Digitalization in the chemical industry is typically in response to market challenges, particularly when it comes to demand and competition. It’s generally geared towards improving the chemical companies’ competitiveness in business areas from operations and R&D to customer relations.
We have previously covered in another post how we think AI and machine learning are changing research in chemistry. It is even helping us in the way that we do scientific communication.
But what is digitalization, specifically, and what does it mean for enhancing the way the chemical industry works?
What is Digitalization?
Digitalization is almost synonymous with computerised automation – in fact, “automation” was probably your first thought when you started reading this article. But it’s more than that. Digitalization is also about collecting and processing large amounts of data, and then the outcomes or actions of what that data tells us.
An action can be automated as instructed by specific algorithms and executed by machines, like adjusting pressure or heat, for example. It could also be a strategic policy created by human decision-makers, like a plant manager who decides to request parts for replacement if data shows extreme wear and tear on their equipment.
It’s true that in most cases, digitalization involves data that triggers an automated response. This can be:
- Sensors and devices – the input interface components that measure, scan, or receive information directly from the source. For example, an electronic pressure gauge or a radio frequency identification (RFID) scanner that identifies objects, employee IDs, and equipment
- Edge computing – data processing on the “edge,” which involves speed or safety. The computing happens in the device itself or across various devices. A distributed system controls safety components like a compressor anti-surge loop or a safety integrity loop
- Connectivity – how devices, edge computing, and the Cloud are tied together into a homogenous system despite different specifications and standards. This is about compatibility and communication
- Analytics – the various applications that provide an analytical approach for understanding the results of diagnostics, logistics, inventory, and general trends
- The Cloud – a secure database where data can be stored, accessed, and used by either operators or programs
What Is the Status of Digitalization in the Chemical Industry?
Not all companies have full digitalization infrastructure in place – that’s typically because it’s such a huge investment of time, money, and resources. According to one study, just 4 out of 10 chemical companies expect that their business is more digital than their competitors.
Of all the companies in this survey that are digitalized:
- 40% are using digitalization to become more efficient
- 32% say they are applying digital technology to drive growth
- 11% are using digitalization to meet strategic goals
What Types of Challenges Does the Future Hold?
Despite the drive to modernise, the chemical industry is facing various challenges beyond competition. There are external challenges with complex implications such as those posed by the economy and new regulations.
1. Economic Challenges
There are interwoven and sometimes subtle factors that drive the chemical industry’s position within the economy. Despite recent infusion of capital investment to boost global capacity, the focus is largely on local markets.
Global growth in demand for chemical supplies has decreased, something that is indirectly connected to countries creating self-sufficient energy. Just two examples of this are the fading advantage of the Middle East in terms of oil production and the increasing self-sufficiency of China exerting significant pressure on the chemical industry.
Some level of uncertainty is also faced from end-users. Declining car production, for example, could result in lower demand for specialised automotive chemicals.
2. Regulatory Challenges
Another serious challenge to the chemical industry is to do with regulations. To illustrate this point, let’s think about the many countries that are (rightly) either banning or reducing the use of plastic bags. The process of manufacturing plastics involves chemicals, so this has a knock-on effect on the chemical industry as the overall demand for chemical products such as catalysts or reagents for polymerisation and polycondensation decrease. We’re not saying we should reintroduce plastic bags, by the way! Merely that it will affect the chemical industry.
How Digitalization Will Address these Challenges
Digitalization can help make significant improvements. Aside from raising the standards of competitiveness among chemical companies, digitalization can address the industry’s largest challenges in several ways:
- Cost-cutting – cut operational costs by automating complex manufacturing processes
- Efficiency – machines and workers will become more productive. We’ll save time, effort, energy, and resources
- Quality control – work processes will be more precise and accurate. Errors are minimised or eliminated while high-quality products are produced
- Safety – accidents and injuries can be prevented through continuous monitoring of the various stages of manufacturing. Parameters such as pressure, temperature, and chemical proportions are maintained at safe levels
- Security – monitor the movement of personnel within the facility. Any unauthorised person can easily be detected
- Research and development – data and analytics helps researchers develop new products
- Waste management – toxic materials or hazardous waste can be more easily handled, stored, and disposed of by digitally assessing the ratio of final product to waste
- Customer and end-user analytics – chemical companies will gain new insights to help them better respond to customer demand
Using digital technology to address the various challenges the chemical industry faces is no longer a nice-to-have. Change is inevitable and companies must, quite simply, learn to adapt – and reap the benefits of doing so.