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Digitalization is front and center for all forward-looking manufacturing companies. Chemical and resin firms are no exception.<\/p>\nDigitalization is front and center for all forward-looking manufacturing companies. Chemical and resin firms are no exception.<\/p>\n
Finland\u2019s Nokia Corp. (www.nokia.com<\/a>) decided recently to dive deeper into this topic by surveying senior officials in the plastics and chemical industry. The result was an 18-page white paper titled \u201cDigital pulse of the chemical industry 2023\u201d that helps to shed light on some key trends.\u00a0The partners gathered the information for this report by interviewing C-suite executives, process engineers, supply chain managers and digital transformation engineers across Europe and the United States. Those interviewed spanned a wide variety of firms \u2013\u2013 in terms of size, geography and degree of progression along the digital transformation journey, from those piloting processes to those already well along the implementation path.<\/p>\n Nokia describes itself as \u201ca B2B technology innovation leader in networking, bringing together the world’s people, machines and devices to realize the potential of digital in every industry.\u201d The 155-year-old company, which posted an income of just under 25 billion euros last year, acknowledged that there is a big difference between the global chemical companies and the smaller specialty chemical or plastics companies when it comes to where they are in their digitalization process.<\/em><\/p>\n Even so, it concluded, \u201call companies are looking forward to new technologies in the future like machine learning and AI [artificial intelligence]. The more automation that could be done with the processes and calculations, the less chance there would be for human error \u2013\u2013 which results in more efficiency, less waste and increased safety.\u201d<\/p>\n In the majority of cases, the study found, companies put digitalization in place to boost efficiency, conduct automated simulations, reduce human error and connect data. Sustainability and increased safety were side benefits of going digital but typically were not the main objectives.<\/p>\n But realizing such gains comes with its own set of issues. Nokia found a lack of resources to implement digitalization to be a common challenge. One needs employees who understand how to make use of the data collected, and finding such talent is not easy.<\/p>\n Bigger companies can set up entire departments or dedicated steering committees focused on the project, but smaller chemical or plastics companies often do not have this option and digitalization meant someone had to do it in addition to their full-time job.<\/p>\n Most specialty and small to mid-sized chemical companies indicated they have already started their digital transformation process. However, they still have a long way to go and when asked, they said they believe that the chemical industry overall was only at level 2 or 3 on a scale of 1 to 5 (with 1 being just starting and 5 being fully integrated).<\/p>\n Chemical companies that started their digitalization project in the past year or two are focused on getting everything online and easily accessible for everyone. Augmented reality, simulations and using data intelligence are not yet on their project radar. They also faced challenges in changing the company\u2019s internal culture to get the different teams on board to accept the new digital systems.<\/p>\n A common theme across the specialty and small to mid-sized chemical companies was that they wished they had started the process years ago \u2013\u2013 in most cases, five years ago. At the time, they said they just didn\u2019t have the resources \u2013\u2013 whether it was capital budget or people. Now they are working to catch up.<\/p>\n Not surprisingly, the largest firms are further ahead in this process. When it comes to big global chemical companies such as Dow<\/a>, BASF<\/a>, SABIC<\/a> and others, digitalization and automated processes have been part of how they operate for generations. These multinational companies tend to rank digitalization at a 4 on a scale of 1-5. \u201cThere are processes, particularly in the chemical industry, that simply cannot be run manually. They had to be automated and that\u2019s digitalization,\u201d said a respondent when asked why these big chemical companies are so far ahead.<\/p>\n Still, many of these larger companies are looking to improve their external processes. One respondent noted: \u201cAs an employee at the company, I probably have access to 20 different tools. But it\u2019s all internal. Where more digitalization is needed is with our growth pipeline and insights with the customer interface.\u201d<\/p>\n In the white paper, Nokia lists a series of priority and next-level objectives for both big and small companies.<\/p>\n For some, the next step is to add more intelligence into their manufacturing systems to help them create advanced algorithms in AI and machine learning to make processes even more efficient. Already, some of the small to mid-sized chemical companies have been experimenting with pilot projects and trials in this area and have seen good results in such areas as improved color sequencing and productivity. Large chemical companies have been using digital twins for years and are looking for faster and more advanced computing power in this area.<\/p>\n But, Nokia states, AI is not for everyone in the sector \u2013\u2013 yet. It depends on the amount of data the chemical company has, how they want to use that data and how far along they are in their digital transformation.<\/p>\n Better monitoring of processes and the ability to see the real-time flow of materials is helping to improve overall safety. Digitalization has enabled early warning systems and with more automation of processes, it can reduce human error and interaction.