INSIGHT: Firms provide preview of digitalisation in action

08 June 2017 15:45 Source:ICIS News

By Al Greenwood

COLORADO SPRINGS, Colorado (ICIS)--Consultants and a chemical logistics company provided previews this week of how digitalisation could improve operations, cut costs and boost revenue for the industry.

In digitalisation, data is collected and converted into a digital format, allowing companies to manipulate it.

One example of digitalisation involves the use of sensors to collect data on the conditions of a chemical plant. Plant operators can track how a reaction performs under different temperatures and pressure in a vessel. They could then use the data to determine the safest plant operating conditions and maximum production potential.

Another example is using sensors to measure the volume of a product in a container. The sensor could notify consumers when the container is almost empty and order a refill. It could also keep track of how quickly the consumer is using the product, providing the manufacturer with data on customer behaviour.

Consultants have identified digitalisation as one of the ways that the industry can escape the slow-growth trap that is limiting how quickly they can increase earnings.  

Demand for many chemicals grows at multiples of GDP.  The economies of many developed countries have been expanding at slow rates for years, limiting the growth in demand for several chemicals.

If digitalisation can fulfil its promise, it could help chemical companies escape this slow-growth trap by helping them cut costs, increase sales or both.

In one example, companies could use 3D scanners to scan an entire petrochemical complex, from the reactors to the pipes, said Marc Carrel-Billiard, senior managing director at Accenture Labs.

These scans would provide an actual digitised model that the plant operator can access on a computer. If the parts are equipped with sensors, then data from the sensors can be overlaid onto the model, providing the operator with descriptions of the parts and real-time operating conditions.

Companies can also use these digitised models to develop training videos for new employees, Carrel-Billiard said. By using virtual-reality (VR) goggles, the new employees could go on virtual tours of the complex. Overlays could give the trainees information about each part of the plant.

VR goggles could also help employees who are conducting maintenance on the plant. Parts that need replacing can be scanned, to ensure that the right piece is ordered.

During evacuations, the goggles can show the employees escape routes, Carrel-Billiard added. These could be critical during a fire, when smoke would otherwise blind employees trying to escape. Personnel could be tagged with geo-trackers, allowing the company to account for everyone during a plant evacuation.

Such technology would be ideal for new plants, which is why the current boom in plant construction in the US could provide an excellent opportunity to try out these new technologies, Carrel-Billiard believes.

Such scans can also help during the construction of new plants, when contractors are reviewing punch lists (a punch list tracks construction project work not conforming to contract specifications that must be completed before final payment can be made). Instead of manually checking off punch lists, personnel can scan the various parts and match those scans with the plant's CAD/CAM model (computer aided design/computer aided manufacturing).

In another example, companies can install sensors on various parts of their plants that can then help them coordinate the restart of operations following a turnaround. Restarting a plant requires careful coordination when valves are turned back on. In the past, personnel carried out this coordination using walkie talkies.

Carrel-Billiard said digitised plants could carry out this coordination through instant messages sent to smart phones or tablets via the sensors.

Digitisation can also help companies move from a strategy of selling products to selling services, Accenture suggested.

Nalco Water, a subsidiary of US-based Ecolab, sells sodium aluminate to clarify water.

Recently, the company began selling a system that measures water quality, Carrel-Billiard said. When the water needs sodium aluminate, the system adds it.

The system frees the customer from regularly testing the water and adding the chemicals, Carrel-Billiard said. Nalco Water has 1 trillion gallons (4 trillion litres) of water under the system.

These and similar types of digital systems can provide chemical companies with data about how their end customers use their products.

Companies can then analyse that data and develop services and solutions for these end users, said Vijay Sarathy, principal, advisory, PwC.

"If you want to offer solutions, you have to understand problems," Sarathy said.

Digitalisation can give chemical companies the data they need to understand problems and provide solutions. "Digitalisation gives you insight," Sarathy added.

However, this insight does not come without obstacles.

Often, chemical companies do not directly sell to end consumers. They may sell their product to a manufacturer, who uses it to make a part or the final product. Ultimately, finished goods end up in a store, where they are bought by the consumer.

The data collected by each of these parties could be on differing platforms, Sarathy said, making compatibility difficult.

Plus, there are questions about who owns any data collected about the customers' behaviour, Sarathy added.

Adopting digitalisation does not have to be on the more ambitious scale portrayed by the consultants.

US-based chemical distributor Univar has developed a sales-order system that speeds up the process for repeat customers and provides them with additional datasheets for the chemicals that they order, said Ian Gresham, chief marketing officer of the company.

Many of Univar's customers order by email and many of them buy the same chemicals, Gresham said. The system lets customers reorder in as few as two clicks. The process is faster and it helps reduce errors that could be made in placing orders.

By Al Greenwood