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Chemical companies are investing billions of dollars in technology solutions designed to capture, process and use data generated from a myriad of devices,
partners and industry systems. As companies explore what is being called the Internet of Things, they are seeing substantial return on investment in the form
of equipment effectiveness, reduced quality costs, improved supply chain visibility and much more. Chemical executives that know how to successfully navigate this era of Big Data are transforming the way business gets done, while those that lag behind are jeopardizing the future.

The Internet of Things

The Internet of Things (IoT) is defined by Gartner, Inc. as a network of physical objects that contain embedded technology to communicate and interact with their internal states or the external environment. The amount of information flowing to and from these smart machines is incredible. Yet, data by itself is relatively useless. It is only when chemical companies have the intelligent systems and technology backbone in place to capture the data and convert it into action that the true value of the Internet of Things can be realized. For example, IDC forecasts the IoT revenue opportunities for process manufacturing industries (including chemicals) will be $167 billion by 2018.

Actionable data

A lot has been written on the data being generated by sensors embedded in everything from test tubes to turbines. Yet it’s difficult to understand the
tangible benefits of the Internet of Things without some concrete examples to explain how newly available information is being used to change the business of chemical manufacturing. Below are a few ways chemical companies are capturing data and using it to make insightful business decisions. Of course, it is
important to remember that companies are just beginning to understand how to operate in this new, data-intensive environment.

  • Predictive maintenance: Today’s assets like chemical reactors are more intelligent thanks to embedded software and analytics that can
    diagnose their health. Assets send signals about their status and performance to predict possible malfunctions and maintenance needs. 3D asset visualization delivered in a spatial context, known as augmented reality, further enhances maintenance from a service perspective. 
  • Operational intelligence: Chemical firms generate volumes of data during manufacturing, but they exploit only a small amount to improve
    decision making and add value. By blending all your data, analyzing it in real time, and federating results for intelligent decision making, you can improve operational, safety, and environmental performance. 
  • Quality assurance: The ability to analyze large quantities of data quickly can improve quality assurance and processes. Many chemical companies focus on the last 30 batches of materials to manage process quality and controllability. Today, companies can analyze tens of thousands of batch
    results across the enterprise and use the broader data set to change operating conditions and improve quality.
  • Smart products and connected logistics: In a complex and heavily-regulated, global business environment, it is important to have an
    integrated supply chain. Data from sensors embedded in product packaging or transportation assets can help to track and trace the location, condition, and authenticity of products. For example, alerts or signals from RFID tags can identify when temperature or moisture levels deviate from acceptable ranges or provide evidence for counterfeiting of shipped products on their way to the final destination. Also, sensors can help with locating containers and even track moving assets to prevent loss. 
  • New business models: Today’s farmers want to produce higher yields using fewer chemicals in a very precise way. Called “precision farming,”
    this approach relies on an ecosystem of farmers, agribusiness suppliers, equipment manufacturers, traders, and technology providers. These stakeholders need a secure, Big Data–enabled platform for accessing and sharing data to support precision farming. Sensors capturing and transmitting information such as local weather data, GPS data, or soil specifics including fertilizer and crop
    protectant levels are pivotal to success of such innovative business models.

Part 2 of this blog will elaborate on the role of technology as foundation for IoT driven business transformation.

Read also the CEO Perspective on the Internet of Things for Chemicals and follow us on @sapindustries for the latest updates on SAP Industries news,
insights, and events.

Note that this post originally appeared on SAP Business Innovationhttp://blogs.sap.com/innovation/industries/the-internet-of-things-what-it-means-for-the-chemicals-industry-01862495

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