Digital technology in the chemical industry has made data processing (Generation, Collection, and Storage of data) so much easier and cheap as well as digital technology can extract vital information by managing the mass number of unstructured data. This vital information then can be used by the companies to get better results in the future.
Effect of Digital Technology on Chemical Industry
The potential impact of digital technology on the chemical industry is quite huge and has shown its effect on the profit of the companies of the chemical industry. The following are the areas of the chemical industry where the digital will show change:
The digital technology applied in the field of manufacturing sections of a chemical industry company can increase the potential by showing improvement in return of sales up to a range of three to five percent.
This profit can be gained by just analyzing the data which every company continuously generates but tends to discard most of the data. This data analysis can lead to the reveal of ways to achieve higher yields, by some small decisions like lower the energy consumption or frequent and effective maintenance of the machinery.
Advanced analytics can improve the entire sales and operation planning process of a company by just making possible and more accurate forecasting based on the data. This analysis can also make a better schedule of batch production as well as shorter lead times with a high level of flexibility in stocks.
Sales and Marketing
The digital can increase the return of sales (ROS) by two to four percent. This can be achieved by digital data-enabled decisions.
A leading global nutrition company analyzed internal and external data to create transparency at the ground level to read the customer – product level through an easy to use app. Then, used the analyzed data to grow the market of the company by 8 percent after suffering several years of no growth in the company’s market.
Digitization can create an improved customer experience with higher profit possibilities and lowering costs to serve.
Research and development
R&D Sector can create higher-margin products at an outstanding pace by introducing digital technology in the sector. The research and development sector can also use digital technology to simulate the experiments by predicting results on the basis of failed or successful experiments performed in the past.
New Business Models
The companies taking early steps in the digital world to be a leader in their industry are taking the risk now for a better future. The impact of digital technology targets specific segments of the industry opening the evolutionary way for the future with better economical profit results. Some business models are as follows:
- Performance Pay Model: Using digital technology, to monitor chemical application in the industrial process in the manufacturing area.
- Intellectual Property-based Business Model: Providing consultation and guidance to use the company’s product in exchange for a fee.
- Data and Analytics led Service Model: This business model is basically, dependent on the decisions taken on the data received. Such as, in the case of an agriculture chemical company, it might set prices of chemicals (insecticides, pesticides, etc) depending on geological, meteorological, rainfall, and geospatial data.
Steps to Implement Digital Technology
- Set Target – Take the view of senior management on the company’s future after introducing digital in the business.
- Quantify Impact of Digital – Usage of digital tools in the company with an aim to increase yield or profit of the company and applying it in the right section of the company.
- Capabilities – Skills requirement to generate structured data in a useful manner as well as to read the data generated by digital technology. This can lead to the training of existing employees in the company or the hiring of new talent for the betterment of the company.
- Governance and Organization of the team – Adapting of the organization or governance allowing the new digital approach to flourish.
- Road map and Vision to work – This introduction of digital technology into the sector is a big step, realizing the risk for the company but it can be minimized with a proper vision, management, and governance.
- Let The Digital act – Only the application of digital into the sector will not help the company to grow, the management has to take decisions as required according to the situation as well as communicate with the workforce and external stakeholders such as customers and suppliers.
Digital in the Chemical industry creates a substantial opportunity, but with the condition of planning strategy towards better results and success. Strategy planning can let you make decisions that are hard to reverse ahead of time to gain economic profit.