Big data is a captivating word to describe the exponential growth of new format of data including images, sensor, seismic, mapping and social exchanges that have the ability to provide with keen insights. Big Data is the prospect for IT to transition from driving business efficiency and reducing costs to driving business dexterity and mounting revenue. Organisations across sectors that quickly embrace ‘Big Data’ to renovate their business will distance themselves from the competition.
The exponential growth in big data is worth mentioning: As per the EMC IDC Digital Universe Study, the digital universe in India is nearly doubling in size every two years and will multiply 9-fold between 2013 and 2020 – from 326 Exabyte to 2.8 zeta bytes. The digital information in India is discharging at a much faster pace than IT budgets or skilled manpower driving adoption of cloud computing. While two-thirds of the digital universe bits are shaped or captured by consumers and workers, yet enterprises have obligation or responsibility for 85 percent of the digital universe.
Moreover, big data is a game-changer and cannot be overlooked by industries including chemical industry. The chemical industry operates in one of the most multifaceted and high-risk supply chains in the world. It is characterized by volatile industrial markets, integrally hazardous and closely regulated products, feedstocks that often initiated in unstable conflict regions and inter-dependent logistics networks of rail, road, ocean and pipelines that must safely transport vast quantities of raw materials, and finished product to producers and markets. These factors all meet to increase risk and add to the unpredictability of chemical production, transport and marketing. In such a scenario, we must discover why and how a big data roadmap is a must for organisations planning to remain competitive.
Chemical Industry: Current Scenario
The chemicals industry is already facing noteworthy logistics and supply chain challenges as a result of the oil and gas boom, not to mention the continued pressure on companies and governments to decrease carbon emissions. Thus, applying a mixture of digital technologies can help companies counter to these market shifts by altering the technique they operate, becoming a digital enterprise while also improving the safety of their operations, driving efficiency and reducing costs.
Big Data Analytics (BDA) which is part of the popular tendency SMAC (Social, Mobility, Analytics and Cloud) is defining the industry landscape today. It is no surprise that a study conducted by Accenture with more than 150 C -level and top management executives across global chemical firms found that 94 percent plan to upsurge their digital spend, while 87 percent said that those who do not spend money on digital will lose their competitive edge.
Chemical companies across globe say they expect to attain the highest Return on Investment (ROI) for every penny they spend on big data analytics and cloud computing within the next three years, according to research. This could ultimately drive growth and improve restrictions.
As the industry is realizing that these solutions not only help them rationalize their operations but also are very critical in improving their bottom line, the trend is changing. Today, chemical companies need combined content value chains because managing information efficiently enables safe, low-cost operations, rationalized compliance, and value-added products and services that boost the bottom line. Chemical companies use analytics to classify valuable opportunities. In such a scenario, big data is often talked about for its promise – to address a multitude of business problems and create a host of business opportunities.
Digital Technology: A Game Changer in the Chemical Industry
- Internet of things (IoT) enables the chemical industry to generate new standards and concurrently augment value from connected devices all around them
- Artificial intelligence along with machine learning allows chemical manufacturers to engage autonomous equipment with the help of data, flagging the way for smarter processes and faster transactions.
- The use of enlarged reality can have a profound impact on chemical companies. Chemical companies are increasingly using this technology to drive innovation by applying in it fields such as computational chemistry studies, X-Ray diffraction data, 3D structure optimization, conformational analysis, and transition state search
Implementing digital technology improves the cost-effectiveness of chemical companies by improving agility, productivity, and innovation. For instance, by using complex analytics tools for collaborative research and development, companies can speedily accelerate innovation to gain competitive advantage. Companies are turning to predictive models to perform what-if simulations based on data to achieve strategic agility and operational brilliance. Also, big data analytics plays a huge role in managing the on-going volatility in energy and raw materials prices and catering to changing customer demand. Digital transformation enables the companies to simulate the effect of price change on consumer demand and final margin, which allows them to develop real-time pricing quotes for their prospects. Additionally, they can share the data with suppliers to collaborate and combat price and supply volatility.
Digitalization will drive a tremendous wave of innovation. Recent advancements in digital technology offer unprecedented levels of connectivity, granularity, and speed in accessing, processing, and analysing huge amounts of data. Besides mobility, cloud and in-memory computing, the Industrial Internet of Things, machine learning and blockchain will start acting as game-changers in the chemical industry. All three trends are coming together to challenge existing strategies and create a perfect storm for the chemical industry. Customer and feedstock proximity, intellectual property, and technological know-how may no longer secure a sustainable competitive advantage. Early adopters of innovative business models have the unique opportunity to act as digital disruptors.
