Chemical

4 KPIs That Impact The Growth of a Chemical Company

4 KPIs That Impact The Growth of a Chemical Company 960 540 Xcelpros Team

4 KPIs That Impact The Growth of a Chemical Company

Does your business operate in the chemical industry? If compliance is a big part of what you do, you don’t want to miss out on this quick insight into important KPIs that could be impacting your business today. For more information see the full article here.

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D365 supply chain demand forecasting helps Chemical Industry

How Dynamics 365 Supply Chain Demand Forecasting Helps Chemical Companies Plan for Inventory

How Dynamics 365 Supply Chain Demand Forecasting Helps Chemical Companies Plan for Inventory 2400 900 Xcelpros Team

At a Glance

  • Accurately forecasting customer demands allows a company to quickly adapt to changing needs. Leveraging predictive analysis of historical data in demand forecasting models permits better understanding of what customers want.
  • Chemical industry decision-makers and inventory managers are now concentrating on short- and long-range demand fluctuations caused by price volatility and changes in supply chain dynamics.
  • Top executives can make insightful decisions driven by informed analysis of demand patterns using robust Supply Chain Management (SCM) tools.

Understanding Demand Forecasting

Demand forecasting uses predictive analysis to gauge customer demand patterns based on historical data. Historically, chemical companies use demand forecasting to gauge independent and dependent sales orders. Rapidly increasing global markets and integrated business models show a growing need for better responsiveness and flexibility in demand forecasting. Making these changes helps chemical companies:

  • Prepare shipping materials in advance for one-time and complete deliveries.
  • Manage inventory while being flexible to accommodate unforeseen demands.
  • Sense and predict product demand based on market hierarchy, geography, climate, time zones and other reasons.
  • Stand out in the market by consistently delivering at competitive prices.

Understanding historical demand and accurate inventory management plays a key role in forecasting sales. It ensures adequate inventory. Improperly managed inventory impacts everything from shipments to sales. Companies are very reactive about their inventory planning when resources are not allocated properly. Continually reprioritizing orders throws off historical demand tracking. Adding an unexpected order can lead to big problems.

A recent poll by Deloitte with chemical executives indicates that more than 20% of total US chemical sales will be driven by business-to-business (B2B) e-commerce in 2021.

Accurately forecasting inventory helps firms understand what they have. It also helps visualize the sales pipeline. With accurate demand forecasting, a plant can take measured risks and make informed decisions causing higher profits.

Demand Forecasting Challenges

Chemical companies often struggle to leverage huge volumes of data. Not understanding and using the data effectively can cause incomplete interpretations and communication errors.

The supply chain may have multiple stakeholders using different systems for enterprise resource planning (ERP), data management (DM) and supply chain management (SCM). Demand forecasting using these different systems often causes duplicate information and loss of crucial data.

Failing to use an integrated, sophisticated demand forecasting system limits a company’s ease of use and its ability to customize the software for its unique needs.

Figure: 1Demand Forecasting Challenges in Chemical Industry

 Demand Forecasting Challenges in Chemical Industry

Demand Forecasting in Microsoft Dynamics 365

Microsoft Dynamics 365 Supply Chain Management (SCM) helps businesses adjust forecasts and view key performance indicators (KPI’s) more efficiently. Companies using this product can see demand trends and then adjust forecasts. The new forecasts seamlessly are used in inventory planning. By removing outliers, Dynamics 365 enables accurate measurements.

Dynamics’ Supply Chain Management tool follows a comprehensive flow for demand forecasting:

  1. 1.System gathers historic transactional data.
  2. 2.Machine learning uses the data to generate forecast and insights.
  3. 3.Collected data provides forecast visibility while allowing forecasts adjustments.
  4. 4.Approved forecasts are then authorized.

Figure: 2Demand Forecasting in Microsoft Dynamics: How it Works

Demand Forecasting in Microsoft Dynamics: How it Works

Microsoft Dynamics 365 SCM helps manage these complex demand patterns and improve inventory planning. Its features include:

  • Integrating Planning Optimization using demand forecasts to make informed decisions for master plans.
  • Creating, generating or importing the demand forecast based on operational models and company requirements.
  • Customizing demand forecasts that streamline the process by reducing intercompany orders and considering customer forecasts.
  • Increasing accuracy and margin with lean demand forecasting.
  • Graphing and creating interactive demand forecasts for real-time feedback anywhere on the trend line.
  • Seamlessly applying the demand forecasting tool with existing ERP. This harnesses data and generates accurate forecasts for improved inventory control and bottom lines.

