ABB has warned that unless the leaders of chemical companies embrace the Industrial Internet of Things (IIoT), they risk delivering disappointing shareholder return and could put their companies in “serious jeopardy”.
In a white paper published today, ABB said conditions over the next decade are likely to become more challenging with considerable uncertainty and disparity of performance throughout the chemical industry. Volatile oil prices, geographical shifts in chemicals production and demand, along with complex and interchangeable chemical supply chains mean the number of variables that executives need to consider are enormous.
ABB, which sells automation and instrumentation to the chemicals industry, says companies have spent many years investing in automated operations, process controls, sensors and real-time data systems but in a scattered manner. It says advances in digitalisation now allow companies to bring together data from disparate systems to improve their businesses.
“Digitalisation, done well, allows chemical companies to get a highly granular view of their assets which, when viewed in conjunction with data from more traditional business systems, can generate quicker and better insights to drive competitive advantage,” says Zied Ouertani, Digital Lead, Chemicals and Refining for ABB’s Industrial Automation Oil Gas and Chemicals Business Unit.
“But to benefit significantly from the potential offered, companies will need to embrace digitalisation on a bigger, much more holistic scale encompassing end-to-end processes throughout plants and across the supply chain – not just in isolated pockets of change.”
ABB says that leaders must move quickly, or risk being surpassed by competitors who embrace the full potential of digitisation to transform operations at the device, process, plant and enterprise level.
While ABB has a vested interest in selling digitalisation technology, it is not alone in warning about the risks of the sector’s conservative adoption. In a report released last year, Deloitte said that 56% of chemical enterprises lack a digitalisation strategy, describing the finding as an “alarming statistic”. In terms of digital maturity, Deloitte ranked the chemicals industry behind only construction, logistics and plant engineering.
ABB’s paper, which can be downloaded here, reviews the challenges facing the chemicals industry and provides an overview of how companies can use digitalisation to reduce costs and minimise risks.
For more articles on digitalisation, read our Future Features series