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Rising Data Security Risks in Chemical Plants
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Rising data security risks in chemical plants
Rising data security risks in chemical plants 700 500 Xcelpros Team

At a Glance

Digital security threats are increasingly targeting industries—including the chemical sector—to the point the Department of Homeland Security is now issuing cyberterrorism guidelines. Among the protection and detection resources a few chemical softwares available are:

  • Free detection and protection tools for small and midsize chemical companies from Homeland Security.
  • A free report to help companies detect abnormal behavior in a computer network before damage occurs from the National Institutes of Science and Technology (NIST).
  • Several ways to protect distributed data on Microsoft’s Azure cloud computing platform.

Introduction

Using technology to automate factories has the potential to revolutionize the biochemical and pharmaceutical industries. The same technology permitting rapid development and customization, though, also exposes these factories to new risks from outside actors.

Factory technicians have the ability to track progress at every stage, permitting adjustments when required. Whether it’s creating a new drug virtually and using technology to anticipate how it will perform, and then tweaking it to get the right results, or producing medicines customized for a single patient, all of these methods share common tools: computers.

These same smart factory methods permitting efficient manufacturing also open the facilities to new vulnerabilities in the form of undesired computer modifications, known colloquially as hacking.

Potential Threats to Production Facilities

Connecting sensors and devices, along with accessing vital systems and information remotely, “results in manufacturing networks with greater vulnerabilities to cyberattack,” a recent article in Quality Digest states.

The most recent example occurred April 11 at Iran’s Natanz nuclear processing site. A power system used by centrifuges required to process uranium was demolished, requiring an estimated nine months of work to bring it back online. Another example cited in a 2014 The Wall Street Journal article explained how a targeted email sent to a German iron plant allowed intruders to cross into the production network. The result was an inability to shut down a furnace normally, causing severe damage to the entire system.

Types of Cyber Attacks

Cyberattacks can come in several forms depending on the attackers’ goals. These include:

  • Stealing sensitive and important information, such as materials covered by patents.
  • Installing malicious software, allowing attackers to control critical systems.
  • Damaging production control systems

Cyber attackers usually have one of two goals in attacking anyone or anything, including a biochemical or pharmaceutical production facility. The goals are:

  • Money in the form of a ransomware attack demanding payment to release control of these systems.
  • Sabotaging machines with the goal of hurting a plant or company.
  • Political motivations (e.g., Iran claims the April 11, 2021 attack was caused by Israel)

 

3700customer records were taken from LC Industries in June 2015

40,000 research files were taken from DuPont by a former employee

900,000customer records stolen from Hanes Brands in mid 2015

$54 million was stolen from aircraft manufacturer FACC in early 2016

Source: Digital Guardian

Monitoring Industrial Systems

The National Institute of Standards and Technology (NIST) recently released its “Securing Manufacturing Industrial Control Systems: Behavioral Anomaly Detection” report, which is available free.

Behavioral anomaly detection (BAD) monitors industrial systems for unusual events and trends. Using smart factory technology such as the industrial internet of things (IIoT) sensors, BAD looks for real-time evidence a system is being compromised. Instead of reacting to an attack already underway, or finding evidence a cyberattack happened in the past, BAD monitors industrial control systems and operational technology (OT). This lets factory technicians monitor what is happening.

When an operator sees signs of an unauthorized connection or device, the operator can stop it. One example cited in the Quality Digest article is knowing what communications are allowed with the programmable logic controller (PLC) common in many industrial machines. Unauthorized connections can generate an alert, letting the human operator know intervention may be required.

Figure: 1 An example of computer alerts in the Cyber X console (courtesy NIST)

computer alerts in the Cyber X console

Tools and Resources for the Chemical Sector

“Securing these chemicals against growing and evolving threats requires vigilance from both the private and public sector,” the Cybersecurity & Infrastructure Security Agency (CISA) states in an article on the Chemical Sector. This sector includes pharmaceuticals. Tools and resources are available to small and midsize chemical facilities through the CISA designed to aid chemical facility owners and operators, risk managers, business continuity planners and others.

CISA states these resources are not to be confused with the Chemical Facility Anti-Terrorism Standards (CFATS), which focuses on high-risk chemical facilities. The program identifies and regulates high-risk facilities, reducing the risk of hazardous chemicals being weaponized by terrorists.

NIST also has tools available through its Cybersecurity Framework webpage.

Azure Has Tools to Fight Cyber Attacks

While many small and mid-sized businesses lack the financial resources to fight cyberattacks, commercial tools do exist. One advantage is they remove much of the computing burden from on-site servers and move it to the cloud. Especially in a business environment where many employees and managers work remotely, possibly in different countries with varying degrees of cyber security, the ability to protect data and operations becomes critical.

One of the top products of this type is Microsoft Azure, a cloud computing platform with services including Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS).

Using remote data servers (i.e., cloud computing), Microsoft uses a layered approach to ensure its physical facilities storing data from remote factories are secure. Access approval is required at the facility’s perimeter, the building’s perimeter, inside the building and on the datacenter floor. Customer networks are isolated in Azure. Per Microsoft the isolation improves performance and security.

Physical access to computer hard drives is not a typical security issue for most companies. Stealing or damaging the data on them, though? Worrying about that can lead to sleepless nights. One benefit of using Azure is its ability to accept data from Microsoft Office 365 programs such as Access and Excel. Microsoft Azure Sentinel provides intelligent security analytics. The Azure data security platform also provides other forms of security. This includes:

  • Structured query language (SQL) authentication
  • Multi Factor authentication by users
  • The ability to lock various computer resources
  • Constant security updates automatically applied to the overall system by Microsoft

Multi Factor authentication, for example, sends a code to a user’s email account or cellphone. The user must input this code to gain access. Azure also has its own Security Center that provides an overview and recommendations for making each subscriber’s virtual network and virtual machines more secure. Reports are exportable in a format readable by programs such as Microsoft Excel. Azure’s Security Center also provides:

  • Details on security incidents with recommended actions to prevent similar issues
  • Built-in remediation proposals, requiring only mouse clicks to activate them
  • A wealth of information based on industry-specific policies for a specific country or region

Final Thoughts

Cyber attacks on industries are increasing worldwide and a better infrastructure without the maintenance hassle is the direction that more companies are preferring. Microsoft’s Azure cloud computing platform includes many security features designed to protect data when using a distributed workforce.

Aiming to transform into a risk-free organization with Azure? Start the trial!

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Enhancing Chemical Plant Operations to Make it Smart Factory Ready
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Enhancing Chemical Plant Operations to Make it Smart Factory Ready
Enhancing Chemical Plant Operations to Make it Smart Factory Ready 700 500 Xcelpros Team

Introduction

Creating an Industry 4.0 smart factory requires time, planning, money and employee buy-in. Companies are advised to develop a roadmap showing what they want to do before they start. Improving communication through a digital platform ensures alignment between people, processes, and technology.

Smart factories are facilities using computer technology to transmit real-time status of every machine to a central hub. The data is used to make decisions on the spot, avoid production delays, and provide opportunities to improve efficiency.

In these factories, a combination of electronic sensors connected to a computer network provides a constant flow of information. When combined with artificial intelligence software, the computers make autonomous decisions, improving chemical plant production.

In the United States alone, 86 percent of manufacturers believe that smart factories will be the main driver of competition by 2025.Source: Deloitte

How it Works

Enhanced communication between machines means: Receiving tells Procurement what raw materials arrived and when. Procurement knows what supplies are on-hand and what must be ordered. Machine A has the materials it needs to create products. Machine B is working on a different product instead of being idle while waiting on Machine A. Machines A through Z are programmed to perform their jobs and let human workers know when potential problems may occur. Sales knows what finished products are available for shipping and what is in the pipeline. Customers know when they can expect deliveries in the time and quantities they require. Best of all, this information is available in real-time, so everyone knows potential problems and how they can work around them.

Acquiring data from the industrial internet of things (IIoT)-enabled devices and rapidly analyzing it turns standard factories into smart chemical plants.

These plants can rapidly view their entire supply chain from inventory to production to sales. Having the ability to keep track of production flow and ensure the supply chain flows smoothly is the function of specialized software such as Microsoft Dynamics Supply Chain Management.

Converting an existing plant using older manual devices, though, takes time, effort and money. Thought and a lot of planning are required to bring an analog factory up to this level gradually.

