Contract Services

Digitalization in speciality chemicals: The strategic imperative

By Paige Marie Morse, Industry Director at AspenTech

Paige Marie Morse, Industry Director at AspenTech, explains how speciality chemicals manufacturers are looking to emerging digital

Paige Marie Morse, Industry Director at AspenTech, explains how speciality chemicals manufacturers are looking to emerging digital technologies to help manage operational complexities and optimize production.
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Specialty chemicals producers are under intense pressure. They need to be more innovative in product development. They need to manage operational complexity while delivering the variety and volume of products customers demand. And they need to maintain their assets more efficiently. It is a tough ask and, in seeking to address it, producers increasingly look to emerging digital technologies. 
The Executive board chairman at Evonik, Christian Kullmann, says, “For us as a specialty chemicals company, digitalization brings with it a world of possibilities.”
The diversified chemicals major Dow added Chief Digital Officer (CDO) to its Chief Information Officer (CIO) title last year to reinforce the company’s emphasis on digital tools.  At Fortune’s 2018 Brainstorm Reinvent conference, CDO and CIO Melanie Kalmar commented “Many companies have failed because they looked at digital as an add-on to what they do already … as a new tool. The reality is that you have to step back, simplify, and rethink how you execute your work on a day to day basis.” The value of using digital tools, she asserted, is to be more agile and to become closer to customers.
Better alignment with customers is one of three key emerging priorities in specialty chemicals – along with accelerating innovation and optimizing across the value chain – that digital technologies can help organizations address.
Aligning with customer demands
Models of manufacturing assets can be used to automate identification and evaluation of production scenarios across various timeframes. These models represent the full complexity and options possible, including production rates, constraints, set-up times, sequencing and site logistics. Specialty companies cite an 8–12% increase in on-time order fulfilment when these tools are applied.
Meeting customer needs includes ensuring that assets operate well and produce the targeted products.  Multivariate tools can analyse interrelated operational data to identify and eliminate sources of process variability. Businesses apply this analysis to batch and continuous processes to ensure more production meets specification.
Specialty chemicals manufacturers are continually looking to innovate and enhance product performance at lower cost. Digital technologies can boost productivity and reduce errors by easing the transition from laboratory to plant production processes.
Manual procedures, hand-written reports and paper-based systems are still common for critical activities such as recipe execution and raw material management. These isolated tools limit visibility into data and often delay responses to potential quality issues and regulatory requirements. Through digitalization, companies can achieve visibility of key data that, in turn, enables them to gain the necessary insight to drive improvements in quality and consistency.
Value chain
Rapidly-changing market and customer demands force frequent changes in production schedules. Adjustments as high as 25–45% each month are not uncommon. Planning and scheduling tools can help boost responsiveness and related profitability by incorporating key constraints – such as storage limitations and variable lead times – while minimizing excess inventory and off-spec production. Better scheduling capabilities can also boost asset utilization. At the same time, schedulers can see the impact of their decisions and make adjustments to avoid problems along the supply chain before they happen.
With targeted plant scheduling tools, the scheduler can rely on the model to inform decisions such as batch size determination, resource selection and batch sequencing. The technology enables better asset utilization and improved customer service by clarifying profit opportunities and extra costs in less than optimal operations.
The next step is vertical integration, which links manufacturing systems to scheduling. These systems can give visibility to storage tank levels, for example, so scheduling tools can decide when raw materials should be put in tanks and when they should be emptied. This link can also alert the scheduler if processes are taking longer than expected, allowing for adjustments across the plan.
Specialty-producer Criterion Catalyst & Technologies applied Aspen Plant Scheduler to its sales and operations planning process. Legacy tools provided less than three months visibility on asset availability, even as sales staff could not gain customer requirements in less than a six-month window. The redesigned scheduling process helped to better align customer demand timing with plant scheduling across 21 production lines at eight manufacturing sites.1
Benefiting from digital acceleration
Digital technologies allow specialty chemicals producers to address key market drivers such as accelerating innovation, optimizing the value chain and aligning with customer demands, effectively giving them a route map to future success.
The tools, services and solutions specialty chemicals producers need to manage their complex operations and achieve new levels of reliability and profitability are accessible to companies now. To take advantage of the opportunity, producers must first consider their primary business challenge and identify the relevant digital solution to adopt. That will set them on a path toward a more holistic approach to achieving optimum return over the asset lifecycle.
1.  Aspen Technology. Case Study: Transforming Sales and Operations Planning at Criterion. May 2016.