Chemical industry: Improving chemical production efficiency

Ian Elsby, Head of Chemical industry GB&I at Siemens UK, believes the move to Industry 4.0 will be more of an evolution than an enterprise-wide revolution.[1] According to him, digitalisation is being driven from the factory floor as plant managers, OT (Operations Technology) and in-house IT specialists collaborate with trusted partners to find digital solutions to everyday operational challenges.

Barriers to Strategic Digitalisation

In contrast to many other sectors, the chemical manufacturing industry has been slow to embrace digitalisation. Elsby attributes the industry’s lack of commitment to digitalisation to an underlying culture of caution and preference for reducing operating costs. 


“This is an industry that sees uninformed decisions as potentially dangerous. It takes the same rigorous, evidence-based approach to assessing risk used in developing and manufacturing chemical products across all other areas of the business, including technology innovation and finance.”


According to PwC’s 21st Annual CEO Survey, 75 per cent of senior US chemical company executives still view cost-cutting as their primary activity for driving profitability.    

“As a result, every request for budget must be backed by evidence of a fast return on investment,” says Elsby.


“Replacing tried-and-tested equipment will always trump funding new and unproven technology. As for securing budget for a ‘big idea’ like company-wide digitalisation which requires a significant commitment of operational time, money and faith? Not without a guarantee of a speedy impact on productivity and profitability and super-fast return on investment.”

A Step-by-Step Approach

While the chemical industry’s C-Suite budget-holders may still need to be convinced of the benefits of digitalisation, there’s a growing contingent of people at the sharp end of the business, particularly on the factory floor, turning to digital technology for help in “doing more with less.”


As the industry becomes increasingly competitive, and margins continue to shrink, chemical manufacturing plants are under relentless pressure to maximise production, reduce costs and, at the same time, find ways of recouping value lost through waste and unscheduled downtime.  All while maintaining product quality and meeting ever more challenging regulatory demands.


As most chemical manufacturing plants operate primarily on legacy equipment and technologies, there’s very little support or scope for improving productivity and quality.

The Cost of Getting It Wrong

With materials accounting for more than 60 per cent of manufacturing fixed costs, chemical companies can’t afford to manufacture product batches that don’t meet quality standards. The company doesn’t only lose out on the value of the sale but the combined cost of the materials, energy and time used in the production process. There’s also the hidden cost of dealing with waste and by-products, including industrial effluent. In the worst instances, severe quality issues can result in production being brought to an expensive halt.


Speciality and other chemicals are manufactured in batches to mitigate the risk – and cost - of products being “spoiled” and going to waste. However, even limited batch processes can be hard to control and analyse because each batch is unique. The raw materials can differ from batch to batch and there are often differences in equipment, operating conditions and processing length and activities.


Something can go wrong in a very short period. A batch that fails to meet quality levels is spoiled. And there is nothing more expensive than waste.


This suggests that the current approach to quality testing, which involves a person inputting data into a stand-alone spreadsheet, may not be fit for purpose. If a problem occurs without discernible warning, scheduling tests at intervals from a few hours to a few weeks could be catastrophic.

The Golden Batch: Reduce Waste, Cut Costs

The ability to manufacture the perfect “golden batch” that meets all quality parameters, not just once, or even quite often, but every time is the key to improving productivity. It requires a level of insight and control at every stage of the manufacturing process that manual, reactive testing simply can’t provide.


Whereas manual sampling and testing only reveal problems as and when tests are undertaken, which will always be after the event, a digital Predictive Quality application operates automatically, continuously monitoring product status against all relevant quality parameters and KPIs. The application identifies and, importantly alerts the user, to potential issues in real time, allowing remedial action to be taken before a minor glitch becomes a substantial and costly problem.


Using Predictive Quality digital application converts static information into dynamic knowledge that can be used to inform and improve day-to-day and long-term planning across the business.


As soon as it’s collected, data is analysed and uploaded – in real time - to easy-to-use dashboards. Because data is also uploaded to the Siemens Industrial Cloud where it can be shared with, and accessed by, other areas of the business, Predictive Quality can help eliminate ‘silos’ and identify new opportunities for communication and collaboration between people, departments and processes.

Minimising Risk, Building on Success

Can a single successful digital implementation encourage chemical companies to move forward with digitalisation? Ian Elsby believes it can.


“As we saw in our recent survey of the UK chemicals industry which revealed[2], customers are being given a risk-free insight into the benefits of digitalisation by applications such as Predictive Quality. The success of these very targeted implementations in delivering quantifiable benefits that go beyond solving real-and-pressing manufacturing problems – and a reassuringly fast ROI – is making the case for digitalisation in precisely the terms that resonate at the highest levels within the chemical industry.”

However, we don’t expect or want customers to see digitalisation in all-or-nothing terms, but more as a step-by-step process in which success builds on success.
Ian Elsby

“We’re there to help them identify and implement digital applications that meet critical business needs at whatever pace makes them feel comfortable.”

A new report based on research offers authoritative opinion, comment and advice from the UK’s chemical industry leaders and investigates priority areas for digital transformation, as well as where digital technologies can have the greatest impact on business outcomes.


The report is essential reading for chemical companies currently crafting their approach to Industry 4.0 and digital transformation.



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