Critical smart technologies include hardware components such as sensors, industrial internet of things (IIoT) connections, factory floor networking connections and cabling plus data storage for millions—possibly billions—of datasets. Company computers—either on-premises or connected via the cloud—require software able to organize and manage the data using artificial intelligence. One such product is Microsoft Dynamics Supply Chain Management.

Figure: 1 Working of a Connected Factory

Connected Chemical Factory

Industry 4.0

As part of the Fourth Industrial Revolution, commonly known as Industry 4.0, smart factories build on computerization added to manufacturing processes in the mid 20th Century’s Third Industrial Revolution.

Above and beyond automating individual machines, Industry 4.0 smart chemical plants have:

  • Dramatically increased data collection, allowing more accurate decision-making.
  • Increased automation to encompass entire production runs. This produces goods more efficiently, including during times when humans are not present.
  • Improved flexibility allowing factories to mass-produce lots in any size from one unit on up.

5% Percentage of factories are fully “smart”.

30% Percentage of factories are being updated to smart status.

65% Percentage of factories are not making progress toward smart status.

Source: Deloitte Insights

Smart Factory Challenges

Factory owners face several potential barriers to converting an existing facility into a smart factory running more efficiently with minimal downtime and defects. These barriers may include:

  • Employees accepting ongoing training and developing needed skills. Deloitte estimates a 2 million worker shortage in the US alone over the next decade.
  • The cost of updating factory floor machines to include sensors and information sharing capabilities. Some existing machines can be modified, while others may require replacement.
  • Networking all data collection points to ensure a smooth, continuous information flow. The information can flow to a central server on the premises or remotely.
  • Accepting the concept that smart factories cover the entire company, not just the production floor.
  • Ensuring all updated devices are compatible and can be integrated into a complete network.

Leading the Conversion Change

Some companies appoint “change champions” to lead their company into the smart factory 4.0 era. These people are often tasked with making the technology updates relevant to workers.

Change champions, which Deloitte’s research suggests, should be from the top-down (e.g., upper managers) and bottom-up (e.g., factory workers), help gain employee buy-in.

Their chief focus is answering the question, “What’s in it for me?” from individual workers’ perspectives. For example, change champions explain how mastering automation gives workers the ability to head off potential problems before they occur. Fewer problems in the production process mean greater output—and likely more sales—which benefits the entire company.

Change champions also explain to staff how they will benefit by gaining the new skills smart factories require. Additional training equals more skills and that translates to more opportunities for improved pay and job security.

Chemical Plant Automation Devices

One step existing factories must take to become smart chemical plants is updating equipment. For example, valves that factory workers open and close manually should be replaced by semi-conductor enhanced valves that do it automatically.

Among the many chemical treating instruments required to provide a smart factory technology with the information it needs are:

  • Smart pressure transmitters equipped with microprocessors and semiconductor pressure sensors that can directly measure pressure in pipes.
  • Microprocessor-equipped differential pressure transmitters to measure flow rates, pressure and liquid levels of gases, fluids and steam.
  • Flowmeters for measuring gas, steam and liquid, including vortex models that permit correcting temperature and pressure.
  • Level transmitters equipped with microprocessor sensors for measuring levels in liquids.
  • Control valves such as eccentric three-way rotary valves for mixing or dividing fluids.
  • Temperature controllers to ensure temperatures are within a device’s operating range and notify personnel of potential equipment problems before they occur.

The combination of electromechanical devices such as these with monitoring software lets workers watch conditions on the smart factory floor from literally anywhere: an office in the plant or a laptop on the beach.

Computerized positioners lets trained workers know the deviation between a set valve opening and the actual valve opening. This knowledge helps workers detect signs of impending valve failure before it occurs.

Creating A Roadmap to Success

Companies wanting to update their factory to a smart chemical plant may want to follow a path similar to this one:

  1. 1.Map a smart manufacturing strategy based on each firm’s specific industry dynamics. Be agile and able to change direction when real values begin emerging.
  2. 2.Create a smart pilot project with proofs of concept that demonstrate the project’s value to the company. Embrace failure and learn from mistakes.
  3. 3.Define the required capabilities using a scalable data model. Ensure the technology used in one area communicates with that used elsewhere.
  4. 4.Identify smart manufacturing insights appropriate to the company, such as cross-functional data analytic teams. Share information between teams to avoid duplicating efforts while gaining additional insights.
  5. 5.Institutionalize new approaches to prevent older, less efficient methods from creeping back into the updated operations. Show the staff concrete examples of how the technology upgrades are making a proven difference in the chemical plant operations.

Figure: 2 Creating a Roadmap to Success

Roadmap to Success

Key Takeaways

  • Converting an existing factory to a smart chemical plant requires time, effort, money and patience. Factory owners and managers must overcome barriers on the way to achieving their goals.
  • One of the most important tasks is appointing Change Champions at the top (executive) and bottom (factory worker) levels who work together to get the entire workforce on board.
  • Advancing into the Industry 4.0 era means updating devices to provide a constant flow of data. Companies should create a roadmap showing how they will move from their current position to be a smart factory.

Get a consultation on transforming into a smart chemical factory.

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Ensure Workplace Safety with The Proper Handling of Hazardous Chemicals
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Handling Hazardous Chemicals at Workplace to Safeguard Health and Environment
Handling Hazardous Chemicals at Workplace to Safeguard Health and Environment 700 500 Xcelpros Team

Introduction

A worker dies of toxic exposure every 30 seconds worldwide, whereas a worker dies of workplace hazards every 15 seconds.-UN Report, Sep 2018

These numbers are alarming indeed. While chemical safety management has always been one of the top concerns of organizations to ensure employee safety and meet regulatory compliance, accidents with chemicals can occur at any time during production, storage, transportation, when in-use, or even disposal. Your organization and surrounding communities can be placed at great risk if chemicals are used unsafely or accidentally released in the environment.

Since the rapid outbreak of Covid 19, limitations and lack of visibility in the workplace have made managing chemical hazards significantly more difficult. While much of the world is still figuring out ways of dealing with the after-effects of the COVID-19 pandemic, organizations have already started to emphasize improvements in employee health, safety and well being. Their keen focus now is on integrating safety across all chemical processes. Companies are taking help from Environmental, Health & Safety(EHS) professionals to inspect and approve their facility standards and build awareness and caution among the workforce. In this capacity there will be a need for continuous communication, especially for add-on visibility of when the process is followed and not.

The recent Control & Prevention plan of the US Occupational Safety and Health Authority (OSHA) states:

Employers should adopt infection control strategies based on a thorough hazard assessment, using appropriate combinations of engineering and administrative controls, safe work practices, and personal protective equipment (PPE) to prevent worker exposures. Some OSHA standards that apply to preventing occupational exposure to SARS-CoV-2 also require employers to train workers on infection prevention elements, including the use of PPE.

To What Extent Are Chemicals Used in Workplace & Environment?

96%

or more of all manufacturing companies utilize chemical substances to develop their products.

Source: American Chemistry Council (ACC)

Whether it’s the construction industry, mobile device manufacturing, or even pharmaceuticals, there are very few industries and trades in the world that are absolved from chemical exposure. There have even been reports of chemical-related accidents in organizations where it was least expected.

In the US, 90% of all industrial materials and wastes generated from the following four industries:

  • Chemical Manufacturing
  • Primary Metal Production
  • Metal Fabrication
  • Petroleum Processing

Hazardous chemicals are found in most consumer products around us, ranging from household electronic appliances such as televisions, refrigerators, and personal computers to home goods such as furniture, carpets, cleaning supplies, and more. On the one hand, we use chemicals to purify our drinking water, increase crop production and simplify everyday household chores. In contrast to this, some chemicals pose severe hazards to human life and the environment if used or mishandled.

For example, the chemical Bisphenol A (BPA) is found in plastics that we use every day in our regular life and exposure, which is known to cause hormonal problems.

Figure: 1Your everyday things with hazardous chemicals

Hazardous Chemical & it's impact

Exposure and Handling of Hazardous Chemicals in the Workplace: Measuring the Impact

Prolonged exposure to chemicals and hazardous physical agents has been to cause multiple adverse health conditions. Cancer is one of the most commonly experienced results. Due to the inhalation of carcinogenic substances, lung cancer accounts for 86% of all premature deaths in the workplace. The yearly death toll of workers has crossed 2.8 million globally due to an unhealthy and unsafe work environment, according to the 2019 UN Report. A worker died of leukemia due to exposure to toxic substances daily. Another worker died of CO2 poisoning.

