Chems must adopt game-changing data analysis

Author: Al Greenwood

2016/06/06

Cloud computingFocus article by Al Greenwood and Joseph Chang

COLORADO SPRINGS, Colorado (ICIS)--The advent of continuous data collection and analysis has the potential to change the face of the chemical industry, and will create the need for platforms allowing companies to analyse a material throughout its value chain, consultants at PricewaterhouseCoopers (PwC) said on Monday.

In the future envisioned by PwC, the chemical industry will be able to collect and analyse data on polymers and other chemicals throughout their lifecycles – from their creation, to their sale to other manufacturers, to their incorporation into final end-products, to their sale to end consumers and to their uses by those consumers, said Vijay Sarathy, principal at Strategy&, the global strategy consulting arm of PwC.

“The data has always existed. But now there’s the ability to capture data from every part of your value chain and analyse it,” he said.

Sarathy made his comments during an interview with ICIS on the sidelines of the American Chemistry Council's (ACC) Annual Meeting.

Chemical companies already collect and analyse plenty of data, but this is often done at individual parts of a product's cycle, Sarathy said. He expects companies will soon develop data threads that will run across the lifecycle of a chemical.

Such ambitious data collection and analysis is being made possible by advances in digital technology, Sarathy said. Instead of conducting a limited number of tests on a physical product, companies can run an infinite number of virtual tests. Companies can avoid the time and expense of producing samples and running physical tests on them.

They can also avoid the limited data that comes with samples, Sarathy said. With new technology, companies can now analyse the performance of a whole population of products in real-time applications – versus the performance of a single product in a test setting.

The advent of the so-called "cloud" of internet-based computing provides companies with even more possibilities, said Robert McCutcheon, Pittsburgh managing partner, US industrial products leader, PwC. It allows them to bring together data from disparate sources.

Chemical companies are already incorporating new information technology in product development.

Virtual modelling is allowing many companies to test how composites and resins perform in new automotive applications. The auto industry is eager to adopt new materials to lighten the weight of their vehicles as it tries to meet ever-tightening emissions standards.

The auto industry, in fact, is hiring increasing numbers of chemists, said Antoine Westerman, a partner at PwC.

While companies are adopting new information technology, it might not be at the scale required in the future, Sarathy said.

New companies or new entrants could develop the disruptive platforms that the chemical industry or its customers need to make the most of new digital technology.

These could be businesses that do not make a physical product, Sarathy said. Instead, they would provide services and solutions to the companies that manufacture chemicals, or to the customers of those companies.

For example, a polymer films producer can use a wide variety of resins for multiple layers. If sensors are put in place to collect data on how each polymer is used, in which layers and how they perform, virtual tests can be run to determine optimal formulations.

“If a [Procter & Gamble] or a Kraft needs something specific, instead of going to a polymer producer, they may go to another entity for that solution,” said Sarathy.

“It’s game changing because you can use a combination of technologies – sensors, robotics, etc -- into an ecosystem that allows you to innovate,” said McCutcheon.

Chemical companies could face cultural barriers in making the most of the new opportunities provided by digital technology, Sarathy said.

While companies regularly collaborate with their peers, as suppliers, customers, or partners, they must be willing to work with businesses in other industries, he said.

If the chemical industry is successful, new digital technology could deliver it from the rut of low productivity growth that it and much of the world is currently struggling through, Sarathy said.

“What we call 'Industry 4.0' involves cultural change. CEOs realise this and worry about whether they will be able to make the changes to boost revenue and lower costs,” said Sarathy.

“Companies need to look outside themselves and have a willingness to collaborate with other sectors. The ecosystem plays a huge role,” he added.

For years, the chemical industry has achieved productivity gains through operational-excellence initiatives and similar programmes, Sarathy said.

These have largely played through. New information technology could provide chemical companies with the next stage of growth, he noted.

“There is a digital thread that cuts across the value chain, capturing and harnessing the data. The next tranche of benefit can come from this,” said Sarathy.

The ACC Annual Meeting runs through Wednesday in Colorado Springs, Colorado.