Commentary: Digitisation comes of age for chemicals

Source: ECN


The chemical industry is gradually becoming aware of the benefits that digitisation can offer in terms of efficiency and cost savings. But it takes a leap of faith to move from awareness to spending money and being prepared to alter business processes.

Chemical companies are opening up to digitisation and, anecdotally, ICIS journalists are hearing of more examples across the industry. Consultants Accenture are so convinced that the age of digitisation is upon us that they have launched a new practice known as Industry X.0 aimed at helping companies tap into new technologies.

The group claims that the average chemical company could boost market capitalisation by more than $4.4bn through adoption of an optimum combination of new technologies. They also estimate cost savings of $91,261 per employee are achievable.

Pete Frandina, North America Industry X.0 lead, says that technologies need to be combined and not seen in isolation to get the maximum benefits. Remote monitoring and communication between employees on sites can help with allocation of resources as well as safety and protection. For example, wifi, cellular and radio frequency identification (RFID) can be combined with real time gas detection systems worn on the person, allowing employees and control rooms to react quickly to emergencies. “You have the combination effect from getting safety and productivity benefits by having the ability to use active cellular technology in a fairly dense industrial setting,” says Frandina.


Digital technology is coming of age in chemicals


Plant turnarounds are another area where this technology can save time and money, according to Accenture. By monitoring employees and contractors as well as equipment it is possible to identify bottlenecks and inefficiencies in real time. This allows managers to begin to take what was a qualitative situation and add measurable, quantitative elements. Frandina has worked with companies which have achieved up to 20% in labour cost savings on plant turnarounds buy using this technology.

Because it is real time, learnings from one day can be applied to the next, allowing continuous improvement over the course of a turnaround.

Early adopters of new digital technology in chemicals are already using devices for workers which allow them to pull in information whilst out on site. This could include any digital documents, training videos, or hooking up live to get advice from more experienced technicians.

Labour costs have spiralled up to $100/hour amid the US shale-based construction boom. This gives an extra impetus for investment.

Collection and analysis of data on a massive scale is another new area where the industry can benefit. Chemicals is a highly globalised industry and this can result in data being stranded. “Digitisation allows data to be gathered in a more centralised manner where intelligence can allow data to be presented to operational team members in new ways. By comparing sites or equipment, new insights can be given to decision-makers,” says Frandina.

Artificial intelligence can now analyse data over time such as temperature, pressure, flow, plus installation and overhaul history to give enhanced insights for processes and equipment. Analytics can help predict and prevent breakdowns.

To implement a digitisation strategy, companies need to be open to change. Pilots can be carried out at one or two facilities. Next, a plan needs to be implemented across the business: “You will need structures in your organisation to take the vision and then scale things up that drive value whilst moving on from aspects that do not work out,” according to Frandina.

More rapid prototyping means technology can now be implemented and tested in weeks rather than months or years. Where companies can fail is the next step: they may be happy with the pilots but do not have the infrastructure to scale the technology across 30-40 sites.

“Digitisation is not just about driving out costs but also developing alternative sources of revenue. You can enhance the services you offer, getting topline growth as well as better customer stickiness,” says Frandina.