Chemical companies can better predict demand by fortifying their IT infrastructure with the right tools. Using software that’s easier to use, more accessible and has greater accuracy enables them to improve their inventory planning. Integrated solutions like Microsoft Dynamics 365 provide a robust and complete demand forecasting tool, enabling businesses to set up and maintain optimal inventory control.

Key Takeaways

  • Demand forecasting in the chemical industry needs to move forward from conventional, spreadsheet-based models and tools to newer, more agile digital systems.
  • Microsoft Dynamics 365 offers chemical companies the ability to forecast inventory levels more accurately through visual, customizable and interactive features.
  • Increased focus on accurate demand forecasting helps chemical companies avoid stock-outs or over-stocking. It improves profits, strengthens supply chains and elevates overall customer satisfaction.

To learn more about implementation of demand forecasting in your chemical company, book a free consultation with Xcelpros.

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About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

Leveraging Technology to Boost Profits for Chemical Companies

How chemical companies benefit from adopting newer technology

How chemical companies benefit from adopting newer technology 2400 900 Xcelpros Team

Introduction

Chemical companies can face numerous problems dealing with hazardous chemicals held in inventory. More supply chain officers are turning to digital tools to transform their operations, and increase efficiency. Here are some ways that technology is helping the chemical industry by automating chemical management.

Leveraging Technology in Chemical Companies

Looking to digitally transform your chemical company? Get a free assessment with XcelPros.

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About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

Advantages of material requirement planning

Advantages of a material requirement planning system (MRP) vs. manual planning

Advantages of a material requirement planning system (MRP) vs. manual planning 2400 900 Xcelpros Team

Introduction

While it wasn’t a strong consideration for chemical production in the past, today’s plants are realizing the need to know where they stand in terms of meeting their customer’s needs. Some key demands being placed on the chief financial officer by different departments include questions like.

  • Can we fulfill my customer’s regular orders on time?
  • Are we able to deliver a client’s last minute rush-order?
  • Do we have enough inventory to stay on schedule without impacting other projects?

The only way for a plant to know exactly where they stand in terms of its raw materials, packaging, production and delivery schedules is through proper planning.

The benefits of effective materials requirement planning starts with understanding each product’s formulas, which dictate the required bills of materials (BOMs) in terms of raw or previously refined ingredients along with up-to-date instructions on how to safely use them.

A manufacturing BOM is essential in designing enterprise resource planning (ERP) systems and materials requirement planning (MRP).-Investopedia

Difficulty with Conventional Methods

A conventional method of making sure you’d have all the information required to answer the CFO’s questions was by using Microsoft Excel spreadsheets for production planning. One spreadsheet might list all of the required chemicals for a specific formula from the BOM in the first column followed by others showing the quantities required for each batch and the quantities on hand. Other sections of the spreadsheet might be what is on order, which supplier is shipping it, when it is due and other similar information.

In this format however, ensuring the information on the BOM is accurate usually requires additional diligence and effort to be put forth. This could mean verifying inventories, making phone calls and sending emails when numbers in the warehouse don’t match. It might mean having one manager call another when a shipment arrives with less than the ordered quantity, or rarely, more than what was ordered.

Once the BOM is completely built out and the CFO knows what materials are available, they can schedule labor and resources to produce the products. This can be tricky when the same distillation equipment is to be used for multiple products, with downtime in manufacturing required between batches for cleaning and device maintenance.

Ideally, production teams have a planner who creates a schedule similar to the one in the image below (see Production Planning PPT slide from Xcelpros).

The Downsides to Downtime

You may have heard it before “Poor planning produces poor performance.” When it comes to business however, poor planning can also mean unexpected costs, and unexpected downtime. Downtime is often defined as time when production is scheduled to run but for some reason is not. Unplanned downtime or production stoppages however can seriously impact a businesses bottom line. These include disruptions in the form of reputational damage and customer churn by not delivering products on time. This unplanned lack of production also causes revenue losses, reduced employee productivity, reduced end-user productivity and stressed employees. Stressed employees can result in employee turnover. An HRDive brief puts the cost of replacing an employee at one-third of an employee’s annual salary or roughly $15,000 per worker.

