The future of digitalization in the chemical industry

Achieving the potential of digital transformation in chemicals

Advances in networks and sensors, data availability and processing, and engineering and material technologies all hold considerable potential for expanding efficiency and productivity in the chemical industry. But digital transformation in chemicals also presents significant opportunities to increase innovation in products and solutions. For example, digital crowdsourcing platforms can be used for ideating on how to lower the carbon footprint throughout a product life cycle.

To achieve the potential of digital transformation, chemical companies need a common framework for assessing current state, defining the desired future state, and mapping out specific steps on the digital journey. The digital maturity stage of the company will guide strategic decisions and action steps in five dimensions critical for growth:

• User experience
• Talent enablement
• Asset reliability and performance
• Material system innovation
• Ecosystems

A framework will help teams assess how far along the company is on the digital maturity spectrum and what steps are required to reach the intended destination on the digital journey.

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The future of digital in chemicals: Three pillars

Chemical companies preparing for the future will succeed based on how they perform and respond today in three key areas:

1. Growth and innovation: Disruptions in automotive, construction, agriculture, and other end-use industries are creating opportunities and challenges for the chemicals industry. For example, while relatively novel technologies like additive manufacturing, currently being demonstrated but not fully commercialized in many applications from engineering parts to house building, might create a need for new materials, at the same time, they may reduce the consumption of traditional chemicals and materials. Most chemical enterprises are already reevaluating future growth strategies, including looking at digital value-added services to supplement existing product offerings.
   
2. Performance and cost optimization: The next stage of using digital to optimize performance should go well beyond the plant and readily integrate with physical assets. For example, new digital technologies like blockchain and predictive analytics can be readily integrated with existing Internet of Things (IoT) infrastructure to enable track-and-trace capabilities. New process technologies like crude-oil-to-chemicals have already been deployed in some refinery-scale plants.
3. Sustainability and the circular economy: To address regulatory restrictions on single-use plastics and microplastics, chemicals companies are working with their clients to introduce new products, invest in recycling technologies, as well as incorporate renewable and recyclable materials in their growing product portfolio. Chemical manufacturers will need to bring together stakeholders for product innovation and technology commercialization, with a redesign mindset.

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A common framework to address digital, ease investment decisions, and focus on high-impact initiatives

To get the full advantage of digital transformation, an enterprise-wide digital strategy is often needed, which percolates down to customizable parts suiting the needs of individual business units. This digital strategy should also tie into the digital maturity model—where the organization is right now and where it aspires to be once the digital transformation is done.

A common framework to address each of the stages in the digital journey should cross five key dimensions:

1. User experience—using customer analytics and demands to gain insights into customer trends.
2. Talent enablement—enhancing workforce capabilities by leveraging cognitive tools such as artificial intelligence (AI), wearables, augmented reality, and robotic process automation.
3. Asset reliability and performance—strengthening asset dependability using advanced digital technologies like IoT, remote monitoring, and AI.
4. Material system innovation—leveraging digital transformations to enhance research and development activities, such as process modeling software with a focus on optimizing materials and energy flow within a chemicals plant.
5. Ecosystems—active participation in the value chain through collaboration to share demand forecasts, better manage the supply chain, and commercialize new products.

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Conclusion: The path ahead

Digitalization in the chemical industry will require a clear picture of readiness, particularly the steps required to establish an accommodating culture that promotes flexibility and learning. As with any major initiative, digital transformation in chemicals is likely to be challenging.

With a framework to help present a clear vision for how digital and exponential technologies can impact business strategy, chemical companies can achieve aspirations for the five key dimensions—user experience, talent enablement, asset reliability and performance, material system innovation, and ecosystems—and be well prepared for the next frontier in chemicals.

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