In 2019, OSHA cited a few events of chemical exposure as damaging to environmental health & safety

  • A pet food manufacturer in Florida exposed employees to corrosive chemicals for failing to provide PPE.
  • A Pennsylvania-based hair salon exposed its workers to formaldehyde due to inadequate precautionary measures. The resulting fine was upwards of $17,000 for not abiding by OSHA’s formaldehyde and hazard communication standards.
  • An Ohio-based musical instrument factory exposed its workers to toxic copper dust after attempting to use it on a greater scale than the recommended permissible level. Consequently, the company had to pay a hefty sum of $200,230 for severe safety and health violations.
  • A Texas indoor gun range exposed its workers to unsafe levels of lead at its facility. The employer was fined $214,387 for exceeding the permissible exposure limit, failure to decontaminate the surface and not replacing damaged PPE.

Chemical Safety Management in the Workplace Is a Responsibility, not a Choice

Dangers mentioned above and the growing list of regulations from agencies like OSHA and Reach are leading more and more companies to take preventive measures to identify and eliminate hazardous chemicals in the workplace, which pose a threat to your organization, employees, customers, and all other stakeholders involved.

Managing chemical footprint is not just an OSHA compliance but more a civic duty.

Why It’s Essential for Companies to Abide by Regulatory Compliance

Regulatory Compliance has become something that can’t be forgotten, with non-compliance attracting unwanted attention from regulatory agencies – often followed by large penalties as well as a threat to your business’s licenses.

Figure: 2 Regulatory compliance agencies

Regulatory Compliance Agencies Acts

We covered the penalties involved in a previous article, ‘How Managing Hazardous Chemical Information solves EHS Challenges’ ‘We have noticed that in 2017, the Occupational Safety and Health Administration (OSHA) increased the severity of penalties by 80% and imposed hefty fines ranging from $7,000 up to $12,000 for noncompliance to GHS through 2016-17. For serious violations, the penalties could be as high as $70,000 to $127,000.’

Figure: 3 OSHA penalties for non-compliance

OSHA Penalties

According to OSHA’s recent revision of chemical safety standards, each container of hazardous chemicals needs to be labeled with a set of standardized pictograms in alignment with the United Nations’ Globally Harmonized System of Classification and Labelling of Chemicals (GHS). The intention is to help workers identify the containers with hazardous chemicals rightly despite language barriers to avoid accidents.

Labels must also provide instructions on how to handle the chemical so that chemical users are informed about how to protect themselves. Specifically, labels must contain the following information: product identifier; signal word; hazard statement(s); precautionary statement(s); pictogram(s); and the name, address, and telephone number of the chemical manufacturer importer or other responsible parties.

Safety data sheets (SDS— formerly referred to as “material safety data sheets,” or MSDS) will require a new standardized look that will help workers anywhere quickly find and understand the information they need. The revised standard requires using a 16-section SDS format, which provides detailed information regarding the chemical. As with MSDS, OSHA requires that SDS be kept in work areas where chemicals are used and stored. Labels offer essential information for anyone who handles, uses, stores, and transports hazardous chemicals, but, of course, they are limited by design in the amount of information they can provide. SDS is a complete resource for details regarding hazardous chemicals.

Some of the things that organizations can do to avoid such fines and unwanted attention from regulatory agencies are relatively straightforward:

  • Chemical manufacturers need to ensure their products are correctly labeled according to GHS label requirements.
  • They should also strive to remain compliant with all other regulatory policies, industry standards, and government policies to ensure safety management.
  • Periodic testing should be performed to ensure that chemicals will not cause harm to public health, and if they do, they should be either re-formulated or correctly safety-labeled.

Figure: 4Reach compliance measures to control the environmental impact of chemical substances

Measures to Bring in Control the Environmental Impact of Chemical Substances

Registration, Evaluation, Authorization, and Chemicals (REACH) restriction came into effect on June 01, 2007, to regulate chemicals used in consumer products. REACH has the potential to regularize chemicals.

Under this new law, all chemical companies have to submit a Chemical Safety Report to REACH that includes information on their chemical substances and their effects on the environment, public health, and safety. Chemical companies must register all the new and existing chemicals marketed for commercial use and those exported or imported.

Figure: 5The significance of REACH in terms of numbers is highlighted as below:

REACH Highlights

The above image depicts the enormous benefits gained in return to REACH’s cost as per the BBC.

Streamlining Processes with Technology

In the current day, having the right technology in place can simplify everything we do. Thankfully, most of the issues we mentioned can be taken care of with integrated applications designed from the ground up to help chemical companies easily meet their regulatory obligations for compliance and safety.

What are some key functions that help Chemical Companies with compliance?

Chemical companies’ ideal functioning method is when seamless integration of SDS Chemical Management, Label Management, and DEA controls align with your operational ERP system’s transactions. You simplify the software landscape without additional applications or tools to author Safety Data Sheets (SDS) and print labels anymore.

Regulatory Compliance

  • The integrated software should help comply with regulatory standards and government policies such as OSHA, REACH, FDA, HIPAA, LCSA, DEA to reduce risks and improve safety.

Key Product Functions

  • Extensive SDS Management functionality, Label Management (incl. Private Labels) & DEA Management in one unique integrated application will give the necessary leverage to chemical companies and help function more efficiently.

Label Printing

  • An included Label Management function enables chemical companies to automatically print labels according to Globally Harmonized System (GHS) labeling standards. These labels can be embedded within the workflow of key operational transactions such as Production Orders, eliminating the need for manual intervention.

SDS Chemical Management

  • A full-function SDS Chemical Management & Authoring system helps chemical companies handle the GHS, OSHA, REACH, and Chemical Environment Safety. Companies can now maintain Safety Data Sheets (SDS) within the ERP system without integrating a 3rd-party application.
  • Companies would still be required to identify and validate chemical information with the appropriate agencies and ensure accurate information management within the system.
  • An integrated software application provides the technology, workflows, infrastructure to maintain chemical data and print safety data sheets.
  • The system should provide versioning, country and language packs and maintain different SDS templates in the system.

Validation

  • An ideal system will also include DEA Management features designed to perform validations in real-time, ensuring that the contacts, customers, and buyers are DEA-certified.

Ongoing these systems and proper labeling ensure chemical safety for the consumers and the companies handling these chemicals. Utilizing the right technology helps reduce input needed when generating labels and streamline the processes and ensure your organization remains compliant year after year.

Key Takeaways

  • Chemical companies must label chemicals in adherence with the regulatory standards related to storage, transportation, handling and disposal of hazardous materials and waste.
  • Business in this industry should be taking advantage of modern, powerful ERP systems to help manage chemical inventories with increased safety and efficiency.
  • Failure to follow these guidelines can lead to large fines and penalties, damage to an organization’s reputation, and in worst cases – injury and loss of life.

To learn more about ICM (Integrated Chemical Management), contact Xcelpros today.

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A Comprehensive Approach to Digital Transformation in the Chemical Industry
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A Comprehensive Approach to Digital Transformation in the Chemical Industry
A Comprehensive Approach to Digital Transformation in the Chemical Industry 700 500 Xcelpros Team

At a Glance

  • Chemical companies can unleash their business potential with end-to-end integration of digital technologies for manufacturing and distribution. Software for chemical industry has been met with enthusiasm as well as apprehension, given the multi-faceted and conventional nature of this sector.
  • Digitization of systems, processes, and functions comes with challenges and chemical companies need to implement solutions to navigate them through them. Newer innovations and implementation strategies are the need of the hour to ensure chemical companies thrive in the market.
  • End-to-end digitization for chemical companies will be a process filled with opportunities and hurdles. With a pre-planned blueprint, an organization can maximize the overall value from investment in digital technologies.

If one thing the ongoing Covid-19 pandemic has taught the world, it is the importance of being agile. The need for a digital transformation to cloud systems has gone up during the pandemic. Fast-growing companies rapidly transform into newer technologies that can help them grow. Your workforce may not be ready and may even resist the change. Leaders of rapidly growing companies set the right message that end-to-end digitization is the right step to set a company for success. Digital transformation will only help with day-to-day tactical work and despite the change management issues that need to be handled, changes in technology that drive progress are always best for an enterprise.

