Technological changes change industries.
Just ask Kodak; a company which famously ignored the digitalisation of photography.
The latest technology is already changing the chemical industry. Computer modelling and big data, even modern theory on industrial processes are having an impact. So, what are the new advances, how is technology being used by chemical companies, and will BASF and DowDuPont adapt in time?
To keep you up-to-date, here is a brief summary of the technological changes and chemical industry trends that are being adopted now. Will your chemical company be ready for them?
1. Cloud Storage and Information Sharing
While the use of computers has revolutionised the business world, the chemical industry has been a little slow to take full advantage of cloud data storage (a network of remote servers hosted on the Internet, which are used to store, manage, and process data in place of local servers or personal computers).
The fear of security breaches may have caused this delay. The chemical sector is highly secretive, so the idea of storing undisclosed company information, formulas, and pricing data in an unknown location may cause sleepless nights for many chemical company executives.
But today, the technology industry has become ever more hi-tech, and is better prepared for hackers and industrial espionage leaks. Plus, there are simple ways to lower the risk from cyber-attacks, as Michael Risse of data analytics firm Seeq, explains, “It [cloud data storage] is not an ‘all or nothing’ situation. For instance, the analytics software can reside on the cloud and use data kept at the plant.”
Significantly, cloud data storage enables massive cost savings and increased efficiencies and customer satisfaction. As the industry journal Chemical Processing reported in January 2018, “Companies including Dow Chemical, BP and BASF are rapidly expanding their adoption of cloud-based applications — and reaping substantial benefits.”
Specifically, they report how, “Dow Chemical, Midland, Mich., says it has saved over $85 million as a result of the improved supply-chain visibility offered by cloud-based services.” Adding that, “The importance of this was highlighted for the first time when Storm Bill approached Texas in June 2015. The company quickly was able to identify 5,900 railcars in the storm’s impact zone. This allowed Dow to warn customers of any potential delivery problems well in advance and, for critical deliveries, to arrange for shipping from other locations. Similarly, when a cargo ship caught fire in 2016, it took Dow’s supply chain team less than ten minutes to determine what containers were on the vessel. Again, the company alerted customers and organized alternative supplies.”
2. Advanced Maintenance Analytics
Alongside big data storage and shared information via cloud services, is the use of big data analytics to increase chemical company effectiveness.
By applying advanced analytics chemical manufacturers have begun to use their data to get the most out of their most expensive assets. Predictive-maintenance systems can avoid problems that would remain unseen when using traditional techniques.
It is a key adjustment to modern chemical manufacturing and is something being closely followed by the chemical industry analysts at McKinsey & Company. They note that, “By applying advanced analytics, companies can determine the circumstances that tend to cause a machine to break. They can then monitor all relevant parameters, so they can intervene before breakage happens, or be ready to replace a component when it does, and thus minimize downtime. Predictive maintenance typically reduces machine downtime by 30% to 50% and increases machine life by 20% to 40%.”
In their report entitled ‘Using Advanced Analytics to Boost Productivity and Profitability in Chemical Manufacturing’, the McKinsey research team found real word evidence of how chemical companies are already starting to see substantial gains in using advanced analytics. They report how, “One major surfactants producer consistently ran into problems with recirculation and discharge pumps at its largest plant. When one of the pumps broke, the plant had to stop production for ten hours while a replacement was installed; these pumps are expensive, besides the cost impact of the production loss. Engineers had tested several hypotheses to determine the possible causes of failure; they also tried out alternative materials in the pumps and seals, as well as different process conditions, but none of them solved the problem.”
However, “An advanced-analytics approach changed all this. It combined a detailed analysis of data from hundreds of sensors with the plant engineers’ expert knowledge, and re-examined the process variables and other data sources; it then enabled the company to develop a methodology to predict when a failure was imminent.”
The Circular Economy
While many may not see the circular economy as a new concept, its ideals have yet to be fully implemented in any part of the chemical sector.
Given the advantages of the circular economy’s more holistic approach to manufacturing, and the savings and benefits that follow, chemical companies that do not do enough to embrace this new thinking will lose competitive advantage.
The circular economy, as the Ellen MacArthur Foundation explains, “...looks beyond the current take-make-dispose extractive industrial model, a circular economy aims to redefine growth, focusing on positive society-wide benefits. It entails gradually decoupling economic activity from the consumption of finite resources, and designing waste out of the system. Underpinned by a transition to renewable energy sources, the circular model builds economic, natural, and social capital.”
The model is based on three principles that all seem very relevant to the chemical industry. They are:
- Design out waste and pollution
- Keep products and materials in use
- Regenerate natural systems
And yet surprisingly, up until January 2018 only one industrial chemical company, Solvay, had signed up to become a Global Partner.
As Dame Ellen MacArthur stated, “We are delighted to welcome Solvay as a Global Partner of the Ellen MacArthur Foundation. The chemicals industry lies at the heart of the global economy, so holds great potential to spark system-level change in the move towards a restorative and regenerative circular economy.”
While some see the circular economy as a trending buzzword, others see it as an unwanted handicap that requires businesses to pay more for doing anything, purely to protect the environment. But smarter chemical manufacturers will see it as increasing efficiency. A way of rethinking processes and chemical waste management to gain new revenue streams, reduce manufacturing costs, and lower raw material inputs.
For example, the plastics industry is under considerable pressure to limit plastic waste, as ocean pollution becomes the poster child of our consumerist society. In the coming years, new legislation and customer taste will restrict plastic production further. Those plastic manufacturers who regulate their waste, make their products more recyclable, and make efforts to include more recycled plastic in their plastic feedstock and generally embarce the circular economy will reap rewards.
You can read the second part of this two-part article on the relationship between technology and the chemical industry here.
If you are interested in reading about other chemical industry related topics click here.
Photo credit; ICCM4, Ziliao, Quantum, & NOAA