<\/p>\n Integration of systems and processes is only the first phase, notes Nokia. Looking ahead, chemical companies say they believe that virtual reality will be great for training and demonstrating safety assessments. Augmented reality will be even better because it will enable maintenance and other operators to have access to engineering information.<\/p>\n While none of the companies interviewed were already using virtual reality, they know it\u2019s coming. They are digitalizing their engineering information, twinning their processes with the technology currently available and creating metadata systems for projects. They believe the potential for digitalization is limitless and are ready to embrace it.<\/p>\n Companies also are keen to ensure that knowledge remains within the company. With the new generation of workers more likely to change jobs more frequently, digitalizing the knowledge helps with training and ensures that nothing is lost if someone leaves the company.<\/p>\n Respondents listed a number of issues that are weighing on their minds. Here are a few:<\/p>\n Most companies interviewed said they had created a digitalization steering committee with\u00a0representatives from all departments \u2013\u2013 but the leaders of the process varied in each company. In some specialty chemical or smaller chemical companies, it was the CEO, CFO or CIO along with the controlling department and the production department. In other cases, it was the analytics or quality assurance department leading the process. Accountability mostly lay with the production department or with the team that would be using the new digitalization processes.<\/p>\n Large global companies often had a vice president of operations or a similar role responsible for ensuring the fleet was operating efficiently. They did this in partnership with the IT and\u00a0engineering departments. However, the people actually operating the plant often played a critical role because even if a VP or CEO said that performance had to improve, it would be the people running the process who knew how to make that happen. Other global companies treat digitalization in a manner similar to that of the specialty companies \u2013\u2013 employing a steering committee that sets the agenda.<\/p>\n \u201cBefore implementing SAP, we had a hundred different systems that were glued together over the last 25 years,\u201d said one respondent. \u201cEach plant had different processes, and everything was not connected. We went from over 100 systems to five systems, and the project took two or three years before it was finally implemented.\u201d<\/p>\n The specialty or small to mid-sized chemical companies for the most part said they are not worried about key performance indicators (KPIs) at this time. Some said they first wanted to get the right processes in place before focusing on KPIs.<\/p>\n Larger chemical companies, however, do tend to find KPIs important, in part because they saw digitalization as offering measurable benefits that usually were anywhere from two to 10 times the original investment. Energy efficiency tended to be one indicator that was common to measure along with product quality.<\/p>\n While many of the smaller companies surveyed said they are still in the pilot phase of digitalization, they still were seeing tangible results, including:<\/p>\n The industry sees a lot of opportunities in digitalization going forward. Currently, they are focused on improving the safety in the plant, improving efficiency, enhancing security and reducing the cost of production. Private wi-fi, the benefits of high-speed 5G connectivity and the Industrial Edge are still new concepts to the specialty and small to mid-size chemical companies. But, notes Nokia, they see a potential opportunity in the future to share data knowledge within the sector.<\/p>\n While the larger companies are already using 5G and some of the newer digital technologies, they say there is always more to do. One example they gave is advancing how employees connect with the data.<\/p>\n The industry is hoping for a digital future where decision-making can be more solid, as well as more effective and data-based as opposed to relying on human interference.<\/p>\n \u201cThe biggest problem humans have is that we interfere in the process,\u201d said one respondent. \u201cWe are not mentally equipped to do this. When you talk about business or supply chain and value chain, you are talking about 100 variables. We think we can manage those variables, but it is not possible to keep all of them under control.\u201d<\/p>\n Overall, the report concludes, \u201cthe future of digitalization and where it is going is positive for this sector \u2013\u2013 even if a constant change to keep up with technology is inevitable.\u201d<\/p>\n Resource:\u00a0 \u201cDigital pulse of the chemical industry 2023\u201d white paper, Nokia<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"The promise of digitalization<\/h3>\n
Tracking the progress<\/h3>\n
Looking ahead<\/h3>\n
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Large chemical companies have incorporated digital data collection systems and sensors using radio frequency identification (RFID) and other technologies to assist with managing their supply chains. The sensors are used to track containers, rail cars and inventory. Digitalization can also be used to track dangerous chemicals. The importance of this was highlighted recently by the train derailment and toxic chemical spill in eastern Ohio.<\/p>\nVirtual reality is coming<\/h3>\n
Challenges and concerns<\/h3>\n
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Leading the change<\/h3>\n
Key performance indicators<\/h3>\n
Positive early results<\/h3>\n
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Future opportunities<\/h3>\n