Industry 4.0 and Elemica

November 1, 2017 Jerry Turner

The Next Industrial Revolution and What it Means to You

There has been some interesting press and research recently around the “Industry 4.0” initiative that started in Germany in 2015, specifically how it relates to the Chemical industry.  There are several good white papers by Elsevier and Deloitte that give a good overview of the origins and current status of the movement within our industry. 

BASF has been heavily involved, as one of the founding members of the initiative.  BASF hired a “Chief Digital Officer” in 2016, who reports directly to the CEO, and they have launched a number of promotional videos and other presentations.  You can find many of these on YouTube.

The idea is that we are at the beginning of a fourth industrial revolution, a software-focused revolution driven by the Cloud and IoT.  The 3 earlier revolutions were:

  1. Mechanical Automation, starting around 1790 with steam power generation and automated machines
  2. Industrialization, around 1910 with mass production
  3. Electronic Automation, around 1954, with application of computers to manufacturing – more hardware-driven; and now -
  4. Smart Automation, starting 2015, software- and Cloud-driven

Of the 7 components that define Industry 4.0, Elemica and its Business Network fits into 5 of them:  AI, Big Data Analysis, Cloud Computing, IoT, and Mobile Devices.  Especially our latest Supply Chain Visibility offerings Elemica Pulse (for order-focused visibility) and Elemica Trace (for shipment-focused visibility) fit hand-in-glove with Industry 4.0 approaches and concepts.  And our Elemica Track app provides Logistics visibility on mobile devices.

Many of my clients still call the idea “digital transformation”, and they are launching Digital Transformation projects for Supply Chain, Customer Service, Manufacturing Operations, HR, Finance, and so on.  It’s more or less the same concept, to drive benefits in visibility, efficiency, and improved customer service, using today’s Cloud-based digital assets.

Many clients now see digitization as a strategic lever for growth and efficiency.  Regarding growth, here are some of the suggested activities and the anticipated results:

 Activity

 Result

 Digitization of R&D

 Higher innovation output

 Customer connectivity

 Increased supply share

 Digital business models

 New revenue streams

And the same for efficiency:

 Activity

 Result

 Predictive maintenance

 Increased capacity

 Augmented Reality in Production

 Increased work efficiency

 Smart Supply Chain

 Reduced working capital

According to a 2016 PWC study, chemical companies plan to spend 5% of annual revenue on digital initiatives through 2019, and 75% expect to have reached advanced levels of digitization by then.  Those companies expect to drive additional revenue of 3.1% and cost reductions of 4.2% using these initiatives.

So what does it all mean?  If you read the industry analysts, they say that this is a real revolution, it’s just getting started, and it’s not going away.  They are counseling their clients to “get started now; don’t wait – go ahead and launch some Industry 4.0 initiatives within your own company, so that you gain some experience with this new kind of customer and supplier engagement, and you don’t get left behind.”

At Elemica, we would love to work with you to launch an Elemica Pulse, Elemica Trace, or Elemica Track proof-of-concept project, to get you started down the path of Industry 4.0.  Call your Elemica account manager today to discuss where to go from here.

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