Chemistry 4.0: Reinventing the chemical company | KPMG | BE

Chemistry 4.0: Reinventing the chemical company with digital transformation

Chemistry 4.0: Reinventing the chemical company

Digital transformation has become a part of the fourth and latest industrial revolution. Although many industries are making great strides in digital transformation, the chemical industry has been more laggard than leader. However, to remain competitive and explore new opportunities, many chemical companies are using digital technology for smarter manufacturing, stronger customer relationships, and faster innovation. In the front ranks of digital transformation are companies that are no longer selling chemicals; they’re selling solutions to customers’ problems through new business models for the delivery of enhanced services and customized specialty chemicals.

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Making your next move

On the global chessboard of the chemical industry, leaders are well aware of the potential of digital technology, but many are still moving cautiously and selectively in their progress toward real transformation. Chemistry 4.0 strives to digitize and transform every element in the value chain, but new technology is often limited to point solutions or upgrades to existing systems and processes. In many cases, innovation is held back by a vicious cycle: the lack of budget for digital initiatives means that fewer resources and skills are acquired which, in turn, results in fewer digital achievements that could justify a larger budget for digital investments in the future.

A way out of this dilemma starts with the customer.

Customer-driven innovation

Today’s customers know what they want ─ and they want it now. That’s why increased growth and volatility in customer demand is helping to kick start innovation for manufacturers and the chemical companies that supply them.

Digitization enables companies to provide end-customer solutions and new services by adapting business models. For this to work, understanding customers and customer demand is essential.

Demand modeling analytics can incorporate internal and external elements such as market trends, seasonal demand profiles, and order history by product and account. Demand collaboration brings together demand and forecast data from multiple sources in a web-based platform, helping to support better promotion planning, forecasting and monitoring of customer demand.

Improved forecasting and knowledge about the customer can improve connectivity, increase customer proximity and strengthen customer loyalty. By providing manufacturers with tools and platforms oriented to their value chains and requirements, chemical companies can successfully integrate themselves into their customers’ businesses over the long term, further deepening their understanding of their customers.

Steps toward transformation

Chemistry 4.0 is an imperative. The question is where to go next. Leading companies are positioning themselves to transform their business models to deliver tangible customer results versus selling increasingly commoditized chemical products. The era of digital technologies transforming industries, inevitably leads to a dynamic environment full of unexpected challenges and disruption. However, the chemical industry must make the process of digital transformation and Chemistry 4.0. their own. This is the only way to ensure sustainable, quick and financially viable development.

Depending on a company‘s requirements, the following steps should accompany the transformation process:

  • Analyze and optimize previous digital initiatives
  • Develop new, individualized products and services
  • Create a technology platform that can be used by suppliers, customers and other partners to develop new products and services
  • Develop a networked ecosystem into a dynamic value chain
  • Gain buy-in and support the involvement of all stakeholders in digital transformation initiatives.

REACTION Magazine

Reaction is published three times per year and focuses on key issues impacting the chemical and performance technology industry.

 
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