformed?
What is the digitization of the chemical industry?
Computers are playing an increasingly big role in our lives. How we interact with family and friends, how we shop, how we work and even how we find love. But how do you digitize an industry?
According to Dr. Frank JennerA global chemical industry consultant EYA lot of this has already happened. all cchemical companies Digitization has started. Using computers to support or run processes, streamlining productivity and improving efficiency. Just as cars are built by robots on a production line or supermarket stock level and ordering systems are controlled by digital processes, most chemical production computerized. Production, supply chain and plant maintenance are all controlled or assisted by a micro-chip.
But now the final phase of digitization is happening as computers start taking control of the business model. Harnessing digital power not only for production and supply chain, but for overall company management; From business strategy to customer interaction, from product design to market development. Business sectors that were once led by human thinking will be governed by computers.
As Jenner explained in a recent interview with Strategic Management & Investments magazine Financier Worldwide“These days two-thirds of process re-engineering activities are digitizing. But there will be a digital transformation across the company, and that is something different – bringing in new or optimized business models for modified or entirely new revenue streams.
How does digitization work?
This is a view supported by chemical industry Advisor McKinseyJoe says there are three main ways digitization will affect chemical industry, The first, as previously reported, is in production, “…using digital-enabled approaches to improve companies’ business processes.”
The second is the use of digital capabilities to effect, “demand patterns in end markets.” What this means is the impact of technological development on other industries and how it will affect chemical industry and its products.
For example, the use of drones in precision farming will have a major impact on agrochemical industry, will spread as online chemical salesBoth wholesale and retail, or the way self-driving cars will reduce the number of traffic accidents, and therefore lower demand for car paint.
for more straight chemical industry The way computers are changing the plastics industry. As the McKinsey report states, “another digital-enabled area … is 3-D printing, also known as additive manufacturing. The market for polymers and chemicals Use in additive manufacturing is growing at 30 percent annually and is set to grow from $0.7 billion in 2015 to $2.5 billion in 2020. Furthermore, “it is possible that the market will evolve towards conformity” polymers and chemicals for various additive manufacturing systems, which can open up innovation and commercial opportunities photopolymer manufacturing companieshigh performance thermoplasticsand others chemicals used in these processes. ,
But importantly, the third way digitization will affect chemical industry is overall chemical business management, Something that McKinsey notes, the industry of the near future will be, “…where digital developments drive changes in business models through which chemical companies Capture and create value for customers.”
Far from a sudden setback, the implementation of digital in business models and strategic planning chemical firm There will be a natural progression, and one that has already begun.
As Jenner observed, “Over the past four years, chemical companies They started developing their digital strategies by looking at their value chains and functions and with lots of smart ideas including interesting pilot projects. It was a gradual route. However, the problems became apparent when they started integrating all these pilots into their current IT landscape and process infrastructure. ,
This is where the third level of digitization steps in. Or as Jenner puts it, “overcoming these traps requires new thinking in the next generation of business and IT infrastructure.”
In fact, Jenner believes that chemical industry The long overdue is major restructuring.
Why do we need digitization?
The old-fashioned classic top-down management is struggling to keep pace with the rapid changes in modern business. Additionally, the amount of data available for processing, and the increasing size of companies seeking economies of scale, mean that Management of chemical businesses More and more digital support will be needed.
As Jenner puts it, “Overall, business process architecture and digitally enabled backbone infrastructure are still lacking. This slows down the innovation process. We need to connect, interconnect, administer and manage all these transition projects.” Only then can we explore real-time vertical and horizontal integration across entire value chains – internally, across all operating divisions and subdivisions, and externally, across suppliers. Seriously, in the customer back-end.”
but chemical industry professional Don’t be discouraged by the size of the task ahead. With growing markets and increasing demands for safety, security and ecological considerations, digitization can provide a safer, more secure and environmentally sound environment. chemical industry,
This is a point made by Jenner, when he said that, “digitization creates opportunities to increase transparency throughout”. chemical supply chain, The audit trail of how blockchain and Internet of Things content is identified and used, such as certificates of origin and green credits of final products, will increase eco-friendly raw material in upstream processes. ,
How will digitization happen?
Ultimately, the shift from business model design away from the boardroom to a computer-influenced strategy will have to come from company leaders. Changes in the structure of how the company operates will be huge, and so the impetus must come from those at the top.
While the scale of this task may be daunting, the rewards are clear. Companies adopting digitization like Amazon (sales) and Facebook (social interaction) will find success. Those that fail to adapt, such as Kodak (non-digital photos), face extinction.