By ICN GroupOpinion, April 15, 2020
Building Agility, Resilience and Recovery amidst the current economic uncertainties
Organisations need to develop capabilities to automate operations as much as possible and enable remote experts to address production plans, needs and interruptions
The chemicals sector has been hit hard by the current global economic interruptions, with rapid drops in demand, difficulty staffing essential production sites and fragility of supply lines.
Multiple respected economic forecasters believe demand will not fully recover for at least one to three years. Industry watchers predict permanent changes in the roles of on-the-ground versus remote working. Organizations are seriously considering how more work can be done remotely and with fewer crews in dangerous settings, in and around assets. Autonomous production is no longer thought of as in the distant future.
Some analysts feel the energy transition will be accelerated; others forecast the opposite. Chemical businesses are likely to rethink supply chains which are today highly globally interdependent and just-in-time in nature. In India, the focus which has been on providing broader access to electricity and clean water to everyone, will continue with some new urgency and focus when things normalize, and this will drive regional refining and chemical markets. It will also impact the speed at which refineries integrate their operations to incorporate chemicals and shift away from transportation fuels.
Digital as a Tactical Tool
How will companies most effectively contend with future business uncertainties? In a recent discussion, a Middle Eastern customer referred to digitalization as “a tactical lever in this environment.” Many organizations have realized during the current disruption that they need to develop capabilities to automate operations as much as possible and enable remote experts to address production plans, needs, and interruptions, and are not as far along in digitally enabling their assets as they should be. So, amidst the business uncertainty, several companies have small teams looking at how to digitally enable themselves more rapidly.
There are short-term moves companies have made and can make in terms of digitalization to navigate the current period and prepare for future economic recovery. These include:
- First, rebalancing capital spending (CAPEX) and operational expenses (OPEX) spending to match the current business climate. Economic analysis and risk tools can look at scenarios and optionality, and help rapidly assess CAPEX and OPEX ranking essential expenditures that will succeed under different economic futures.
- Production planning and scheduling tools are being creatively used to react to and solve challenges related to supply chain, demand and pricing disruption, by remote teams. Teams are building future scenarios to plan for variable market and regional recoveries.
- There are essential products that are in high demand, and require accelerated production, and adjustments to production assets. Effective responses require engineering, supply chain, production, and risk input which require collaboration and advanced tools.
- Visualisation and workflow digital tools are providing remote workers the ability to react to and collaboratively manage asset production. An Italian company is continuing urgent engineering work remotely with a front-end engineering collaboration tool that works as effectively from home as in the office.
- Some chemical companies have production continuity contingency plans, though probably not in anticipation of such a widespread disruption. Roles are divided into those that need to be performed onsite and others that can be performed remotely. Today, there is a
re-examination of how digital technologies enable virtual working.
- With assets operated with the fewest possible on site staff, routine inspection and maintenance has been deferred. Digital twin tools, such as troubleshooting online column models and predictive analytics tools that are evaluating how long equipment runs safely with deferred maintenance, are forecasting equipment failures and process upsets, efficiently deploying small strike teams to avoid damage and downtime.
- With assets running at lower rates, modelling tools are crucial to ensure that these operating scenarios can proceed without damaging the asset.
Where does that leave sustainability and the circular economy
Prior to the pandemic, the chemical industry was embracing a razor-sharp focus on sustainability and concepts of circular economy.
Jim Fitterling, CEO, Dow Chemical Company said, “We cannot lose momentum on the important work we have all been doing to address big global challenges – such as moving to a more circular, more carbon-neutral global economy. This will take collaboration and urgency, like the fight against COVID-19.”
This is both a challenge and an opportunity for the chemical industry in India, as the country faces challenges related to sources and supply of clean water and frequent air pollution events in major population centers. At the same time, as the standard of living rises in India, demand for consumer goods, which drive demand for plastics, will inexorably rise. Chemical manufacturers need digital technology to navigate the difficult problem of balancing production, margins, sustainability, minimum energy and water use.
As an example of recent accomplishments, Bharat Petroleum (BPCL) deployed an integrated digital twin to optimize sulfur recovery – encompassing software, such as AspenTech’s adaptive process control and connected simulation models to improve contaminant removal, as well as a key performance indicator (KPI) dashboard. In six months, the implementation resulted in 90% reduction in sulfur emissions and economic (and circular economy) value from recovered sulfur. In another project, BPCL implemented a digital emissions monitoring and prediction system, that allows the company in its Kochi Refinery to effectively address an increasingly rigorous and dynamic regulatory environment.
A Progressive Recovery
Agility and flexibility will be a key in the chemical industry, as unpredictable patterns of demand will be in front of us.
From our position as a partner to the chemical industry, we have been working with companies globally to support workers who have the critical need to access AspenTech software for remote access to perform their daily mission-critical work. Customer and training websites, customer service telephone and chat systems are all fully available to rapidly respond to support companies and their teams who are currently operating in work from home mode.
Author: Ron Beck, Marketing Strategy Director, Aspen Technology
DISCLAIMER: The views expressed are solely of the author and Indian Chemical News does not necessarily subscribe to it.