Redefining Chemical Manufacturing with the Industrial Internet of Things (IIoT)

The chemicals industry is at a crossroads that requires all manufacturers to evaluate their existing processes and redefine their value propositions. For nearly a decade, the industry has been exposed to cyclical market conditions such as changing demographics, soaring cost of raw materials and labor, rising competition, and changing customer preferences. This has resulted in slim profit margins, especially for chemical manufacturers predominantly focused on commoditization, now suffering from overproduction. This has disturbed the demand and supply equation. Moreover, with increasingly stringent environment and health safety regulations, it has become indispensable for manufacturers to identify alternate sources of energy to produce chemicals. This strengthens the need for the industry to focus on the development of blockbuster chemicals.

Assessing the industry performance across various regions shows that the landscape of chemical manufacturing has undergone a tide of fluctuations. Europe, the global leader until 2000, dramatically lost its market share to Asian countries, particularly China and India. This was largely due to the increase in chemical demand and the sharp rise in investments by chemical giants in countries such as China, India, Japan, and Singapore. These countries now have multiple research innovation hubs and manufacturing plants. With these significant developments, Asia-Pacific currently accounts for about 60% of the global chemical revenue. This scenario is expected to sustain in the forthcoming years despite volatile economic conditions. In Europe, distressed by the withdrawal of new chemical investments and closure of steam cracker plants, growth prospects are likely to remain subdued. However, with public-private partnership programs (such as Industrie 4.0) promoting the adoption of advanced automation and IT solutions, production efficiencies of existing chemical plants are expected to improve, restoring the region’s growth opportunities.

North America is reaping immense benefits from shale gas exploration that has radically increased the availability of ethane, a crucial feedstock for chemical production. This has not only reduced the region’s import dependency, but also drastically reduced the cost of procuring raw materials.

In such a challenging business environment, emergence of the Industrial Internet of Things (IIoT) and digital technologies is a boon for chemical manufacturers to transition toward favorable business and operating models. The key advantage with these revolutionary technologies is that they integrate various functions across the value chain, thereby establishing a digitally connected ecosystem in the chemical manufacturing environment. Chemical enterprises are well positioned to increase their production throughput, enhance asset lifecycle, maximize resource utilization, and achieve operational efficiency. This is imperative especially in the present market scenario that demands shorter innovation cycles, superior quality at optimal cost, and reduced time-to-market. Industrial IoT serves as a nervous center offering end-to-end support right from product development, planning, and scheduling and commissioning to production, packaging, inventory management, and marketing and distribution.

The below illustration provides an overview on various IIoT technologies that facilitate the transformation toward digital chemical plants.

digital chemical plants

Role of Industrial Internet of Things (IIoT)-based Technologies across the Chemical Value Chain

Given the dearth of innovation in the chemicals industry, IIoT serves as a pivotal tool for researchers with regard to data accessibility, performing experiments, engaging with end users to understand their requirements, and effortlessly connecting with plant engineers during the production process. For instance, virtual simulation enables chemical researchers and engineers to perform multiple trials of their new innovative chemical in small portions and understand its design, characteristics, and reaction. The biggest advantages of this method lie in its cost-effectiveness and mitigating the risk of failure during the implementation phase.

Similarly, IIoT helps in the transformation of traditional chemical plants to digital plants. It enables successful plant commissioning and operation, effortless assessment and management of batch production of multiple variants at any given time, efficient utilization of resources by allocating in value-adding activities, and real-time monitoring aiding in effective decision-making to enhance asset life cycle and plant reliability. Thus, digital chemical plants help in optimizing the production process, increasing production efficiency, and reducing energy consumption and operational cost.

In the present context, chemical enterprises also face the challenge of an aging asset infrastructure that has caused huge production delays and losses due to unplanned plant shutdown. IIoT helps in overcoming these challenges in chemical processing. It facilitates remote and continuous monitoring of plant performance on a real-time basis, interprets and visualizes data on asset behavior, and enables timely and corrective decision-making with regard to plant maintenance. This helps in the transition toward predictive maintenance, which in turn increases asset availability, improves overall equipment effectiveness, and extends asset lifetime.
In the chemicals industry, there is a certain degree of skepticism with regard to digital and IIoT technologies. This is largely due to cyber threats that infringe enterprises’ intellectual property and plant network. Over the recent years, automation giants and niche IoT and cybersecurity companies are collaboratively working toward the development of a secure IT-OT infrastructure. Moreover, assessing the benefits of digital chemical plants that boost overall efficiency, several industry giants such as BASF, DuPont, Dow Chemicals, Evonik, and Clariant are actively investing in IIoT solutions. Such investments are expected to record an uptake in the forthcoming years as chemical enterprises strive to develop innovative and sustainable chemicals following efficient and safe processes.

About Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

Frost & Sullivan

For six decades, Frost & Sullivan has been world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success.

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