42%

of chemical company CEOs will prioritize digital operations and related technologies in the coming year.

Source: PWC, 23rd Annual Global CEO Survey

There is no denying that Chemistry 4.0 will undergo a digital evolution on the shop floor and other departments. End-to-end functions at a chemical company will improve by leveraging technology for collaboration, operation, and customer experience, all on a single platform. Here are some of the ways that digitization in chemical industry could help manufactures, researchers, distributors, and consumers:

  • An R&D lab will be more efficient with integration tools that facilitate automation, machine learning and data analytics. Researchers can synthesize molecules in a controlled environment and replicate the results with exact precision.
  • Manufacturers can scale up their production and optimize processes for enhanced efficiency and reduced operational costs.
  • With the help of the right Enterprise Resource Planning (ERP) platforms and Supply Chain Management (SCM), manufactures can automate various processes, get real-time updates about inventories and can effectively manage coordination between multiple stakeholders.
  • Digital innovations in the chemical industry can also help with better waste management and track environment health and safety data integrated into their ERP.

With the list of incentives being so persuasive, why are new technologies in the chemical industry met with apprehension? The answer lies in the conservative way of functioning within a chemical company coupled with varying safety regulations and guidelines worldwide. Let us have a look at some of the challenges in digital transformation within the chemical industry.

End-to-end Digitization: Challenges in the Chemical Industry

1.Where to begin?Many chemical companies struggle to strategize their digitization journey. Defining the companies’ goals and aligning them with the right technologies requires expert consulting and a clear vision from the C-suite executives. Often diving the digital transformation without a plan or the expertise leads to bottlenecks and unforeseen issues.

2.Upskilling of the Employees Newer technologies require training, practicing for error-free implementation and seamless operation. Upskilling employees from different functions to harness agility benefits from digital technologies can be a massive task for chemical companies. There are also issues related to training costs and addressing the behavioral resistance when it comes to change management.

3.Digitization in Silos Digitization in chemicals often happens in silos, given the multi-faceted, vast nature of a chemical manufacturing and distribution setup. However, when different functions or departments implement digital technologies without a centrally guided plan, the results will be different than what was expected from the technology. Multiple issues related to data discrepancies, systems incompatibility and process inefficiencies have been reported when the system is implemented without the right methodology.

So how should chemical industries look at end-to-end digitization? First of all, it’s important to remember that there’s no one-size-fits-all solution for every organization. Every chemical company needs to chalk out its roadmap when it comes to the adoption of digital technologies. However, certain industry best practices can help chemical companies make the journey towards digital transformation a smooth one.

Best Practices for Digitization:

1.Aligning Transformation Goals with Digital Technologies: Is your goal to improve your chemical manufacturing processes? Are you looking to digitize the entire supply chain? Is your focus more on customer relationship management? Answering these questions is an important step towards defining your goals to align them with the technologies. Organizations should also prioritize the goals to devise a phase-wise transformation plan for your chemical company.

2.Be Flexible and Dynamic: Any transformation comes with challenges that can potentially turn into dead-ends or cost-intensive pitfalls. During such scenarios, the digital transformation strategy needs to be flexible enough to pivot if required. This will leave room for accumulating changes without affecting the overall plan of digital transformation, the timeline and eventual outcome.

Figure: 1End-to-end Digital Transformation in Chemical Industry: Bird’s Eye View

End-to-end Digital Transformation in Chemical Industry

3.Get Experts Onboard: Any company wide change requires experts who are qualified to drive change. The same holds for end-to-end digital transformation in chemical manufacturing. Getting expert consultants onboard will make the transformation process smooth and open doors to newer possibilities.

4.Be prepared for issues: Many digitally mature companies understand the issues that need to be reviewed and fixed when a new system is implemented. It is essential to keep track of issues as they occur due to data and process inefficiencies. Anticipating the risks through a risk analysis and a mitigation plan will help companies reduce the pain of post-go-live issues.

5.Go for a Phased Implementation Plan: Even though the eventual goal is end-to-end digital transformation, chemical companies should opt for a phased implementation plan. This helps in detailed planning for every phase and also prevents the process from becoming too overwhelming.

Business Scenario

Mitsubishi Chemical Holdings has expanded efforts to use measured data to operate its plants. The company has developed and is now using Real-time DB, a remote monitoring system across its chemical plants. “By using this system, Mitsubishi Chemical can analyze operating conditions when there are technical problems and also improve day-to-day plant operations,” says Masanori Karatsu, senior managing corporate executive officer at Mitsubishi Chemical Holdings. The company is evaluating digital technologies and IIOT in other areas, including working with customers on product and new businesses development.

Such a centrally planned and phased approach has been adopted across many chemical companies.

To sum it up, end-to-end digital transformation in a chemical company would require planning and an execution strategy. Despite short-term disruptions, this change would bolster the manufacturing processes and enhance profitability in the long run.

Key Takeaways

  • Chemical companies have fierce market competition and digital technology for chemical companies can eliminate process and data inefficiencies that ultimately lead to better customer retention and stay ahead of competitors.
  • A planned, phase-wise approach would help chemical companies get the most for their buck when going agile. Users need to be change agents instead of being change averse.

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chemical warehouse management
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Warehouse Management in a Chemical company: Challenges & Solutions
Warehouse Management in a Chemical company: Challenges & Solutions 700 500 Xcelpros Team

Introduction

  1. 1.Storage requirements in a chemical company are complicated. As far as hazardous chemicals are concerned, the need for caution and adherence to safety guidelines is a must. Manufacturers need to optimize their warehouse operations to maintain plant profitability while providing competitive pricing in the face of outpouring competition.
  2. 2.A sound chemical warehouse management system ensures that everything in the industry runs in the most optimal way possible. The usual warehouse activities may include arranging the inventory, managing new material stock, running and maintaining appropriate equipment, shipping orders, tracking and improving overall warehouse performance, etc.
  3. 3.Optimizing Warehouse Management processes is higher on the list of priorities within a chemical company involving planning, organizing, directing, and controlling resources.

Below are a few challenges distinct to the chemical industry and reasons manufacturers must address them proactively.

Labeling Hazardous Products for Inventory and Shipments:

The Hazard Communication Standard (HCS 2012), per OSHA), requires chemical manufacturers to classify produced or procured chemicals hazardous data. They must also inform employees about the chemicals their exposure through a hazard manual, product labels with chemical hazard information, safety data sheets, and workforce training. Maintaining chemical information and printing Product Labels ensures compliance with HCS 2012. The regulations give importance to the consistency and content of chemical labels. Product Labels are standardized and must include these six elements:

Figure: 1Chemical Label in Microsoft Dynamics Finance and Operations with Key Elements

Chemical Label in Microsoft Dynamics Finance and Operations with Key Elements

  1. 1.Signal Word – Indicates a hazard, such as “Warning”/”Danger.”
  2. 2.Pictograms – To identify hazardous products, grouped by health risk, chemical risk, and environmental risk. Given below is an example.
  3. 3.Manufacturer’s details: Identifies the manufacturer’s company name, address, and telephone number.
  4. 4.First aid and precautionary statements: Describes preventive, response, storage, and disposal precautions.
  5. 5.Hazard statements: Describes the nature of hazardous products and the degree of hazard.
  6. 6.Product name: Identifies the chemical name.

Warehouse Inventory Accuracy

Inventory has to be labeled correctly and stored appropriately in the right locations according to directives. Inventory inaccuracies can occur due to several reasons. Not having real-time inventory counts, inability to track inventory in the different locations, moving inventory without recording the transfer. Most of these issues are attributed to time, breakdown in process or non-compliance to process and insufficient training on the chemical inventory management system. When workers face these types of problems, they usually bypass it in favor of the interest of time. More than often, these flaws can accumulate, leaving behind inaccurate data in the chemical inventory tracking system.

Figure: 2Inventory Tracking in a Warehouse

Inventory Tracking in a Warehouse

Revisit your warehouse management strategy

There are various solutions to mitigate the above problems. Let us discuss a few:

  • Every warehouse personnel starting from manager to workers must adequately train to resolve different types of errors.
  • Build a healthy work-knowledge environment about the entire system to assist each other with information, accordingly, whenever any issues turn up.
  • Reliable technologies like cloud management software and machine learning applications can produce higher accuracy and transparency to the entire warehouse operation.
  • Chemical warehouse optimization is possible by human resource management solutions, material management solutions, and monitoring key performance metrics to track the warehouse’s overall efficiency. Order picking accuracy, warehouse capacity, on-time shipment to customers, etc. are a few such measures that will improve overall warehouse productivity.
  • The use of technologies such as mobile devices embedded into the ERP to streamline operations. Mobility in Supply Chain Management is imperative since it leads to cost reduction, escalates productivity, and better improves operational efficiency.

