Digitalisation in the chemical industry – Separating myths from opportunities

There is a lot of excitement about digitalisation across businesses all major industries – and the same applies to the chemical industry.  Many believe that digitalisation will have a significant impact across the chemical value chain, with the potential to not only lead to higher productivity and more innovation, but also change supply chains, and create new channels to market. Given all the excitement about digitalisation, it is essential to separate the substance from the hype and carefully evaluate what this will truly mean for the industry.

CIEX 2019

At the upcoming CIEX Europe 2019 conference on 9th – 10th October in Frankfurt, Germany, Dr. Wilhelm Otten, Head of Process Technology & Engineering at Evonik will critically review digitalisation in his presentation “The innovative power of digitalisation in the process industry – Distinguishing myths from value adding opportunities”.  Dr. Otten will discuss on how digitalisation is currently very much driven by “new technology”, but often is missing a solid business case. In his view, digitalisation, in a nutshell, is the “automation of business processes”. It has to contribute to transparency, efficiency, speed and flexibility of the main business processes such as supply chain and asset life cycle management.

Dr. Otten chose to discuss digitalisation because he believes that besides sustainability, it is a major driver and enabler in the chemical industry. Evonik is in fact driving industry-wide standardisation activities to harvest the benefits of digitalisation faster and more efficiently. He is hoping to motivate other participants to join these initiatives. Besides this, Dr Otteb is looking forward to receive some new insights into the digitalisation strategy of peers across the industry.

Talking about key trends in innovation, Dr. Otten adds that, “From my point of view there are three key factors that drive innovation in the industry:

First, there is of course digitalisation. This will affect the development process for new products, disruptively change the customer interface based on data driven business models and foster transparency, speed, efficiency and flexibility in the main business processes, supply chain and asset life cycle. Most of the chemical companies are still struggling with the complexity and do not have a comprehensive strategy to deal with those developments. Only a few companies have really taken actions to develop and implement these elements in operational business.

The second factor is “modularisation”, mainly influencing chemical supply chains and production processes. Today, smaller quantities of chemical products are often produced in ( inefficient) multi-purpose batch plants. High volume products are in most cases produced in continuously operating plants, individually designed to produce one single product. Industry 4.0, with more individualised products, will require a higher variety of products produced in highly flexible and efficient modular plants. Modularisation will speed up time to market and make continuous processes adaptive to product changes. Modularisation will completely change process development and engineering process as well as production technology.

The third factor is “sustainability”. Examples here include establishing a sustainable chemical production based on bio-based raw product, recovering CO2, or the generation of Hydrogen by renewable energy to produce raw products like Methanol. Also, in this field only a first set of initiatives and pilots have been launched.

Mr. Otten concluded the interview by summarising, “… from my point of view there are three key drivers for innovation in the chemical Industry, “digitalisation”,” modularisation” and “sustainability”. Industry leaders must develop a comprehensive (innovation) strategy to cope with these developments and gain competitive advantages for their companies. The innovation in these fields cannot be managed without collaboration with industry partners from other industries, for example IT. Therefore, chemical companies have to learn to work with “open innovation”.

Hear more about innovation, digitalisation and sustainability strategies oft the world’s leading chemical producers at CIEX Europe 2019. Register today to meet and listen to speakers from BASF, Dow Chemical, DSM, Henkel, Clariant, Mitsubishi Chemical, Ashland, Covestro, Braskem, Sabic and many more.  Register at ciex-eu.org.

Chemical Innovation Exchange