Stephen Reynolds, Industry Principal Chemicals, AVEVA.
News & Events

4 ways digitalization is transforming profitability in the chemicals industry

The worldwide chemicals industry is undergoing a period of rapid change. Global supply chain disruptions have plagued chemicals companies. Meanwhile, governments and industry organizations continue to adopt ever-stricter environmental regulations, which presents chemicals manufacturers with a moving target as they strive to stay ahead of new sustainability mandates.

What’s more, a retiring workforce invites the possibility of a shortage of skilled labor, forcing companies to find new ways to transfer institutional knowledge and train new workers. In short, the chemicals industry will need to surmount many hurdles in the coming decades, and the stakes have never been higher.

Fortunately, with the rapid and recent advances of industrial technologies – powered by artificial intelligence, big data and the cloud – forward-thinking digital solutions now offer a way to overcome these challenges and improve plant profitability and sustainability.

According to the McKinsey Technology Trends Outlook 2022, today’s disruptive trends will drive the chemicals industry to invest in advancements in sustainable, cost-effective, and higher-quality materials and production processes, with  a forecast global impact of up to $300 billion between 2030–40.

Digitizing your plant

By digitalizing work, chemicals companies can drastically improve collaboration and efficiency. By enabling work in a digital environment, workers can complete tasks from anywhere in the plant, at different sites, or remote locations, so operators can accomplish more than ever before. They can use time to drive continuous improvements as opposed to merely solving problems, which increases overall efficiency and helps companies build resilience.

Not only do digital tools enhance enterprise-wide collaboration, but they can seamlessly unify operations and supply chains, thereby opening new pathways for information-flow and breaking down silos. Information is shared via centralized visualization, so operators can collaborate on the same data at the same time to identify vulnerabilities in the business and work together find ways to innovate and improve profitability.

These new ways of working, based on common data platforms and global visibility, help companies become more profitable and increase sustainability.

To succeed in the future, chemicals operations must be able to shorten engineering cycles; optimize value chains and improve agility; ensure safe and efficient operations; and upskill, reskill, and empower workers.

Shortening engineering cycles

Modern digital engineering and simulation tools in scalable architectures let engineers collaborate on the same designs at the same time, promoting efficiency and eliminating rework. Cloud-enabled data makes information visible to all relevant stakeholders and gives engineers flexibility in where and how they access data. As a result, projects can be executed faster, and at lower cost and risk.

Demand shifts and market fluctuations

While market volatility, supply chain shocks, and the commoditization of products represent significant business hurdles, they are not insurmountable. With more accurate operational data and a model- driven execution process, chemicals manufacturers can improve product quality, reduce waste and emissions, increase energy efficiency, and be better positioned to drive  the emerging circular economy.

Driving efficient operations

With greater measures of digital agility, chemicals companies can build resilience against future market disruptions, while improving efficiency. Analysts can explore optimization models with real-time reliable data sets and quickly adjust chemical operations to meet new market conditions. By enabling better planning and scheduling capabilities, they can optimize production, be more agile, and find new areas to improve efficiency.

Upskilling, reskilling, and empowering workers

Workforce empowerment stands as one of the most powerful drivers of sustainable operations.  An empowered, energized workforce can make impressive efficiency gains while keeping operations safe. Today’s new generation of talent is looking to work for companies that offer the latest training, technologies, and operating environments.

But how can your company implement digitization in practice?

Many chemicals manufacturers wonder where to start their own digital transformation journey and which steps can be quickly taken to catch up with competitors that were early adopters of digital technologies.

Six distinct, cross-functional digital initiatives can define a successful roadmap for the transformation of work and help chemicals companies address their business imperatives.

  1. Build your industrial information infrastructure

Establish a solid foundation for all of your digital transformation initiatives by integrating and contextualizing all sources of engineering and operations data to centralize information and foster a data-driven decision culture.

  1. Enable full visibility and awareness

Go beyond situational awareness by creating a multi- experience single-pane-of-glass and mobile-enabled visualization system that can break down functional work silos and speed informed decision-making by providing universal visibility, tailored to a user’s specific role.

  1. Optimize your production and value chain

Make the highest quality product at the lowest cost using AI-powered tools to enhance your operations execution, process optimization, production management, feedstock management, and supply- chain planning and scheduling capabilities.

  1. Increase asset health and performance

Improve reliability and identify areas for proactive maintenance. Tap into the power of AI for risk-based guidance to improve your asset strategy, asset analytics, and maintenance execution.

  1. Accelerate process design, innovation, and learning

Bring agility to the entire process and plant lifecycle of design, engineering, simulation, training, and operations, enabling the digital twin for faster innovation.

  1. Streamline engineering and capital project execution

Break down silos between process, mechanical, and other engineering disciplines to enable seamless cloud-based collaboration across teams and unify your approach to all aspects of the engineering lifecycle.

According to PwC’s 23rd annual CEO Report, 58% of chemicals CEOs see sustainability and the circular economy as the priority for investing. However, to ensure that investment is successful, chemical manufacturers must lay the digital groundwork that transforms the way their teams and operations work.

Through the digital initiatives outlined above, chemicals companies can streamline engineering cycles, optimize value chains, achieve operational excellence, and empower their workforces to drive the circular economy and ensure profitable and sustainable operations.