The Role of Picking Optimization within the Chemical Warehouse

Picking is a critical process within a warehouse, and if not optimized, can turn chaotic – particularly with a large volume of warehouse transactions. A majority of chemical warehouse management issues occur while picking an item. The problem is often a result of ‘receiving’ or ‘put-away’ tasks. Despite radiofrequency and voice-directed systems becoming widespread, some operations continue to rely on manual-driven systems. A critical piece of the overall management is to ensure full compliance with you ERP system, even when situations arise that make compliance seem unreasonable. Exceptions such as offering an approved substitute item or finding an incorrect product in a location must have a record to allow a complete and precise account of the inventory.

Numerous errors can manifest during picking. These include viewing the physically available on-hand quantity of an item and reserving inventory on previously confirmed backorders—the delta then shows an available amount after allocating material to existing orders. Additionally, picking operations can easily deceive a planner who is viewing inventory. A well-functioning warehouse management system should detect – allocated, picked, and shipped stock to avoid overbooking for quantity to multiple orders. If an inventory count leads to inaccuracies, sufficient inventory adjustments through mobile devices can dissipate inventory errors. Chemical corporations prefer proactive planning to avoid mistakes in reporting on-hand inventory; however, they’re more often trying to rush operations to fulfill demand and ship goods out the door ‘on time and in full’. The tasks planned daily sometimes compromise the GMP (Good Manufacturing practices) to meet the customer’s dynamic demands. Diligent scrutiny of inventory record tracking can support more reliability and inventory accuracy.

Recall Management

In case of a product recall, a chemical company needs to trace back every shipped batch and be able to quickly retrieve all customer details who received the specific product batch. To unfold the product’s traceability, a chemical plant must function on a system that keeps track of all the process operations, raw material order batches, product-related data, and supplier-customer related data. Transaction details at a granular level effectively handle tracking inventory history from purchase/production to specific shipments. A well designed Supply Chain Management (SCM) will keep track of inventory aging with the ability to drill into details. All the essential data enables the system to trace products during different processes: manufacturing, in staging, on-hand, products in transit, products in shipping locations, and under quarantine. The traceability must also act as a tool to identify suppliers of defective materials so that the entire supply chain runs safe and sound. If needed, making decisions to switch suppliers is recommended by the system when inventory defects from a specific supplier are consistently surfacing throughout the product life cycle.

Role of Technology

An ideal information system for running a warehouse in a chemical plant must manage the inventory and address supply chain visibility to respond quickly to an emergency. The system includes handling counteractions, compliance issues, audits by date, reviews by the person responsible, associated yields, and documents required by specific regulatory bodies such as OSHA.

Ultimately, an ethical business practice is necessary for sustainable and constructive growth. An efficient warehouse management system (WMS), an intelligent set of operational strategies, and a system to drive user behavior can hugely profit a chemical company.

Figure: 3Microsoft Dynamics 365 Finance and Operations with embedded chemical information system

Microsoft Dynamics 365 Finance and Operations with embedded chemical information system

Key Takeaways

  • Warehouse management needs a process that is consistent, quick to learn and easy to follow. The process will aid towards overall performance improvement.
  • In a short span, major industries have been through several technological transformations such as barcoding, Radio Frequency Identification (RDFI), Enterprise Resource Planning (ERP), etc. Applying all these technologies contributes to a real-time surge in authenticity, acceleration of general warehouse operations, and faster conveyance with other supply chain partners.
  • All growth-oriented chemical companies in the market leverage a common platform to manage their end-to-end operations. Comprehensive planning and an excellent supplier-retailer relationship can help avoid unpredictability and other inventory risks involved. The objective is to create opportunities for supply chain surplus and gross value addition for end customers that ultimately contribute to its success.

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How Managing Hazardous Chemical Information Solves EHS Challenges
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How Managing Hazardous Chemical Information solves the EHS Challenges
How Managing Hazardous Chemical Information solves the EHS Challenges 700 500 Xcelpros Team

At a Glance

  • Hazardous Chemicals have harmful effects on the environment and people, and it becomes the company’s responsibility to manage the hazards appropriately.
  • With strong risk assessment in place, adhering to best practices, and complying with regulatory norms, companies can potentially reduce the chemical hazards.
  • An information system that holds chemical data helps companies comply with regulatory standards such as OSHA, GHS, etc., to reduce risk and improve safety standards.
  • Safety Data Sheets and Label management systems help chemical companies manage hazard information and safely label hazardous chemicals.

Hazardous Chemicals Are Everywhere

Chemicals are found everywhere around us in almost every consumer product, from household electronic appliances such as televisions, refrigerators, and personal computers to home goods like furniture, carpets, cleaning supplies, and more. We use chemicals to purify our drinking water, increase crop production and simplify everyday household chores.

As beneficial as chemicals are, many chemicals are hazardous and need to be managed safely or can pose a serious threat to human life and the environment. Very few industries and trades in the world are absolved from chemical exposure. Accidents with chemicals can occur during production, storage, transportation use, or even disposal. Your organization and our community are at risk if chemicals are used unsafely or released into the environment where we live, work and play. Hazardous chemicals can lead to serious injury, long-lasting health effects, property damage and, in worse cases, death.

A report from the American Chemistry Council (ACC) stated that more than 96% of all manufacturing companies utilize chemical substances to develop their products.

There are reports of chemical-related accidents in organizations where it was least expected, such as the food industry.

  • Per a 2014 ABC News report a restaurant in Utah, where a woman mistakenly served a tea tainted with Lye. An employee mistook an unlabeled powdered degreaser – containing sodium hydroxide, or lye – for sugar. This degreaser was then accidentally mixed into a cup of tea, causing extreme burns to the customer’s throat and mouth. This led to expensive penalties, lawsuits, and medical bills, as well as severe damage to the business’s reputation.
  • Another such incident occurred when customers of a significant ice-cream chain were accidentally served vanilla shakes tainted with a hazardous cleaning chemical. This happened when an employee unknowingly used what was thought to be a clean mixing container. The container contained traces of a degreaser which had not been adequately cleaned, leading to extreme burns to the customer’s throats and mouths. Again, this led to expensive penalties, lawsuits, medical bills and severe damage to the business’s reputation.

Both incidents above could have been avoided with proper labeling and handling practices in place.

Figure: 1Some points to consider when you are a chemical company

Some points to consider when you are a chemical company

The impact that improper handling of hazardous chemicals have on your company can be severe – causing irreparable damage to your reputation, large penalties, being shut down, or worse, endangering human life. It is these dangers and the growing list of hazardous chemical regulations from agencies like OSHA, GHS, etc. that are driving companies to take corrective measures in identifying and eliminating these hazardous chemicals, which pose a threat to your organization, employees, customers and all other stakeholders involved.

Eliminating hazardous chemicals from common and business use is a significant challenge, and it cannot happen overnight.

  • In 2014, Adidas declared plans to eliminate the utilization of long-chain perfluorinated compounds (PFCs), a chemical type known to cause asthma and osteoarthritis in children and women. Once developed, this took two years to implement successfully.
  • In 2014, the national superstore chain Walmart initiated a policy in which it became mandatory for suppliers to phase out certain hazardous chemicals found in cosmetics, household cleaners etc. This was not a fast transition. They wouldn’t even begin to report publicly on the progress until 2016.
  • Apple eliminated using two particularly toxic chemicals, benzene and n-hexane, from its manufacturing assembly process when pressured during a campaign by Green America and China Labor Watch (CLW). The company ordered detailed testing of substances at the ingredient level to ensure the two toxins are rooted out from the facilities, as reported by Global Manufacturing.

These examples highlight one aspect of the challenges involved in successfully removing hazardous chemicals from your organization. It may not even be possible. So, if eliminating hazardous chemicals is not possible, they should be managed better to minimize or prevent chemical-related accidents.

Managing chemical footprint is not just an OSHA compliance but more a civic duty

On August 6, 2014, in a leading copper-producing company suffered a tank leakage of of copper sulphate acid contaminating two rivers and turning them orange and extremely toxic leaving more than 24,000 people to survive without water.

