Chemical Supply Chain transformed by Data
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Digital Twins Deliver New Value to Multiple Stakeholders
When we look across the global Chemical Supply Chain, we see incredibly talented people taking care of business processes around the clock, but much of the work is manual and creates a heavy administrative burden. If only these dedicated domain experts could have the tools at hand to match their own capabilities.
The challenges we face are increasing commoditization, complexity of supply networks, ageing assets and the rising demands from cargo owners for transparency and predictability. These are putting pressure on carriers and operators to provide innovative solutions.
The rejuvenation of business processes in the supply chain is enabled by the adoption of cutting- edge technology. As digital tools mature, new opportunities emerge for chemical industry participants to drive differentiation that in turn, converts to market advantage and commercial performance. It starts with gathering data and it results in insights and opportunities to create new business models and service offerings for multiple stakeholders to create new previously unthinkable data driven revenues.
The pace of change and risk of being left behind is very real.
Plant operations rely on deliveries of the right product, the right quality, the right quantity, at the right time. On the route there are many critical variables that can hamper success. Plant setup takes time and planning, so customers increasingly demand assurance on ETA’s, product quality flexibility, safety, and sustainability. Commoditization ‘mega-trends’ force actors to assess their true value contribution in the ‘global value network’ and prioritize accountability to retain and preserve their ‘share of wallet’. Instinctive or approximate decision making on cost-cutting measures often has a detrimental impact on productivity, quality or agility. The World Economic Forum describes the ‘Lighthouse’ mega-trend in manufacturing. These are companies that display a vision of the future by positioning themselves as innovative, data centric organizations driven by disruptive mindsets.
Lighthouses manage to adapt their organizations in three main ways. 1. Connectivity 2. Intelligence 3. Flexible automation. As the fourth industrial revolution evolves the concern is that businesses unable to adapt will fall into a productivity stagnation or so-called “pilot purgatory”, meaning they are unable to move beyond the ‘trial stage’ of innovation.
Lighthouse analogy works well. We can picture the decision makers peering into the murky mist of the transportation business with a bright light to steer clear of the rocks of uncertainty and disruptive new arrivals. The cargo owners and manufacturers therefore increasingly expect their vendors to provide new capabilities in line with specific CEO agendas.
In 2021, we were sorely reminded of the fragility and intrinsic vulnerabilities of highly interconnected supply corridors. With multiple ocean-going vessels catching fire at sea, plastic pellets strewn along the coastlines of Sri Lanka, the blocked Suez passage and huge numbers of vessels now languishing off the coast of LA, more data, accountability and assurances of optimized cargo operations and ‘on-time’ delivery is needed more than ever. It’s not just in maritime where we see opportunities for digital twins to drive improvement either. As railcars become increasingly digitized, we see opportunities arising in maintenance, fleet deployment and customer centric services and notifications. The memory of the 2017 Rastatt event which reduced North – South intermodal flow to just 20 percent of normal levels looms large in the collective memory. It’s worth noting that just one minute of plant down-time on a major chemical operation can result in hundreds of thousands of euros of costs incurred for every minute lost.
Until a few years ago, digital transformation was a buzzword of conferences but not necessarily a stipulation for participation in tenders and RFQ’s. Now all that has changed. As front-runners have completed equipping their asset fleets with sensors and connectivity, the challenge to keep pace is intense. Chemical production enlists different strategies like continuous or batch, whilst process streams can merge, de-merge, produce intermediate material or finished goods, and be made-to-stock (MTS) or made-to-order (MTO) on different asset combinations with various starting points across multiple locations. This complexity must be robustly handled with cutting-edge algorithms. A digital twin is a simulation model built using real data, gathered from its real-world physical twin, the asset itself. So, in the case of a chemical carrying railcar or tank container, the sensors send the data to the cloud which gets configured into a digital model of all the locations, events, vibrations, impacts, loadings, couplings, controls and interactions. By equipping non-powered mobile assets with zero-maintenance sensor-nodes, that harvest energy from the environment, it’s possible to achieve far greater transparency and control.
The long-term role of an integrated digital twin is to support all stakeholders during all lifecycle phases (PLM) to enable cumulative increases in productivity. Until now design and operation are largely disconnected lifecycle phases. This tool can be applied at different levels of the operation. On a component level, an asset level, a fleet level or in terms of the goods the asset contains or indeed the business processes and transactions surrounding that asset and its goods. Once the data is flowing, it’s possible to simulate all kinds of possible future scenarios. It’s possible to test plans and contingencies and optimize them after evaluating their relative performance. All this can be achieved without taking undue risks with productive operations or making decisions on parts or fleet deployments without having the necessary insights to make considered and tested choices.
We started by talking about the talented individuals and teams that make the chemical supply chain function so well. Process automation is often perceived as a threat to job security in traditional operating practices. Digital twins are best deployed with Digital agents to support and interact with human counterparts. The asset becomes an active participant in the processes. Let’s consider a few concrete examples where value can be generated.
When oil is unloaded in northern latitudes, heating is often required for the product to flow. This must be planned carefully as spatial limitations around facilities and variable arrival times can cause backlogs and congestion that severely damages productivity. Fleet composition planning demands a clear view on fleet utilization data, client demands vary and changes in geopolitics and economic forces make an impact too. Tank cleaning partners and maintenance workshops deliver their services according to set service level agreements, but facilities vary in quality and equipment standards differ around the world.
What does it take to leverage such opportunities? Near real-time data collection and processing enables maximum extraction of value. Therefore, the solution must be highly redundant and zero maintenance offering a really frequent data update rate over many years. The solution must be fully integrated and ensure interoperability with 3rd party sensors, platforms and control systems. This includes meeting all industry certifications and driving best practice on standards to enable operation in all special industrial environments. The analytics must be developed in line with maximum ‘bang-for-buck’ business objectives. The solution must be intrinsically configurable. Finally, innovative vendors with experience of the complete service suite are required so the product can be used to unlock each customer’s growth drivers and leverage value from all participants in the ecosystem.
By equipping assets with embedded hardware devices with energy harvesting, the data begins to flow. It can be deployed to make ad-hoc informed decisions, make forecasts, predictions and drive investigations. It provides the building blocks to move towards predictive or conditions-based maintenance models. Another source of value is in the audit trail for insurance claims or risk control for investors and financial stakeholders. Digital twins can boost productivity in all areas of the business, but their benefit is often felt most keenly by those who dedicate themselves to the daily task of keeping chemicals moving and working to improve customer satisfaction every day.