Big Data is influencing the chemical industry in a big way. Companies deal with vast volume of data from business units, research labs and production centers, which need to be easily accessible so that they be leveraged to increase margins, optimize production and business processes and enable innovations.
Big Data can be used to detect product defects, boost quality and improve supply planning. The ability to solve previously unsolvable problems and make better operational decisions in real time and use these insights to empower frontline decisions is a powerful combination. The chemical manufacturing industry can use Big Data to address existing challenges and, at the same time, create new business opportunities.
Acquiring data is not hard, but finding a way to transform the data into useable information can be. By utilizing Big Data, an organization can take data from multiple sources, harness relevant data and analyze it to: reduce costs, improve margins, utilize assets, generate revenue, develop new products and optimized offerings, and make smarter business decisions.
Crossing the Hurdles
Global growth and consumption is moving toward developing economies. Benefits of globalization aside, there are three challenges presented by this shift. First, resources are required in developing countries where the supply of skilled labor has not caught up. Second, the current skilled labor force is retiring, creating a shortage. Third, other opportunities are more appealing to engineers than careers in the chemical industry; since the existing skilled labor pool is smaller, they demand higher wages. Each of these challenges leads to increased labor and production costs.
Another challenge to consider is complying with local and regional Environmental, Health, Safety and Security (EHSS) requirements. Regulations are rapidly changing and the rate at which new regulations are introduced is increasing, making it difficult to keep up with the requirements. Regulations impact material handling, production, raw materials, labeling and packaging, which means complying with EHSS regulations is vital to the performance of organizations.
Executives have limited visibility into their business and operations. Without the necessary tools, they rely on experience, “gut feeling,” and certain reports. Since reports are based on stored data, and because the chemical manufacturing process is complex, it also becomes difficult to customize products without the right tools to analyze the organization’s dataset.
Large volume of data is available for products, customers and operations. The challenge is in leveraging Big Data to help understand each of these areas and provide information to manage the business better and create new opportunities.
Big Data Presents Opportunities
Big Data allows organizations to create customer and product segmentations and tailor products and services to meet those needs. It can also be used to analyze your customers’ customer, providing insights into product trends. Analysis on how the products (chemicals) are being used by your customers can mean more successful introductions of products. Market analysis to bring the right product, for the right people, at the right time is vital, and Big Data provides those insights.
With the intense competition, chemical manufacturers need to understand the profitability of customers, products and individual sales transactions. This is solvable by understanding the existing price variability and demand elasticity. Understanding the dispersion of existing prices and reviewing margin outliers among their customer base means companies can explore the underlying causes of their under-performance. Big Data allows companies to analyze differences between customers.
Analysis helps create variants of existing products. These variants can lead to production processes that lower production cost per unit or alternatively produce a higher quality substitute with higher profit margins. Since the chemical manufacturing process is complex, it becomes difficult to customize products. However, Big Data allows companies to make these types of decisions based on customer analysis. Big Data can also anticipate future customer requirements and industry trends.
Big Data provides executives with real time data in a structured format, enabling them to make decisions based on fact instead of “gut feeling." Real time data is presented in a scorecard format that executives can then use to pull detailed reports.
Another opportunity — partly driven by innovation and increased use of green chemicals — is to continue enabling emission and pollution reductions in other sectors of the economy. The chemical industry is moving toward sustainability, using raw materials made from renewable resources to manufacture products and developing products that require less energy or use alternative energy sources for manufacturing. Big Data is used to analyze which components cause the most emission or pollution and replace them with new products. By installing smart technology to monitor energy consumption, the data collected can be analyzed, and an energy utilization plan can be prepared to optimize energy usage. By leveraging Big Data in the analysis of all potential alternative chemicals, companies can quickly find the most profitable and safe long-term chemical formulation.
By integrating data and applying advanced analytical techniques to raise their productivity, manufacturers can increase efficiency and improve product quality. In emerging markets, manufacturers can begin to build competitive advantages by capturing the market share and improving margin enhancement. In developed markets, chemical companies can use Big Data to reduce costs and deliver greater innovation in products and services.