Digital transformation approach for chemical companies
Opinion

Digital transformation approach for chemical companies

Given the enormity and complexity of the task at hand, few key questions need to be answered?

  • By Chetan Badhe , I G Petrochemicals Limited , Senior Manager - Digital Transformation | January 14, 2023

Advancements in Industry 4.0 technologies are enabling enterprises across sectors to take notice and embrace them to solve business challenges and drive productivity to stay competitive. Specialty and Commodity Chemicals are at the cusp of technology led growth but how to make the best use of the technologies is still a gray area and needs hand holding.

Given the enormity and complexity of the task at hand, few key questions need to be answered - Deciding if a company is indeed ready for a digital transformation, defining a focused roadmap to achieve objectives, and how a digital transformation plan needs to be executed.

Chemical manufacturing sector in India is on a steady growth path due to multiple factors, both global and local. India is continuously seen as a key contender for China+1 supply chain strategy of global chemical manufacturers and are keen to invest in the country. Domestic manufacturers of Specialty Chemicals and Petrochemicals are buoyed up with increasing export orders as local demand is also picking up. Large players are expected to add significant capacities with a view on either import substitution or high demand from export markets amid significant volume growth.

India is a significant supplier of specialty product families like hydrofluoroolefins, phenolics (phenol, acetone, and iso-propyl alcohol) and application specific products (adhesives, surfactants, dyes & pigments, and catalysts). These products provide good profit margins and witness lesser volatility in raw material input prices than Commodity Chemicals. In order to climb up the value chain, significant investments need to be made in R&D and digital manufacturing technologies.

While the sector aspires for cost optimization, several organizations score low on digital maturity, as higher technology and hardware costs led to minimal investments in automation, instrumentation, and visualization of manufacturing processes. Now that the cost of technology ownership has considerably gone down, organizations should refocus efforts on digital transformation of their manufacturing assets.

The approach can be broadly divided into three parts - Deciding to digitally transform; Defining a digital transformation roadmap; and Execution. As a starting phase, organizations should think on two different aspects: Technology and People and how they can collaborate and move up the transformation maturity curve.

Technology

 Digital maturity assessment

o To take stock of where we stand

o Capture basic requirements for digital transformation

o Performed by an independent entity to get an unbiased view on technology selection and current maturity

• Identify quick wins/low hanging fruits

o Helps to kickstart initiatives with minimum investment

o Morale boosting for larger and complex transformation projects

o Quicker Return on Investment (RoI) provides confidence to executive leadership

o To gain traction on digital journey

People

o Assess digital maturity report of key people

o People are always key part of any change management

o Assess their readiness for technology implementations

o Conduct brainstorming sessions to capture brilliant ideas. Always remember “Ideas are cheap but execution is Priceless”

o Identify digital champions based on their willingness and assessment

o Identify digital champion from each department

o Digital champion should be given the onus to innovate on existing process and come up with enhancement proposals

Recommended team composition for digital transformation

o Chief Digital Officer (CDO) will lead the digital transformation initiative and orchestrate ‘3-Ps’ - Process, People and Products on a unified platform. CDO should be capable of driving the overall vision and where the organization currently stands on digital maturity. He should be well versed with Industry 4.0 technologies and how those could be leveraged in the best possible way

o Program manager to drive the program execution and an expert in development methodologies like Agile

o Instrumentation expert with working knowledge of communication protocols, and current technology architecture of the plant

o Process expert who possesses in-depth understanding of underlying processes and has access to key data like P&ID, PFD equipment datasheets, GA drawings etc.

o IT expert with a knowhow of existing IT infrastructure and aware of its enhancement capabilities.

The most important step is to assess in what form digital transformation would be most effective in the organization. The subsequent design and implementation strategies need to be built on top of this blueprint ensuring that the undertaken digital transformation aligns well with the organization’s long term vision and objectives. Once the final details are identified and ambiguities are ironed, organizations can move to the next step of defining a roadmap for the digital transformation envisaged.

Authors: 

Chetan Badhe, Senior Manager - Digital Transformation, I G Petrochemicals Limited (IGPL) and Vishal Kelkar, Product Strategist & Manager, Global Software Products Company

Disclaimer: The views expressed are strictly personal.

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