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Digital transformation (DX) is one of the hottest topics lately, with companies wondering what it means for them and how they can leverage digital technology to transform how they conduct business. This is no different for the chemical industry, where chemical companies are looking for any edge in order to maintain competitiveness, grow revenue, and drive market share. For an industry that is constantly innovating in terms of product and process, the question then becomes what are the technological advances that are in place to support digital transformation in chemicals? For starters we can look at the following:
The Internet of Things (IoT) – IoT is the network of independent devices, connected to the internet, with the capability to both send and receive data signals. The abundance of sensors and ubiquitous connectivity throughout all stages in the chemical supply chain are enabling chemical companies to connect with the business processes at each stage in the chain. Chemical companies benefit from IoT in many ways, such as manufacturing process improvement where they can leverage predictive maintenance to improve the production process and distribution and logistics to improve visibility and tracking of assets in motion. IoT initiatives can be massive projects or can be implemented as point solutions. Companies thinking about IoT can start small by looking for purpose-built IoT applications that have the capability to leverage big data and analytics to solve specific business problems.
Cloud Computing – Increasingly, businesses across sectors are turning to the cloud as a means to reduce cost and increase scalability in the IT architecture. From a DX perspective, moving IT applications enable companies to leverage modern cloud applications without the time, cost and risk typically associated with implementing systems. Many leading application vendors now offer the products for cloud-based deployments, and there exists an abundance of purpose-built applications only available in the cloud.
Commerce Networks – In recent years, we have seen a continuous uptick in companies leveraging commerce networks. Participation in commerce networks is rapidly expanding beyond the traditional use of indirect procurement to include things such as direct procurement, logistics, warehousing and service networks. Participation in such networks enables chemical companies to digitally transform their approach to conducting business. Benefits include simpler transactions, reduced cash-to-cash cycle times, greater visibility, and increased access to vendors.
Collaboration Platforms – Collaboration is a critical element in the innovation process in the chemical industry. There has been tremendous progress made with these platforms to enable the chemical industry to improve how they share ideas, information, and data across functional and organizational boundaries. Collaboration across the internal organization is critical, but chemical companies must improve how they provide visibility, data access, and the collaboration process with customers, partners and other external stakeholders.
The rapid pace of change in the market is driving chemical companies to increase the pace and quality of innovation to keep up with the market. The maturity of digital technologies is providing the chemical industry with the technological tools to improve their innovation process through DX initiatives focused on providing greater access to data, visibility across the ecosystem, and overall improvement to the business processes.
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