How Chemical Companies Must Transform to Succeed in the Digital Economy
Success is the new digital era is not a guarantee. Chemical companies that fail to evolve could very well lose whatever competitive advantage they currently hold in the marketplace. In fact, traditional strategies for maintaining an edge over competitors soon may no longer exist. With customer bases going east, eroding customer loyalty, and erratic geo-politics, customer proximity is no longer enough to drive sustainable growth and profits. Instead, chemical companies must re-image what they sell, and how they sell it. Instead of selling a particular product or service, for example, new combinations of offerings aimed at delivering “outcomes” are being introduced into the market. For example, Hagleitner Hygiene International, a leading manufacturer of professional hygiene solutions, has re-invented itself as a provider of “innovative hygiene.” Rather than selling soaps and sanitizers, this company has partnered with suppliers to deliver “The New Washroom.” This next generation of washroom uses smart products to deliver a clean washroom experience with features such as never-empty paper towel and toilet tissue.
If the saying that “every business is a technology business” is true, staying ahead of the curve means taking a hard look at existing practices and re-imaging everything from business models and processes to work management solutions. Below are a few inspiring examples of how companies are leveraging technology and connectivity to increase revenue and improve operational efficiency in this new digital, world.
Chemical Companies Re-imaging Business Models
Monsanto, a sustainable agriculture company focused on helping farmers increasing yield while conserving natural resources, has expanded its business model beyond selling corn and cotton seeds. Today, the company delivers improved crop yield outcomes through smart devices and a cloud-based analytics platform. Farmers can upload agricultural data (e.g. GPS locations, quantity of seeds planted, the amount of fertilizer sprayed) into Monsanto’s analytics platform. Monsanto then uses the information to compare yields in different fields within one farm, show how the outputs compare to nearby farms, factor in outside parameters such a climate and weather patterns, and offer recommendation for improving yield (MIT Technology Review, 2015).
Chemical Companies Re-imagining Business Processes
The new digital economy also offers many opportunities for adapting internal business processes to improve efficiency and the customer experience. For example, by integrating customers’ inventories with production plant data, chemical companies can provide new insight and support on orders such as real-time adjustments of delivery dates, automated document creation and integration with business networks for document delivery and payment. In the new digital economy, it is also now possible to provide on-the-spot, competitive pricing and delivery commitments.
Digital plant operations is another way companies are using technology to re-invent themselves. It is now possible to take plant operations to the next level of performance, safety, output and quality with touchless, digitally-driven manufacturing. Some of the innovative processes currently being implemented include: event-driven adjustments of production plans and schedules; sensor-driven diagnostics for all plant equipment; predictive models for asset maintenance and product quality; and automated material movements within plants using real-time integration into ERP systems.
Chemical companies also developing digital procurement processes that use predictive analytics to anticipate future spend, manage supplier risk, and provide real-time payment term adjustments for contract compliance. A final example of modifying processes based on new technology is the simulation of properties, performance and formulas of potential new products. The data is then used in predictive modeling to optimize yield, cost, compliance, and sustainability.
Chemical Companies Re-imagining Work Management
Millennials are the largest generation in the U.S. workforce as of 2016; yet 53% of hiring managers say it is difficult to attract and retain workers from this generation (Upwork.com). Chemical manufacturing companies need work processes which will empower employees with digital tools to solve problems using intuition, improvisation, and creativity. Robotic interactions and no-touch processes will further change the role of the worker towards an orchestrator and exception manager.
The right technologies ensure agility and a rich environment for innovation. As a starting point, ask yourself how can you deliver more customer value? Which processes can be adapted to leverage new technologies and be more efficient? And, how can processes be changed to deliver an improved work experience? With this three questions, you will be able to invest
New technologies not only offer opportunities for new business models, new products, and new ways to engage employees, but also help chemicals companies develop more customer value. Chemical manufacturers that can take data and use it to develop innovative digital capabilities congruent with their long-term strategies will be the undisputed leaders in the new Digital Economy.
Read the full article in Specialty Chemicals Magazine.