Direct Costs of Downtime

The direct cost of downtime in production across all industries, not just chemical——varies. According to Atlassian and Garvey, downtime costs add up to

 

$247per minute for small businesses

$9,000 per minute for medium and large businesses

$260,000per hour across all businesses in a 2016 study

800 hours of downtime per year on average in manufacturing alone as cited by Garvey

Source: Atlassian & Garvey.com

Tracking Downtime in the Chemical Industry

According to an article by Accruent, unplanned downtime in the chemical industry appears in

  • Reduced production
  • Losses caused by quality issues
  • Costs for equipment repairs
  • Decreased customer satisfaction

One example cited was the quality drop off when a High-Density Polyethylene (HDPE) plant restarts. The plant can take from hours to days to produce right-first-time materials. The transitional goods are either scrapped or sold as reduced quality.

Proper Planning Produces Peak Performance

Figure: 1Production Planner’s View on Manufacturing: Planning & Execution in a Chemical Company

Features Of MRP System

Much of this downtime in manufacturing can be avoided by proper planning, especially when using a Master Plan. Managing master planning processes using software such as Microsoft Dynamics 365 Supply Chain Management can complete a number of critical tasks including

  • Calculates net requirements for the master plan based on actual current orders. This permits day-to-day inventory management.
  • Forecasts gross requirements for long-term planning of materials and production capacity.
  • Calculates net requirements across legal entities, such as different companies providing supply and demand.

The Master planning module determines the supply (materials) and capacity (resources) needs that will meet current demand (net requirements),” which includes the longest lead times.-Microsoft

The Master plan setup includes coverage settings and defining coverage rules for items.

Using a Master plan includes creating a constrained plan, handling safety stock and dealing with delays.

When used with multiple sites, the Master plan creates site schedules, site plans and coverage, the BOM version and other functions.

In terms of intercompany planning, the Master plan lets CFOs and project planners view the outbound intercompany demand and collaborate with internal supply chain customers.

Demand forecasting functions include importing historical data, generating, adjusting and approving a baseline forecast and then monitoring the forecast for accuracy.

Demand Forecasting in Microsoft Dynamics 365

Figure: 2Basic flow in Demand forecasting

Basic flow in Demand forecasting

Having an idea what to order in advance is a “top of the mind” issue for many CFOs. Microsoft Dynamics 365 Supply Chain Management can perform demand forecasting, though it requires the Microsoft Azure Machine Learning Studio, which has limited availability.

  • Predict independent demand from sales orders and dependent demand at any decoupling point
  • Customize it for industry-specific requirements
  • Visualize demand trends, confidence intervals and make forecast adjustments based
  • Remove outliers
  • Authorize the adjusted forecast for planning

Final Thoughts

Proper planning helps CFOs cut costs and reduce downtime in manufacturing at the same time. One way to ensure production facilities have enough of what they need to keep factories rolling is by using an MRP system. These systems are

  • More efficient
  • More accurate
  • Better for long-term planning

Looking to digitally transform your supply chain? Take a free assessment!

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About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

Factors Influencing Chemical Inventory Management

Key Influencing Factors in Chemical Inventory Management

Key Influencing Factors in Chemical Inventory Management 1200 450 Xcelpros Team

Understanding the Issues

From maintaining accurate inventory records, monitoring chemical warehouse safety requirements of raw materials in inventory, keeping up with fluctuating demands, and working with changing commodity prices, chemical companies today face numerous obstacles that can have a big impact on chemical inventory management, which is already a complex and dynamic task, by industry standards.

To minimize the impact of these challenges it’s important that chemical companies are able to identify and understand what issues exist before they cause too much damage. Unfortunately, keeping an eye on every aspect of inventory management could be the biggest challenge if you don’t know where to start. Here are 4 key things to focus on that can help businesses stay ahead of the competition, and respond quickly to changes in requirements.

1.Accurate Warehouse Inventory Chemical companies cannot accurately plan for changes in the supply and demand of their products if they do not have the latest status of their inventory. When it comes to managing the complex inventory often seen in the chemical industry, even small problems in the warehouse can lead to bigger organizational challenges. To prevent this, it’s important that everything is accurately labeled and stored in the correct locations to efficiently fulfill orders and manufacture products. Effective chemical warehouse management can help companies to save up on a lot of costs.