As chemicals is quite an asset-intensive industry and with today’s advanced capabilities in capturing, storing, processing, and analysing data, a vast amount of plant, asset, and operational data can be used in conjunction with advanced algorithms to simulate, predict, and prescribe maintenance to increase assets’ availability, optimize uptime, improve operational performance, and extend their life.
Also, there is a lot of untapped potential for new IIoT and machine learning technologies in supply chain. Think about using advanced analytics to increase forecast accuracy leading to improvements along the entire sales and operations planning process and related KPIs. Advanced analytics and machine learning could also be used for mitigating risks of supply chain disruptions. For example, in case of natural disasters shipments could be automatically re-routed to meet on-time delivery goals and customer commitments at minimum costs.
From a supply chain perspective, some segments in chemicals (e.g., pesticides) are threatened by counterfeiting. Blockchains single ledger verifies the integrity of a product as the record can be traced back to the product manufacturer and even the manufacturer of its precursor agents. Also, in terms of ensuring the physical integrity of a product, Blockchain can help. BASF last year ran a pilot on “smart pallets,” (pallets embedded with active, battery-powered, wireless transponders). Those can record and transmit into the cloud all pallet positions and movements, as well as physical conditions to seamlessly track possible “incidents” the pallet and its products have been exposed to on their journey to their final destination.
Big Data Challenges Facing the Chemical Industry
BDA provides an obvious path to streamline and safeguard chemical supply chain management. When we say ‘big data’, we talking about being able to deal with it effectively, to process it efficiently in real-time, to understand it and to use it for impactful decision support. Other industries have already developed best-practice models, but we can see some key ways it would benefit chemicals:
- By shrinking product life cycles, mass customization and expanding regulatory frameworks in product innovation and R & D
- Analysing the valuable data spawned by manufacturing and asset management to predictively model performance
- Taking care of complex shipment and logistics transactions in supply chain management, tracking and tracing goods – and being able to respond to any potential issues in real-time
- Understanding the pipeline, customer and product profitability at any level of granularity in sales and marketing. With the right tools, you can carry out simulations to focus on or commit to the most profitable deals and respond to customer needs on the fly
Properly managing big data does not only allow faster and more efficient decision making, it even enables business transformation or innovative business models via processes which have not been possible before. That is what drives the need.
Blockchain could have an impact on almost any line of business in a chemical company. Just think about collaborating in an open or closed community in R&D (permissioned private or public blockchain), tracking and tracing engineering changes and maintenance activities on a manufacturing asset, ensuring full integrity of a multi-modal product shipment to a customer, or trading derivatives of a physical product and set the foundation for clear ownership, once the critical mass for building a physical plant has been reached.
Big data and advanced analytics are hugely disruptive forces to our industry, but companies willing to embrace the challenge will create significant competitive advantage and growth opportunities. The challenge that is now in the face is actually harder to quantify, and yet perhaps most important of all is the way that big data empowers people by removing the need for endless chains of approval. With real-time cloud-based relevant data in their hands, people can make decisions on the plant floor or at the customer site without having to wait to talk to their boss at the end of the shift or when they get back to the office.
Ultimately, it is about total cost of ownership. The end game is that we have a convergence between online analytical processing and online transactional processing, obviating the need for middleware and reducing layers so we need less hardware, software and IT operational support. Sustainable innovation via smarter, faster and simpler business processes.
To leverage and scale the aforementioned technologies across all of their business functions, chemical companies need to turn into “intelligent enterprises”. Intelligent enterprises operate with visibility, focus, and agility to achieve game-changing outcomes. They do more with less and empower employees through process automation. They deliver a best-in-class customer experience by proactively responding to customer expectations. They invent new business models and revenue streams.
For companies to become intelligent enterprises, they must invest in three key platform areas:
- An intelligent suite bringing intelligence into the applications used to manage customers, supply chains, networks, employees, and core business processes
- A digital platform to manage data from any source (first or third party) in any format (structured or unstructured), and support the development, integration, and extension of business applications
- Intelligent technologies to apply intelligence to data and processes through innovations such as machine learning, blockchain, advanced analytics, and IIoT.