Ian Elsby, Siemens Digital Industries Head of Chemicals, explores new Siemens’ research into the challenges and opportunities facing the chemicals sector with the advent of Industry 4.0
Earlier this year Siemens Digital Industries, the Siemens business leading on the adoption of Industry 4.0 technologies in the UK, commissioned a piece of in-depth research specifically focused on chemical manufacturing. We interviewed over 30 experts from across the chemical industry and asked them about the digitalisation opportunities and challenges within the sector.
Informed by the research, Siemens developed a series of five ‘building blocks’ which capture the different investment streams and actions are required to enable the chemical sector to successfully move towards Industry 4.0.
The first of these is the digitalisation of the physical environment, so that equipment, plant and logistics can be controlled and automated through a digital interface. And while many such feeds already exist in the chemical industry, interviewees agreed a robust audit is needed to identify any gaps.
The second is based around the importance of standardising all data protocols. This is so that digital data feeds can be easily combined, analysed and deployed via common standards.
The third building block is focused on investing in applications and processes enabled by the new, standardised data pool as outlined above.
What was interesting here was a commonly held view among many interviewees that to secure the investment step-up to 4.0, applications which could generate ‘reliable ROI’ were the ones which got the most buy-in internally.
Interventions which could help mitigate the financial impact of universal manufacturing issues - such as predictive maintenance which can help reduce downtime, predictive quality that can help with batch consistency, and plant monitoring which can reduce ‘fixed’ costs such as energy, throughput and logistics – were the benefits which got the most traction at board level.
We also found that chemical manufacturers were very excited about the competitive edge offered by mass customisation, virtual product development and plant design via a ‘digital twin’ approach, plus the potential offered by AI, AR and VR technologies.
The fourth stage is about companies looking outside of their own business and considering their supply chain. This is where information generated by the digitalisation process is shared with the supply chain to drive even more efficiencies.
This benefit was not viewed as being primarily financial, but more as an enabler for improved competitive positioning through enhanced customer service and creating a more agile, responsive structure to meet client demands.
Another advantage of having the entire supply chain plugged in to the data flow is that of improvements to ‘track and trace’ capabilities. Knowing exactly what ingredients you are handling, and where they come from, allows you to confidently communicate the provenance of your product to customers.
The customer piece also informs the fifth building block. This stage looks at how a disappointing digital experience will undermine customer relationships, not build them.
Chemical businesses therefore need to ensure they get the first four stages in place before integrating them with the customer’s processes. Further, such integration would drive more
digital accountability – internal and with the customer - which can be used to set clearer KPIs and drive competitiveness.
Such performance-based contracts were also seen as a natural development of a more service-oriented culture in an industry where customer satisfaction is becoming as important to commercial success as new product discovery.
However, one of the main barriers to this exciting and dynamic Industry 4.0 vision for the chemical industry are understandable concerns around cybersecurity, and the fact that IIoT comes with risks as well as rewards
Siemens is acutely aware of this, and through the development of our own cloud-based operating system called Mindsphere (which has military grade encryption), and our global Charter of Trust initiative which we have developed with our own suppliers and our global industry partners, we are leading the world on this issue.
We also cover cybersecurity from a chemicals’ perspective, and our five building blocks towards digitalisation, in much more detail in our research report. For a free copy visit www.tinyurl.com/siemenschemicals