2.Occupational RequirementsAside from ensuring no harm comes to end users, chemical companies have a huge responsibility for the health and safety of their employees, this starts with knowing exactly what chemicals and raw materials are present at all times, and what hazards they might pose. Company’s need to properly track hazardous materials as well as educating employees on precautions and procedures for handling goods. Hazard communication has repeatedly ranked at the top of OSHA’s list of most-cited violations every year.

3.Fluctuating DemandAnother challenge faced by chemical companies is unplanned fluctuations in the demand for their products. Big jumps in demand can result in either the expiration of raw materials and products, or the inability to produce enough when required, with both scenarios having significant impacts on business operations and revenue. Being able to quickly react to changes in the market, as well as supply chain disruptions can help minimize the impact of these situations and more.

4.Volatile Commodity PricesChemical companies are also forced to deal with wildly fluctuating prices for the raw materials they use. For many products, crude oil and other petroleum products account for about 50% of the material’s production costs. Due to the volatile nature of oil prices, economic factors such as politics, tariffs, and fluctuations in currency value are just a few of the things that play a role in the price of raw materials. One key aspect of chemical inventory management is accurately predicting trends so that companies purchase raw materials efficiently and at cost-effective prices. When chemical companies have enough insight into their own inventory, they’re able to place more focus on buying the materials they need to meet the demands of their customers.

Figure: 1Benefits of a chemical inventory management system

Benefits of a chemical inventory management system

Final Thoughts

While there are a number of other challenges that impact businesses in the chemical industry, not knowing where to focus makes it difficult to efficiently address issues as they arise. Understanding the 4 key factors covered above can help get companies focusing on the right performance metrics, and better positioned to navigate the unexpected ups and downs that go along with the industry.

Often, the best course of action to manage these complex inventory management challenges includes technology-driven solutions that help chemical companies in in-depth chemical inventory tracking, eliminating the issues of not knowing where materials have been stored, keeping track of their safety information, and analyzing inventory trends to better prepare for the demand of customers without keeping too much inventory in stock.

Looking for effective ways to manage your chemical inventory? Book a free consultation with XcelPros!

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About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

4 KPIs that impact the growth of a Chemical company

4 KPIs that impact the growth of a Chemical company

4 KPIs that impact the growth of a Chemical company 1200 600 Xcelpros Team

At a Glance

  • Quantifying progress is important for any industry to know they’re on the right path. The chemical industry should focus on specific KPIs to measure its growth and to make sure it is moving in the right direction.
  • Continuous improvement is important, understanding which KPIs to focus on will ensure that companies are able to assess their performance and make adjustments wherever necessary.
  • KPIs should be communicated by upper management so that employees fully understand their tasks and everybody has a clear set of goals.
  • While the chemical industry might be seen as having fairly standard KPIs, it’s essential to understand that every company is different and will likely focus on different information.

The chemical industry has always operated within certain conventional settings and boundaries. With digital technology advancing so quickly, however, more and more chemical companies are thinking outside of the box in an effort to become more agile. These thought leaders are looking for better ways to quantify their manufacturing KPIs, generate insights and boost revenue.

According to the American Chemical Council (ACC), the US economy is expected to grow by up to 3.7% in 2021 and that chemical production will rise by as much as 3.9%. With this kind of growth expected, it’s more important than ever for chemical manufacturing and distribution companies to recognize and prioritize the most important KPIs for the chemical industry. While every performance marker is important there are a few KPIs that can have a greater impact on the overall production and aftermarket aspect of the business. C-level executives from these companies need to look closely at which performance measures make the most sense for them. Below are 4 KPIs in the chemical industry that could have a huge impact on a business’s bottom line.

1.Operational KPIs

It’s important to be able to measure the operational performance against benchmarks to achieve the desired results in manufacturing, including both quality and maintenance. Measuring important KPIs like scheduled uptime vs. total scheduled operational time lets organizations to calculate things like manufacturing schedule compliance, percentage of quality compliant products, and production rate per product type against the planned demand. This helps organizations achieve a high Overall Equipment Effectiveness(OEE) and optimize costs.

2.Regulatory KPIs

Adherence to local and global regulations is one thing chemical companies should never compromise on. KPIs for regulation compliance enable chemical manufacturing companies to record, measure and maintain records required for various rules and requirements. It’s imperative for chemical companies to set up and follow KPIs related to Regulatory Affairs (RA) in order to determine the long-term efficiency of their compliance processes.