As a consequence, the company had to bear huge penalties and clean-up costs as well as criminal charges filed by the Mexican Government.

In recent times, this incident was a wake-up call for companies regarding the global concern chemicals have on employees, public and environmental health & safety. It also was one of the driving forces behind more stringent legislation on the use of chemicals.

Best Practices & Ways to remain compliant

Regulatory Compliance is something that cannot be forgotten, as non-compliance attracts unwanted attention from regulatory agencies – often followed by large penalties as well as a threat to your business’s licenses.

In the US in 2017, the Occupational Safety and Health Administration (OSHA) increased the severity of penalties by 80% and imposed heavy fines ranging from $7,000 up to $12,000 for noncompliance to GHS through 2016-17. For serious violations, the penalties could be as high as $70,000 to $127,000.

Organizations can avoid such fines, unwanted attention from regulatory agencies, and better manage the use of hazardous chemicals to remain compliant are as follows:

  • Adhering to regulatory norms and best practices – conducting risk assessments & safety audits for environmental hazards – offering ongoing safety training, reduces humans’ exposure to hazardous chemicals.
  • Companies should comply with the global rules, standards, policies and procedures for environmental, health and chemical safety in the workplace. They need to operate environmentally safe facilities and manufacture safe products.
  • Smart SDS Management and Labeling applications are designed with managing the impact of hazardous chemicals. This helps your organization’s compliance with hazardous chemical regulations defined by agencies like OSHA, REACH, GHS, FDA, etc.
  • Chemical manufacturers need to ensure their products are correctly labeled according to GHS standards.
  • They should also strive to remain compliant with all other regulatory policies, industry standards, and government policies to ensure safety management.
  • Periodic testing should be performed to ensure that chemicals will not cause harm public health, and if they do, they should be either re-formulated or correctly labeled.

Integrated Technology to manage chemical data

Having the right technology in place can simplify everything we do. Thankfully, most of the issues we mentioned can be taken care of with the help of applications that house chemical information designed to efficiently help chemical companies meet regulatory obligations for compliance and safety.

Figure: 2The GHS process for companies carrying harmful chemicals

The GHS process for companies carrying harmful chemicals

What is a Chemical Management system and how does it help Chemical Companies with compliance?

A Chemical Management system – integrated within an ERP like Microsoft Dynamics 365 platform – helps chemical companies with their SDS Management, Label Management and DEA controls in-line with transactions within the operational ERP system. An ideal solution can help with the following:

Regulatory Compliance

  • Helps chemical companies comply with regulatory standards and government policies such as OSHA, REACH, FDA, HIPAA, LCSA, DEA to reduce risks and improve safety.

Key Product Functions

  • Offers SDS Management, Label Management (incl. Private Labels) & DEA Management in one application.

Label Printing

  • An included Label Management function enables chemical companies to automatically print OSHA chemical labels according to the Globally Harmonized System (GHS) labeling standards. These labels can be embedded within the workflow of key operational transactions such as Production Orders, eliminating the need for manual intervention.

SDS Management

  • A SDS Management & Authoring system allows companies to maintain Safety Data Sheets (SDS).
  • Infrastructure to maintain all 16 sections of the safety data sheet – by country, language, major and minor versions.
  • Note that while an application provides the technology, workflows, and infrastructure to maintain chemical data and information, it is essential to verify the information and approve the information before generating the safety data sheet.

Key Takeaways

  • Chemical companies must accurately label chemicals in adherence to regulatory standards related to the storage, transportation, handling and disposal of hazardous materials and waste.
  • Ongoing training and proper labeling ensure chemical health and safety for the consumers and the companies handling hazardous chemicals.
  • Utilizing the right technology reduces input needed when generating labels and helps streamline the processes to ensure your organization remains compliant year after year.

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Managing Challenges in the Chemical Industry
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Three Ways to Manage Disruption in the Chemical Industry
Three Ways to Manage Disruption in the Chemical Industry 700 500 Xcelpros Team

At a Glance

  • The chemical industry has been at the forefront when it comes to dealing with disruptions as it serves a diverse range of sectors and constitutes of different attributes (such as raw materials, quality issues, geographical/ regional safety rules, financial instabilities, so forth.).
  • Currently, the impact of Covid-19 on chemical industry can be seen across the globe- disrupted supply chains, demand discrepancies, halted travel and fluctuation in petroleum prices have compelled manufacturers to deal with various chemical industry issues all at once.
  • Digitization has disrupted the chemical industry even before the pandemic started and the combined effect has been both challenging and a blessing in disguise for the chemical manufacturers.
  • Through the right tools and systems, the chemical companies can pave their path in the era of digitization and transform for a better future.

The challenges in chemical industry have been varying in nature as the industry relies on a large variety of stakeholders and is an asset-intensive sector. The past few years have been all the more challenging in chemical industry management because of the onset of Industry 4.0 and ensuing changes in IT infrastructure. However, the digitization effect also came as an opportunity for chemical manufacturing and distribution companies to leverage latest technologies to reduce time to market, optimize processes and manage supply chain challenges in the chemical industry with enhanced efficiency.

According to a 2020 survey by PwC, 42% of chemical company CEOs said they would be investing in digital operations and related technologies in the coming 12 months.

To remain on top of the digital game, companies must understand and approach chemical industry issues fully equipped with advanced technologies and comprehensive strategy. Let us have a look at some of the significant challenges in the chemical industry:

1.Managing Data in the Time of Information Abundance:One of the significant challenges of digitization in the chemical industry is an overflow of data in the sector. Top floor decision-makers are looking for ways to store, analyze and generate insights from the abundant information flow. Data analytics remains a tricky area for many chemical manufacturers. Legacy systems are still part of many manufacturers’ IT infrastructure and there are discrepancies in information flow management because different functions work in silos.

2.Overcoming the Unpredictable Nature of the Market:Market fluctuation is another major cause of chemical industry disruption. The ever-changing commodity prices put manufacturers in a sticky spot in terms of finances. Also, the impact of the covid-19 pandemic was felt in the form of demand pattern changes – there has been heavy demand globally for sanitization and hygiene products. Such fluctuations are hard to forecast, and most chemical industry management struggles to keep up with these changes.

3.The Need to Go Agile:The world is moving fast, and the manufacturing industry is looking to catch up. Chemical companies are primarily looking for ways to go agile for better delivery patterns, improved change management and measurable productivity. However, companies face different challenges when going agile such as financial constraints, resource skill management, and resistance from employees.

While the challenges are aplenty, there are ways to overcome chemical company issues. Let us have a look at how companies can manage the disruption in the chemical industry.

1.Investing in Fortifying IT Infrastructure:Chemical companies need to turn to technology as-required but a long-term roadmap is required that justifies the investment. By investing in high-end tools and systems, chemical manufacturers can ensure that their processes are automated, the data is collated and leveraged to generate insights for better business decisions, and the operations are optimized. Going for comprehensive enterprise resource planning (ERP) tools with embedded BI tools can transform how chemical companies approach their operational requirement.
BASF, the global leader in chemical manufacturing, made use of the Microsoft 365 to improve the transparency and efficiency of virtual teamwork within our global family. This choice was a direct result of the company’s move towards agility.

2.Supply Chain Optimization:Another area where chemical companies can turn a corner and embrace the ongoing changes is to optimize their supply chain. Bettering stakeholder communication, facilitating real-time inventory monitoring, and avoiding stock-outs or bottlenecks by proper warehouse management are some of the steps that manufacturers need to take for a well-functioning supply chain.

Figure 1:Areas getting benefitted with ERP in chemical manufacturing

Areas getting benefitted with ERP in chemical manufacturing

3.Prioritizing Innovation:The highly disruptive digital landscape will multiply the challenges in the chemical industry. However, organizations can resolve these challenges by encouraging innovation. Chemical companies should invest in better market research, newer and more efficient production processes, and out-of-the-box customer response management initiatives. These would enhance overall productivity and also help companies in cementing their position in the volatile market.

In conclusion, disruptions are excellent catalysts to improve processes within a chemical company. Businesses can equip themselves with the latest technologies on a path to digitization.

Key Takeaways:

  • Chemical companies need to look at disruptions as opportunities to overcome challenging times.
  • Latest technologies play an imperative role in chemical manufacturing and aftermarket services as well.

