June 2022 / Vol. 27 No. 6

by David Yankovitz, Principal – Consulting, Deloitte U.S.

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 and other industries. Digital transformation in chemicals also presents significant opportunities to increase innovation in products and solutions used in manufacturing electrical equipment. For example, manufacturers can use digital crowdsourcing platforms to create ideas on lowering the carbon footprint throughout a product’s life cycle.

To achieve the potential of digital transformation, chemical companies need a common framework for assessing the 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.

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 create opportunities and challenges for the chemicals industry. For example, while relatively novel technologies like additive manufacturing are currently being demonstrated but not fully commercialized in many applications in electroindustry manufacturing, from engineering parts to building construction, they 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 re-evaluating 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 in manufacturing.
3. Sustainability and the circular economy: To address regulatory restrictions on single-use plastics and microplastics, chemical companies are working with their clients to introduce new products, invest in recycling technologies, and incorporate renewable and recyclable materials into their growing products portfolio. Chemical manufacturers will need to bring together stakeholders, including electrical manufacturers, for product innovation and technology commercialization with a redesign mindset.

A Common Framework to Address Digital, Ease Investment Decisions, and Focus on High-Impact Initiatives

An enterprise-wide digital strategy is often needed to get the full advantage of digital transformation, 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 complete.

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 focusing 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.

The Path Ahead

Digitalization in the chemical industry will require a clear picture of readiness, particularly the necessary steps 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. ei

For more on this topic, download The future of digital in chemicals: Helping chemicals companies achieve the next frontier of excellence.