Figure: 1 Primary Areas with Impactful KPIs: Chemical Industry

Primary Areas with Impactful KPIs: Chemical Industry

3.Inventory Utilization KPIs

While maintaining higher than usual inventory levels adds to overall costs, stock-outs can create even greater bottlenecks in production. This is the main reason it’s so important to maintain optimal inventory levels. Adhering to throughput rate and buffer levels can help chemical companies consistently achieve the inventory levels required to keep production going without increased inventory costs. Inventory KPIs also help in maintaining consistent inventory turnover rates.

4.Customer Experience KPIs

This measurement is now growing extremely popular in every industry, including chemical. More and more companies are looking to connect directly with their end-users in order to understand buying habits, trends, and ultimately determine what their customers want. This lets companies focus on producing the right products for their target markets.

Bonus – Environmental impact and sustainability KPIs

A lot of conventional chemical manufacturing methods and processes are still highly resource-intensive, with the potential to cause serious damage to the environment. Moving forward, chemical companies need to research and invest in greener, more sustainable models of working. This can be achieved by setting up KPIs and ensuring proper governance.

According to their website, BASF (the largest chemical producer globally) has the goal of growing CO2 neutrally until 2030.

Similarly, the Dow Chemical Company has plans to stop the waste by 2030, by enabling 1 million metric tons of plastic to be collected, reused, or recycled through its direct actions and partnerships. The company invests and collaborates with partners who have similar interests and can provide infrastructure and technologies to accelerate global recycling.

Focusing on these performance markers and goals not only helps in showcasing strategies for chemical companies to go greener but can also set an organization on a much shorter path to success. By protecting the environment and offering a better customer experience, along with producing and managing products much more efficiently will help companies in this sector achieve new heights.

Key Takeaways

  • Utilizing customer experience KPIs can help companies better understand their customers’ buying habits along with market demand and the impact of their efforts.
  • Chemical manufacturers need to set up KPIs not just for the production chain, but the entire lifecycle- from procurement of raw material to end-user.
  • Organizations need to be more conscious of resources and the impact on the environment. Chemical companies are taking note of this and the right step in this direction is to set up environmental goals and KPIs.

Planning on restructuring your chemical operations for streamlined processes? Get a free assessment with XcelPros!

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About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

Rising data security risks in chemical plants

Rising data security risks in chemical plants

Rising data security risks in chemical plants 2400 1200 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 free trial!

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About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

Enhancing Chemical Plant Operations to Make it Smart Factory Ready

Enhancing Chemical Plant Operations to Make it Smart Factory Ready

Enhancing Chemical Plant Operations to Make it Smart Factory Ready 1200 600 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 free consultation on transforming into a smart chemical factory.

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About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

Handling Hazardous Chemicals at Workplace to Safeguard Health and Environment

Handling Hazardous Chemicals at Workplace to Safeguard Health and Environment 1200 600 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. Visit www.xcelpros.com/icm or call us at 1.855.411.0585.

Get a Free Consultation on Effective Management of Hazardous Chemicals.

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About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com

A Comprehensive Approach to Digital Transformation in the Chemical Industry

A Comprehensive Approach to Digital Transformation in the Chemical Industry 1200 600 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

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.

Get A Free Consultation To Begin Your Digital Transformation Journey.

Get Started

About XcelPros

XcelPros is a Chicago-based company delivering transformation through technology. We offer business and technology solutions with deep industry experience in Chemical, Pharma, Life Sciences (including Medical Devices, Bio-Medical & Biotech), Insurance, Discrete Manufacturing, Process Manufacturing, Distribution and Food & Beverage.

XcelPros is a Microsoft Gold Partner, Direct Cloud Solutions Provider (CSP) and a Systems Integrator (SI) offering software licensing, implementation and consulting services for Microsoft Dynamics 365, CRM, Microsoft Dynamics AX, Business Intelligence & Analytics (Power BI), SharePoint, Office 365 and Azure (Cloud, IOT, Microsoft Flow amongst many others).

Our mission is to provide integrated technology solutions that amplify impact and empower our customer’s businesses. We believe technology is the key enabler of exponential growth for us and our customers.

Contact XcelPros today to transform your business.

Call us toll-free – 1.855.411.0585 (or) visit www.xcelpros.com