How Digital Transformation Improves Efficiency in the Chemical Industry

Digital Transformation

Many global industries are embracing digitization in areas ranging from business process to customer relationship management. Digital transformation is becoming a smart business objective beyond just improving the core of the business. The evolving regulatory environment, changing customer needs, increased competition, and dynamic cost equations have been the catalysts for digital transformation. The chemical industry is no different and can benefit from digital transformation with the help of data conversion services.

Chemical companies are now in search of advanced digital solutions to manage their large-volume data. It enables data capture from devices, and a variety of business intelligence tools are available to convert this data into useful insights. Digital transformation helps to expand the efficiency and productivity of the chemical industry and it also provides an opportunity to increase innovation in products and solutions.

To get the full advantage of digital transformation, a proper digital strategy is essential that can filter down to customizable parts of the business units. Every stage of the digital journey should pass a common framework that has five key dimensions:

  • Talent Enablement: Improved workforce capabilities using cognitive tools like artificial intelligence (AI), wearables, augmented reality, and robotic process automation.
  • User Experience: Customer analytics and demands are used to gain insights into customer trends.
  • Asset Reliability and Performance: Advanced digital technologies like IoT, remote monitoring, and AI can be used to strengthen asset dependability.
  • Ecosystems: Active participation in the value chain through collaboration to share demand forecasts, better manage the supply chain, and commercialize new products.
  • Material System Innovation: Leveraging digital transformation to enhance research and development activities, such as process modelling software with a focus on optimizing materials and energy flow within a chemical plant.

Digital transformation requires a clear picture of the business to initiate the transformation and develop a culture that is accommodating and encourages flexibility. Digital transformation in the chemical industry is challenging but with a proper framework and clear vision, the process of transformation becomes more effective and easier.

Business Value Improves with Supply Chain Digitization at Henkel

Henkel is a chemical and consumer goods company that is using data analytics to get valuable insights. It is a Germany-based company and has three divisions: adhesive technologies, laundry and home care, and beauty care. Henkel started supply chain digitization many years ago. They started this initiative to minimize cost and be more efficient. They first used the Internet of Things (IoT) sensor to keep track of different aspects of the supply chain ranging from manufacture and product supply to truck logistics and customer demand. This helps to do business in a digital manner which is automated, data-driven, and agile in this fast-paced world.

Richard Self, moderator of a session on supply chain digitization at the Industrial AI Summit, said that Henkel’s digitization brought the kind of ROI that companies seek when they introduce sensors, analytics dashboards, and IoT applications into their environments.

The Unknown Path of Digitization

Henkel began the process of supply chain digitization in 2013 and this began as an ISO-standard energy efficiency and sustainability initiative that connected its 33 factories globally to a single cloud instance. In 2019, Henkel had more than 30 applications such as energy meters and flying drones connected to one digital ecosystem. According to Tarun Rana, Corporate Senior Manager for digital transformation at Henkel, localized connectivity of these various applications and processes created data silos that can be better integrated down the line. During a session at the Industrial AI Summit, Henkel showed a video that demonstrated how a digital twin helps the company understand the demand for laundry soap. Algorithms are used to calculate the supply that should be generated to meet the demand.

Compatibility between Departments

In 2020, as the pandemic broke out, there was huge imbalance in the demand for goods. The demand grew 30 times more than the normal demand and all the departments were working towards resolving the problem of imbalance. The data from planning systems, CRM [customer relationship management], and production systems was extracted and combined so that each function has a single source of truth. Each of these functions is trained to act quickly for unprecedented changes. According to Tarun Rana, supply chain digitization has helped the business to make use of the opportunity to grow.

The advancements in technology and increasing demands of the customers are the factors driving chemical companies to increase the pace and quality of innovation and keep up in the market. Embracing advanced digital technology improves the profitability of chemical companies by enhancing agility, productivity, and innovation. It also enables the chemical industry to create new values and simultaneously enhance the value from connected devices all around them. Digitizing the chemical industry with the help of dedicated providers of data conversion service would enable this sector to enjoy better visibility across the eco system, have a proper digital vision for the future, and benefit from overall improvement.

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