Digitalization for achieving operational excellence

Digitalization for achieving operational excellence

Digitalization may have several positives, but it serves as a catalyst for most companies to help create an agile and sustainable environment

  • By Deepak Rastogi , President – Strategy & Transformation, Deepak Fertilisers and Petrochemicals Corporation Ltd. | June 09, 2023

Digitalization may have become a buzzword over the last decade, but the COVID-19 pandemic has fast-tracked its adoption. Today, technology-intensive operations are not just revolutionizing new-age industries but are also giving a new lease of life to traditional domains like chemicals and fertilizers, particularly when it comes to operational excellence.  

According to the Ernst and Young CEO Outlook Survey 2022, digital transformation is the second most prominent capital issue for chemical players across the globe. Elaborating further, the survey also brings forth how chemical players are now ready to “expedite digitalization”, with over 40% of chemical players having been positively impacted by digitalization in the past three years. 

With increasing market competitiveness, leading Indian chemical and fertilizer companies are pushing for digital transformation, driving a mindset change from ‘good to have’ to a ‘must have’. After all, upgrading to state-of-the-art technologies doesn’t just enhance productivity, in units; it also ensures energy efficiency, reliability, and safety for operational excellence. 

Automation and workforce effectiveness 

With the disruption of technology in the chemical and fertilizer industry, the workforce can ensure greater efficiency across business functions, vendors, and customers to deliver superior performance. Over the last decade, automation has been a prominent theme, pushing companies in this space to make technological changes from time to time.  

For the process industry, it was all about implementing distributed control systems and incorporating programmable logic controllers for the peripheral islands of automation. The best-in-class equipment is largely being installed to increase human productivity and at the same time, enhance machine efficiency. With hardware design remaining almost a constant across continuous and manufacturing automation, software implementation got associated with industry domain knowledge. 

Digitalization may have several positives, but it serves as a catalyst for most companies to help create an agile and sustainable environment. Not only does it take care of operational efficiency across the value chain, it also brings to the fore various stakeholders. With this step, a company is much closer to building a well-networked and connected organisation. 

Digital transformation to drive change

At a time when digital transformation was still new, chemical and fertilizer industries focused their energies on developing a strong foundation. This meant building a robust transactional support system to an ERP platform across all business units, enabling seamless and integrated flow of business processes and transactions. 

Several companies also went ahead and implemented SAP S4/HANA, which is a ready-to-run cloud ERP that delivers the latest industry best practices and is big on innovation. With this move, it was much simpler to integrate all the core businesses in the organisation, eliminating silos in a large way.  

Incorporating industry best practices is the best way to bring about any change. It also helps to create a single source of truth for every business with seamless information flow. One of the most effective interventions adopted by several companies has been the creation of dashboards that serve as a window to access critical business metrics. This is a sure shot strategy to ensure efficiency and drive success.   

Most of us are already aware of how supply change is a critical piece of the puzzle to business success. It also became a constant subject of discussion during the pandemic. During this time, realisation dawned upon the industry that there is no bigger capability than planning to ensure critical organizational readiness to fulfil market needs.  

In the VUCA world that we live in, we have witnessed several global crises that have imparted one critical lesson – that volatility at both demand and supply sides warrants improved decision-making.  In manufacturing facilities that have complex supply chains and cater to different business units, product segments, and geographies, there is immense potential to leverage digital technologies to address the biggest of challenges. This step can also help create a more agile and resilient supply chain.  

The use of Integrated Business Planning (IBP) solutions can fast-track the digitalization of the end-to-end supply chain planning process, covering sales planning, production planning, procurement planning and logistics planning. By bringing different functions in supply chain planning onto a single integrated platform, chemical and fertilizer companies can attempt to have better collaboration with their stakeholders and other decision-makers. Such moves can also help with optimisation of working capital, capacity utilisation, and reducing costs. 

The next leg 

For most companies, the next obvious move is to plan and execute solutions that shall be integrated to enable seamless visibility, control and course correct capabilities. These steps can also have better and positive outcomes, including enhanced decision support and most importantly an improved customer orientation.   

By connecting the supply chain and financial plan, it becomes a little smoother to deliver targets and at the same time, ensure timely root cause analysis of the deviations, thereby helping companies take corrective actions.  

This conversation is incomplete without the mention of transaction systems that are critical to meet customer needs in time. It is also important to consider efficient logistics execution, keeping in mind volume growth, geographical expansion, space constraints, while considering customers’ demands as a priority. In this scenario, the measure of success is to maintain dispatch targets on a day-to-day basis, ensuring the delivery of products to customers at their destinations without any delay.  

For any chemical and fertilizer unit, manufacturing operations feature at the top of the list. That’s why their focus revolves around enabling improved safety, reliability, productivity, and control in the last two to three years. The good news is that there are several new-age technologies that can speed up these tasks through automation, creating a digital operational infrastructure (DOI). 

Older plants need to be transformed to keep up with their newer counterparts to maintain productivity, and thus profitability. Companies aiming for top-quartile performance are searching for answers to put together a digital transformation roadmap that will take them from their current stage of plant automation to DOI and autonomous systems. 

The future roadmap

Digitalization has a huge potential to not just increase efficiencies, but also offer capacity utilization and reduce costs. The journey has already begun and it’s only time until things fast track. The Industry 4.0 roadmap is exciting and brings in sustainability as a key objective.  

When it comes to enterprise class systems, progressively organisations are taking future ready steps. At the same time, there are organisation-specific needs that cannot be addressed through a standard enterprise system. There is a need for digital enablement of processes or automation through collaboration. With investment into Low Code – No Code platforms, information technology functions in chemical and fertilizer companies can become more agile, in turn speeding up the digitalization journey of the organisation.  

Today, the industry is increasingly embracing new-age technologies like Artificial Intelligence (AI) and Machine Learning (ML) to address non-linear challenges across a range of functions like manufacturing, sales, consumer insight, procurement planning, etc.    

Last but not the least, it is the end consumer who is the king. With the adoption of digital technologies in a big way, chemical and fertilizer companies are engaging better with their customers, understanding their needs and offering them relevant information on their product and solution offerings. 

While digitalization comes with a whole set of positives, companies must take into account safety and privacy issues to ensure increased security. As they say, a stitch in time saves nine!  

All in all, the journey to digital transformation has been an exciting one. This isn’t the end of the road – there’s a future that awaits us with more possibilities!

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