Innovation In The Chemical Industry

Judy Cubiss and Ginger Shimp

The only constant is change, right?

For the chemical industry, this could not be more true. In fact, if we were to travel back in time just five or ten years, we would be amazed at the difference.

The industry is in a constant state of flux, with mergers often in the news. While this happens in all industries, it is especially prevalent in the chemical industry, and mergers and acquisitions are one of the most disruptive things that can happen to any company. Many executives lie awake pondering how to quickly integrate acquisitions to release promised synergies and onboard new revenue sources; how to reduce complexity, integrate across silos, and streamline workflows across the entire global value chain; how to resist commoditization by embedding themselves more intimately within customers’ innovation and operations cycles; how to rapidly enter, differentiate, and win in new markets.

And so much more.

Recently, Brian Fanzo and Daniel Newman, co-hosts of the popular S.M.A.C. Talk (Social, Mobile, Analytics, Cloud) Technology Podcast, caught up with Lauren McCallum, part of SAP’s global chemical industry group at SAP, on an episode of an extraordinary series entitled Digital Industries, which examines how digital transformation is affecting 16 different industries.  Listen to a short perspective from a recent podcast.

SMAC podcast

McCallum observed:

if you are going to merge two companies the size of DuPont or Agrium or Potash what are you going to do with the software that runs both

The benefit of this form of “disruption” is that it drives each chemical company to grow faster in an attempt to outpace the competition. In a world where mergers and takeovers are frequent, there is no time to lag behind.

However, during a merger or takeover it can be hard to keep the day-to-day operations of a firm in check. Also, employees can become frustrated as they try to learn yet another new system for sales, vendor records, marketing, and other common tasks. In this way, a merger or takeover can mean a significant loss in productivity.

Can technology help?

There are many new technologies out there that could be exciting from a chemical industry perspective, to either help these giant companies that have just merged together, or help the actual industry transform and leverage data in a different way.

58 percent of chemical companies are embracing digital to gain competitive advantage over their peers

One example is cloud solutions. For example, Dow and DuPont between them have spun off and started any number of new companies over the past few years. These spin-off companies are sometimes public, sometimes not. They need a cost-effective, instant software system that they can move to quickly—a cloud solution would be a perfect fit.

Another example of how new technologies are helping the chemicals industry is the Internet of Things (IoT), which has already impacted the industry and yet still has potential. McCallum said, “Chemical companies have had sensors in equipment for a really long time. You talk to them and they’ll say, ‘Internet of things. Yeah, that‘s old news. We’ve been doing that for a long time.’”

Since sensors with controls from afar have been used in the chemical field for years, management can keep track of all the little details and make adjustments from a desk across the property. But when you can track your production data through to your customer’s production data—such as an automotive manufacturer—and see their production outcomes, and be able to trace back to plant conditions, that has the potential to become very interesting.

Tying all the IoT sensor Big Data together could revolutionize the industry, but other technologies can have a large impact too.

blockchain could be an interesting technology for streamlining authentication of transactions and processes in a cleaner way

To listen to this episode of Digital Industries for the chemicals industry, co-produced by SAP and S.M.A.C. Talk Technology podcast, click here.

Transforming into a truly digital business is so much more than just implementing new technology to meet the demands of a digital age. It’s more than keeping up with the deluge of transformation happening all around us. Digital transformation is about understanding how to harness these changes and incorporate them into your business strategy. It’s about driving agility, connectivity, analytics, and collaboration to run a Live Business. A digital core empowers you with real-time visibility into all mission critical business processes inside your four walls, and in your interactions with customers, suppliers, workforce, Big Data, and the Internet of Things.

Learn how to innovate at scale by incorporating individual innovations back to the core business to drive tangible business value by reading “Accelerating Digital Transformation in Industrial Machinery and Components.”

1“The Chemicals Industry: Getting Ready for Next-Generation B2B,” Accenture, 2015


Judy Cubiss

About Judy Cubiss

Judy is director of content marketing for Finance at SAP. She has worked in the software industry for over 20 years in a variety of roles, including consulting, product management, solution management, and content marketing in both Europe and the United States.

About Ginger Shimp

With more than 20 years’ experience in marketing, Ginger Shimp has been with SAP since 2004. She has won numerous awards and honors at SAP, including being designated “Top Talent” for two consecutive years. Not only is she a Professional Certified Marketer with the American Marketing Association, but she's also earned her Connoisseur's Certificate in California Reds from the Chicago Wine School. She holds a bachelor's degree in journalism from the University of San Francisco, and an MBA in marketing and managerial economics from the Kellogg Graduate School of Management at Northwestern University. Personally, Ginger is the proud mother of a precocious son and happy wife of one of YouTube's 10 EDU Gurus, Ed Shimp.