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GHS compliance guide for chemical industry
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Managing GHS compliance in a chemical company
Managing GHS compliance in a chemical company 700 500 Xcelpros Team

At a Glance

  • The Globally Harmonized System of Classification and Labeling of Chemicals (GHS) offers a blueprint for handling hazard information through labels and safety data sheets.
  • OSHA raised its penalties related to occupational hazards almost by 1.8% on 15th January 2020. Any violation of the recognized safety standards would cost a chemical manufacturer a whopping fine ranging from $9,639 to $134,937.
  • GHS compliance effectively minimizes labor costs owing to fewer accidents and health problems.

For any drug or chemical manufacturing company, GHS compliance guide rests on four central pillars: Hazard classification, Chemical Labels, Safety Data Sheets and Employee Training. For chemical companies across the globe, it’s an ongoing challenge to remain compliant with GHS standards in the face of ever-changing regulations. For just about any chemical manufacturer, the task of collating and reporting on every available data point through safety data sheets and chemical labels can be almost impossible. This necessitates the need to adopt chemical industry-specific software solutions that help generate and manage safety data sheets and labels according to GHS guidelines. These software solutions enable companies to:

  • Create a safer work environment for all employees across multiple manufacturing units.
  • Automate critical chemical management processes like GHS labeling and generating Safety Data Sheets.
  • Boost process efficiency and reduce fines incurred from breaches in compliance.
  • Leverage employee training mechanisms, expert resources and applications that focus on the handling and disposal of hazardous chemicals.
  • Converge multiple operational functions in a single dashboard for smart analysis.
  • Conduct training programs on employee safety.
  • Build credibility and brand recognition in the market.

Figure 1:Key Operational Principles of a Chemical Management System

Key Operational Principles of a Chemical Management System

The image above makes it very clear that for GHS compliance, the two most critical working processes in a chemical management system include GHS Labeling and Safety Data Sheets. Let’s focus on how a Chemical Management ERP system lends itself to GHS labeling and SDS chemical management automation.

Chemical Labeling and GHS

Chemical labeling is all about conveying critical hazard information related to a particular chemical at a rudimentary level. Six key elements make up the chemical labels, including.

  1. 1.The Signal Word
  2. 2.GHS Symbols or Hazard Pictograms
  3. 3.Manufacturer Information
  4. 4.Precautionary Statements
  5. 5.Hazard Statements, and
  6. 6.Identifiers

Figure 2:GHS Compliant Chemical Label

GHS Compliant Chemical Label

With regulations constantly changing, chemical manufacturers are persistently working towards adopting technologies that seamlessly work with their existing systems to deliver process efficiency and compliance at the same time. Before understanding how the chemical industry has worked towards mitigating challenges, it’s important to understand the most harrowing challenges plaguing the labeling process of the chemical industry, including

  • Identifying relevant, compliant data to be put on container labels.
  • Finding labels that are durable and can withstand the impacts of harsh chemicals.
  • Finding the correct size for GHS labels for containers of different size.

When it comes to chemical management, labeling is one of the most critical tasks. It’s only through proper labeling that companies can track chemicals from manufacturing to delivery. Most chemical industry software solutions based on the ERP framework deliver the following solutions to the problems mentioned above, including.

  • An infrastructure to house hazard information such as pictograms, hazard statements, provisions for inserting supplier information, etc.
  • Provision for customization of GHS chemical labels for different sizes used on various containers.

These benefits are very tangible and apparent, but technical intervention in labeling can be much greater, encompassing the entire business.

Business Benefits of GHS Labeling

  • Boost Supply Chain
    • Track chemicals with all the requisite details.
    • Minimize re-labeling, incorrect shipments, inventory problems.
  • Change Management
    • Implement change real time.
    • offer standard templates and system for change Management.
  • Cost Efficiency
    • Minimize shipping delays, unnecessary operational steps.
    • Error proofing and data management.
  • Compliance
    • Integrate third parties in labelling systems.
    • Minimize manual shipments.
  • Process Efficiency
    • Integrate marketing and branding information.
    • Manage multiple languages, color printing, regulatory standards.
  • Business Expansion
    • Retrieve data from multiple systems.
    • Minimize duplication for a single product.

OSHA has raised its penalties related to occupational hazards almost by 1.8% at the start of 2020. Any violations of these recognized safety standards would cost a chemical manufacturer any number of fines ranging from $9,639 to $134,937.

It’s not just GHS labeling requirements, but complete SDS chemical management solutions that would best help chemical manufacturers minimize their chances for huge financial penalties, driving process efficiency along with compliance at the same time.

Safety Data Sheets and GHS

Safety Data Sheets (SDS) are used to capture all hazardous chemicals’ information. SDS is not only the first point of hazard information collection and reporting. The safety data sheet form the basis of GHS labeling. With the business ecosystem becoming extraordinarily dynamic and constantly changing, becoming more stringent, there can be absolutely no room for error in safety data sheets. Chemical companies opt for SDS authoring and generation software that work in tandem with their existing ERP system. These SDS tools bring a lot to the table for these organizations, including:

  • Real-time safety data sheet updating features
  • Seamless integration with existing ERP systems
  • Automatic generation of SDS sheets
  • Storage capacity for individual product data
  • Applications to update multiple sheets at the same time
  • Options for multiple language translations
  • Ability to create standardized data for every chemical formulation
  • Repository for multiple GHS versions, Canadian WHMIS, and OSHA Hazcom

Integrated Chemical Management (iCM) is a solution designed to offer both GHS labeling and SDS chemical management services simultaneously. This solution pairs with Microsoft’s Dynamic 365 ERP to deliver:

  • Real-time SDS authoring and label creation at the same time in compliance with GHS.
  • Deliver process automation and operational efficiency.
  • Minimize the cost of customization and third-party integration cost.
  • Minimize the time and resources required to manage data sheets and labels.

Key Takeaways:

  • Managing multiple third parties for SDS management and GHS labeling can be a challenge. Implementing a powerful, integrated solution that does both can make a huge impact on efficiency and performance.
  • Process and compliance in a chemical company go hand in hand, and the more the integration is facilitated, the better it is for optimizing operations within the plant.
  • Being Agile through integrated technologies is a crucial need in chemical manufacturing and the ability to respond quickly to changes in compliance makes a chemical company potent as a business.

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References:  GHS Label Compliance

challenges-in-the-chemical-industry-due-to-covid-19-and-the-future-ahead
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6 Challenges in the chemical industry due to COVID-19 and the future ahead
6 Challenges in the chemical industry due to COVID-19 and the future ahead 700 500 Xcelpros Team

At a Glance

  • As the world braces itself from COVID-19 recovery, decision-makers at significant chemical companies are looking for ways to realign their operational and manufacturing strategies to be able to sustain and grow.
  • Liquidity and capital resources impact the business, causing financial pain areas for the chemical industry.
  • The industry has also faced challenges due to disrupted global supply chains, labor shortage, dwindling demands for one industry and growing demands for others, and many more issues.
  • With the strategic overhaul, reinvention of smart factories, investment in automation, and other robust enterprise software, the chemical industry can turn the tide.

Like almost every other industry, the chemical industry encountered unplanned hassles in 2020 due to the Coronavirus global pandemic. Practically every department in chemical companies has experienced the ripple effects of a market slowdown. Things are still uncertain in terms of the supply chain’s stability, workforce capacity, changes in global trade regulations, etc.

Approximately 41% in the chemical industry are concerned about the effects of Covid-19 on workforce and reduction in production.
Approximately 23% are looking at disrupted supplies are a red flag.– Per a survey by PricewaterhouseCoopers

While global supply chain disruption has impacted businesses, the chemical industry can take advantage of certain factors like:

  • Increased demand for raw material required for hygiene products and sanitizers across the globe.
  • The drop in oil prices offering a chance to acquire oil-based raw material at a lower cost.
  • Dependence of many major and minor sectors on the raw material provided by the chemical industry.

There are also various strategic and operational changes that the decision-makers at chemical companies will need to help their companies sail through this crisis with minimal damage. The chemical industry also needs to prepare itself for the post-COVID era. However, before we get into plausible solutions, it is imperative to understand the challenges in chemical industry. Let us look at six major challenges that the chemical industry is dealing with due to the coronavirus crisis.

