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“The global chemical industry is facing changes on multiple fronts, and they are coming at a very fast pace. From disruption caused by players entering the market with competitive solutions, to consolidation and portfolio changes revamping the overall footprint of the industry,” says Duane Dickson, Vice Chairman, Global and US Chemicals & Specialty Materials Sector Leader, Deloitte United States (Deloitte Consulting LLP). How can the global chemical industry react, while managing an agenda that innovates and advances technologies?
Companies in the chemical industry are at the cusp of the next frontier of productivity and efficiency. Advanced Manufacturing, in the form of Additive Manufacturing, Advanced Materials, Connected Supply Chains, and Smart Machines is ushering in this new age of production – one marked by connected, intelligent machines. These “smart” assets are further augmented by Advanced Analytics and enabled by the Internet of Things (IoT), turning the information they gather and generate into an object of value in and of itself. Indeed, this increase in connectivity, automation, and analytics has led to a shift toward an information-based economy, one built upon the value of data over physical objects. The IoT has made it possible to build more efficient, smarter supply chains, and production processes, and perhaps link together the entire manufacturing value chain from end-to-end.
"The IoT has made it possible to build more efficient, smarter supply chains, and production processes, and perhaps linking together the entire manufacturing value chain from end-to-end."
As these changes continue to impact the global chemical industry, companies have some hard choices to make about how and where to invest in new technologies. To do so, companies should be able to identify where their specific needs are, and, by extension, which specific technologies will likely benefit them most. Doing so effectively, however, requires an understanding not only of their current strategic position, but how and where they wish to evolve in the future. They must thus also consider the types of information that will help them gain a competitive advantage – both now and in the future. In other words, in considering the information they need, global chemicals companies should likely consider where they want to play, and how that data will help them win.
This is easier said than done. Despite the hype around the IoT, many connected technologies are not always well understood. It can be difficult to understand what smart, connected, and fully automated systems might mean, both for the company and for the broader global chemicals ecosystem as a whole. At the same time, it is impossible to over-estimate the need for standardized data and the role that the flow of information plays in Advanced Manufacturing. To embrace and move forward with connected technologies, global chemicals companies should understand both physical and information technologies and how they interrelate. Indeed, physical and information technologies, also known as operations technologies (OT) and information technologies (IT), together form the concept of IT/OT integration.
In order to realize the opportunities both of OT and IT present, it is vital to combine them: aggregate and use the data created by many different sources to drive the physical act of production, ultimately leading to a stronger manufacturing organization.
This integration of Advanced Manufacturing and smart, connected IT via the IoT leads to a state known as Industry 4.0. Industry 4.0 is marked by a shift toward a physical-to-digital-to-physical connection. By bringing together smart, connected technologies, ever-more powerful computing, and Advanced Manufacturing, Industry 4.0 can enable great shifts in global chemical companies’ business models, as they seek to streamline business operations or pursue business growth. Within the global chemical industry, Advanced Manufacturing activities drive information creation, communication, and action. Data is created when a product or part is designed and communicated to machinery, which then acts by building the object. In this way, the alignment between the concepts of Industry 4.0 and IoT becomes clear.
The IoT has gotten more attention recently as the importance of connectivity both in creating products and services and better tailoring offerings to customers and clients has become clearer. As the IoT advances and connectivity becomes less a nice-to-have and more of a must-have, connected technologies are evolving and gaining sophistication rapidly. Connected tools now include high-quality sensors, more reliable and powerful networks, high-performance computing, robotics, artificial intelligence, cognitive technologies, and augmented reality. Taken together, these technologies typify the physical-to-digital-to-physical connection, and can change the global chemical industry in truly profound ways.
There is little doubt that penetration of Industry 4.0 concepts in global chemical companies’ manufacturing processes and supply chains will grow. Information flow, Advanced Technologies, and materials, in other words, the IT and OT that comprise Industry 4.0 make it possible to develop and manufacture wholly new things in new ways, leading to a sea change in global chemical supply chains, production, and potentially even business models as new product and service opportunities come to light via information flows. Through adoption and implementation of Industry 4.0 technologies, global chemical companies can truly understand which types of information will be most relevant to them as they seek to transform either their business operations, or growth--or both.