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Digital transformation path of chemical companies

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In recent years, due to the inherent periodicity and commercialization of the global chemical industry, enterprises are facing more and more business challenges and pressures. They have to find new sources of profit and provide innovative solutions for demanding customers. In the past, most chemical companies have improved their operations by improving asset utilization, increasing production, improving operational efficiency and implementing optimal pricing. Nowadays, chemical companies focus not only on improving core business, but also regard digital transformation as one of the core business development goals.

More than half of the companies lack digital strategy

According to the 2017 global digital chemicals survey, more than 50 percent of chemical companies still lack digital strategy and transformation roadmap. Two thirds of the chemical companies with annual revenue of between $5 billion and $25billion and operating special chemicals (special chemicals, coatings, plastics and composite materials) are in the early stage of digital transformation. In the petrochemical industry, the concept of integrated automation system and digital factory has begun to penetrate into the industry. In recent 10 years, the comprehensive automation system has been adopted in large petrochemical and coal chemical engineering projects without exception.

The analysis report on the market development and investment value of the 13th five year plan of China fine chemical industry in 2018-2022 shows that a large polyurethane manufacturer uses accurate data analysis tools in the main production process to help enterprises find the method of adjusting operation. Without any capital investment, the output of isocyanate in the plant increased by 10%, the consumption of high pressure steam in the plant decreased by 25%, revenue increased by 6%, energy consumption decreased by 26%, and raw materials were saved. Advanced analysis technology will improve the accuracy of prediction, make the whole sales and operation planning process more reasonable, the timing of mass production more reasonable, shorten delivery time, reduce safety inventory, make enterprises more flexible.

Digitization also stimulates the value creation potential of sales and marketing. Digital investment in marketing and sales can increase the industry’s average return on sales (ROS) by 2 to 4 percentage points. According to the 2018 chemical industry market research analysis report, BASF, using advanced analytical technology, resets the price of 100000 product customer portfolios in seven core countries based on personal risk and willingness to pay. Through the integration analysis, capacity-building and change management, the company achieved a price increase of 5-7%.

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Although most chemical companies continue to generate large amounts of data, most companies do not use digital technology. If managers collect and analyze data, they can tap the potential to increase production and turnover, reduce energy consumption and reduce maintenance costs.

Incorrect thinking and insufficient understanding

In recent years, the competition in chemical industry is becoming increasingly fierce. Due to the continuous changes of customer demand, regulatory environment and dynamic cost, it brings pressure to chemical companies. Digital transformation has become an inevitable trend. However, there are still some problems in the process of transformation, such as insufficient understanding of the digital needs of enterprises themselves, the unsatisfactory effect of digital construction, the lack of funds and talents.

In the process of digital transformation, chemical companies can make great progress in hardware construction in a short time by making large-scale investment in early stage. Therefore, in the subsequent digital construction, people are used to using the existing hardware infrastructure construction experience, which leads to some misunderstandings that limit the digital construction. For example, some people think that the digital construction of chemical companies is only an information sector problem, which leads to low participation of enterprises. Some people think it’s easy to build, and then use it to change the information system.

Because of the different process routes and production methods of the industry, the demand for digitization is also very different. At the same time, the standards of the industry are different, which leads to the poor information transmission among industries, and reduces the efficiency of digital construction of enterprises. The digital construction of chemical companies can not be separated from the construction of data base, management foundation and technical foundation. However, because of the relatively low technical level and management standards, some enterprises’ basic data are distorted or incomplete, which is not conducive to the digital construction of enterprises.

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