1.Liquidity and Investor IssuesThere was a sudden and steep decline in financial outcome in the first quarter of 2020 due to COVID-19. The market slowdown led to investment shortage, lower credit, etc. The financial impact has caused significant distress for the chemical industry, and top-level executives rethink their finance allocation policies to ride through these distressing times.

2.Shortage of Workforce and Reduced Production RateMany regions are still not back to normal and need to follow social distancing norms to avoid the coronavirus spread. The additional rules in place limit the ability of chemical production facilities to work at full capacity. Even the workforce that does not operate on the shop floor has to either work from home or stay absent. Current issues in the chemical industry lead to reduced productivity and lesser output from the production plants.

3.The Issue of Disrupted Supply ChainsWith the slowdown of all travel types (especially international air travel), there have been significant supply chain challenges in the chemical industry across the globe. The chemical industry is heavily dependent on different stakeholders working in harmony for seamless functioning. Businesses have taken a massive hit, and there are issues related to delays in obtaining raw material, delays in shipments, blocked consignments, and more.

Figure 1:Benefits of a Connected Ecosystem for Inventory Management

Benefits of a Connected Ecosystem for Inventory Management

4.Discrepancies in the Demand of Raw MaterialChemical companies supply different raw materials to various industries, and they make arrangements for these stocks based on their orders, estimates, and market scenario. However, the lockdowns imposed due to the coronavirus pandemic caused many industries like automobile and consumer goods to cease their production. In contrast, other industries like hygiene goods, pharmaceuticals, and medical equipment manufacturing sectors had to ramp up their production capacity. An imbalance in the market caused discrepancies in the demand for raw materials, and the chemical companies have to realign their inventories to suit the changing needs. The market is recovering however still carries the effects of the pandemic.

5.Facilitating Social Distancing at SitesWorkers who are back to facilities require retooling to expedite work and play catch-up on customer orders that were previously halted. Many chemical companies have made drastic changes to their plants to provide a safe atmosphere for their workforce. This atmosphere involves regular sanitization of the premises, facilitation of social distancing, temperature checks of the staff, interatcion and collaboration through digital tools, etc.

6.Changes in Strategy for the Post-pandemic EraThe strategists and top executives at chemical companies have a robust and demanding job at their hands to realign their game plan for the post-pandemic era. Replanning involves gauging the market’s pulse at a granular level, understanding the varying needs for different chemical compounds, and providing investors and business partners with the plan’s visibility. Higher visibility drives the requirement to onboard agile analytical tools in conjunction with their manufacturing execution and warehouse management systems.

While there are many challenges in the chemical industry, they can get these issues addressed with comprehensive, all-inclusive technology. Companies need to evaluate a business solution that provides end-to-end Supply Chain Management, Financial Management functions plus embedded analytics to realign their processes and gain in depth visibility of the operations.

2020 has seen a massive shift in the overall functioning of chemical companies, which has enabled the need for proper planning, extensive use of robust integrated tools, and timely actions. By retooling to make themselves more agile, chemical companies can ride this storm out and progress forward. Ability to adapt to rapid changes in business is now one of the major OKRs within a Chemical company. Enterprises that wish to differentiate themselves in the Chemical industry need to transform from traditional to becoming new-age companies.

Key Takeaways

  • The chemical industry needs to be agile and flexible to gauge the changing needs and serve their best during these trying times.
  • The right digital tools help chemical companies to not just strategize but also effectively execute to grow.

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Managing Operations in The Chemical Industry by Streamlining Processes
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Managing Operations in the chemical industry by Streamlining Processes
Managing Operations in the chemical industry by Streamlining Processes 700 500 Xcelpros Team

At a Glance

  • Industry 4.0 has brought transformational changes in the chemical industry’s operations and the chemical companies understand the power of going digital to streamline their operation.
  • As with any new process change, operational management changes include upgrading skills, fortifying the IT infrastructure and resource allocation.
  • Today, chemical companies are facing specific challenges in streamlining their operations to enhance productivity. Decision-makers must go to the root of these problems to address them strategically.
  • Industry experts believe that strengthening the IT infrastructure is the first and most crucial step towards overcoming operational management challenges in the chemical industry.

The chemical industry is witnessing challenges related to transformation in business functions and streamlining operations. After all, in a hyper-connected, fast-paced world, trimming unnecessary processes and optimizing the resources must enhance operational output. A chemical company functions with numerous stakeholders to drive operations who require visibility and transparency. Chemical companies need to migrate from legacy platforms to newer, highly advanced software tools to boost productivity in a plant. The change calls for strategic reshuffling, process reengineering, and an operational blueprint for running business in a cost-effective manner. Business transformation brings specific pressing issues that chemical companies need to address while maintaining a steady state in operations.

There is a potential for a three- to five-percentage-point improvement in return on sales from employing digital in production operations. Source: Mckinsey & Company

1.Legacy Platforms: Advancements in operations and trimming the processes require the adoption of newer technologies such as automation, data analytics, and machine learning. These technological overhauls require moving from legacy platforms to robust, high-tech tools and software. Chemical companies often find themselves in a struggle to make this move successfully, without disrupting their ongoing operations. There are also cost-related concerns that the top executives need to take into consideration.

2.Shortage of Skilled Personnel: Chemical companies operate with subject matter experts at both shop floor and top floor. These people are the ones who are well-versed in their field of sciences and are accustomed to following a particular operational blueprint. However, to streamline operations, there is a need for technologically adept personnel who can take up the responsibility of both chemical process management through newer tools and the nitty-gritty of chemical manufacturing processes (and related tasks). The chemical industry is currently facing a crunch of skilled personnel, affecting the digitization process for effective streamlining.

Figure 1:Why Chemical Companies Need to Opt for Streamlining of Operations

Why Chemical Companies Need to Opt for Streamlining of Operations

3.Inventory Management: Chemical companies often rely on spreadsheets and software built in-house to manage their inventories. Inventory inefficiencies are due to manual intervention, working in silos and not keeping a real-time track of inventory. However, to combat inventory issues, moving the chemical inventory management process to an automated platform often causes chaos and mishandling due to poor inventory data from legacy systems. The post-transformation hurdles make chemical companies wary and thus create a temporary glitch in the simplification of operations.

4.End-to-end Process Changes: The production and after-market cycle for any chemical product or the raw material is both intricate and one with many side-branches. To potently streamline the entire operational cycle, the chemical companies will need to change all their processes. The business transformation would include resource management, commodity acquisition, billing cycles, pricing strategies, report generation, and many essential activities. These changes can be daunting, time-consuming and expensive, making it a massive challenge for chemical companies in their path towards streamlined operations.

How Can Chemical Companies Effectively Address the Challenges in Streamlining Operations?

If you are the decision-maker in a chemical company who is looking for cost-effective solutions for operational streamlining, you would most probably look for:

Figure 2: Primary Intents of Operational Streamlining

Primary Intents of Operational Streamlining

Chemical Companies can achieve these objectives with a single-point tool such as the Microsoft Dynamics 365 ERP and SCM (Enterprise Resource Planning and Supply Chain Management). You can effectively incorporate process automation, process realignment, optimized resource allocation, analytical report generation, billing cycle management, procurement documentation, inventory governance and supply chain optimization all under one roof.

Microsoft Applications Platform, and surrounding ecosystem, comprises a suite of business applications to support all types of businesses across a range of industries and lifecycles. Today, we’re specifically talking about Finance and Operations. Still, it’s essential to know that this is just one component in the ecosystem that is all designed and built to work together.

Figure 3:Microsoft Business Application Ecosystem

Microsoft Business Application Ecosystem

The Microsoft ecosystem helps chemical companies be agile to stay ahead in the game, manage operations to maximize production, minimize wastage of efforts, investments and time. Chemical companies can quickly up-skill their current employee base to get them acquainted with advanced and easy to learn tools to streamline operations.

Businesses can achieve productivity through strategic planning from top executives and effective implementation of a fortified IT infrastructure. The Microsoft ecosystem makes the implementation simpler due to native integrations and interoperability across these tools.

Key Takeaways

  • To address the chemical industry challenges in managing and streamlining the operations in chemical companies, the top executives will need to look at the advancements of the digital world and align their processes with the current headways.
  • Timely intervention from a strategy and implementation point of view is essential to overcome the issues about chemical companies’ operations.
  • Chemical companies can significantly benefit from comprehensive ERP and SCM tools that can facilitate efficacious streamlining of operations from the shop floor to the top floor and even in inventories and the after-market.

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