Four Imperatives Driving Chemical Companies to Digital Transformation
Almost every product in the world is touched by chemicals in some way. Either the product or its components are made from chemicals, or chemicals are used in the production process. This pervasiveness has made the chemical industry a hotbed of innovation as well as a target for the cost cutting efforts of every other industry. According to a recent report from the Marketing Research and Advisory Company IDC, chemical companies are turning to digital transformation to increase revenue and remain competitive. Here are the four top imperatives driving the chemical industry.
Faster New Product Introductions
Today’s chemical companies must engage with a broad range of stakeholders to ensure that new products meet market and customer needs. This requires rapid communication and collaboration with customers, suppliers, regulatory bodies and research institutes to ensure that the company uses all sources of knowledge in the innovation process.
Moreover, due to increasing global competition along with mass commoditization new products have to be brought to market quickly and chemical companies now use digital technology to simulate product and formulation properties, hence allowing them to cut time, cost and effort from the innovation process.
Big Data and the cloud help chemical companies to analyze future demand, as well as potential and success in new markets and segments. They also use analytics to help make product and portfolio decisions and ensure they invest in profitable innovations.
New Customer Acquisition
In particular in the specialty chemical industry, customers have unique needs and they rely on innovative chemical manufacturers to provide high performing products and formulations. Chemical companies use digital technology to closer collaborate with customers, anticipate their future requirements and develop value adding services focused on selling “business outcomes” instead of products.
Connecting machinery and equipment to sensors—a process known as IoT or the Internet of Things—allows chemical manufacturers to reduce costs and downtime with predictive maintenance. Using Big Data analytics enhances overall visibility across the entire value chain and the collected insight allows for better alignment with all stakeholders and better anticipation of disruptive events while reducing costs.
Leading companies in the chemical industry are rapidly adopting technology to support digital transformation and to help them master industry imperatives. Missing this opportunity means not only losing an opportunity to disrupt the market, it also means running a high risk of being disrupted by competitors or new entrants.