Growth through innovation in a transforming world
The new Deloitte study in collaboration with VCI shows how the chemicals industry is undergoing a huge transformation, where digitalization and circular economy play a key role. The study also identified 30 trends which will be of importance to the chemical industry until 2030 with a focus on the key market in Germany.
The paradigm shift in the chemicals industry is due to the change in demand structures and customer preferences. There will be incremental innovation in the customer industries of the chemicals business and the success models that already exist will continue to offer growth opportunities. A majority of these changes have a disruptive character and are closely related to digitalization, sustainability and the circular economy, which tend to influence—process technologies, product portfolios and business models.
Digitalization allows chemical companies to collect extensive data which can be evaluated and utilized to improve operational processes and build new business models. This digital transformation of the chemicals sector can be split into three categories:
- Transparency and digital processes. These involve the utilization of the comprehensive process data available within the organization to increase efficiency of the largely unchanged manufacturing processes and business models. Automation of manufacturing process is one area where such data is being used.
- Data based operating models. These models utilize operational big data, external data and advanced methods of analysis for better decision making and increasing efficiency. The chemicals industry is being driven by predictive maintenance, networked logistics and the application of concepts from virtual reality.
- Digital business models. These models replace the existing processes and business models and the products and services are digitally augmented to increase customer utility. Additive manufacturing in the field of agriculture is one example of such a business model.
With the change in customer preferences toward sustainable production and consumption, the need for a circular economy emerges, focusing more on application utility than on volume. The chemicals industry has an opportunity to take into account all aspects of the circular economy across the product lifecycle. The study gives away the seven circular economy levers that a chemicals business should consider. Digitalization can further drive the development of circular business models as aggregation and analysis of data continues to help businesses improve processes. The study details few approaches the chemicals industry can embrace—(Re)Design, Resource efficient production, Return and Recycling.
The chemical businesses already have a high degree of network but are yet to explore digital economic networks. In order to develop new growth opportunities, it is essential for companies to identify the role they play in such structures—Followers, Partners or Orchestrators. The study also has strategic recommendations for companies and associations along with recommended political and regulatory conditions to build these new opportunities that digitalization and circular economy can bring in to the chemical ecosystem.