Industry 4.0 for chemicals: How can companies navigate through the fourth industrial revolution?

Industry 4.0 for chemicals: How can companies navigate through the fourth industrial revolution? By Stefan Van Thienen, Monika Mahto, and Brenna Sniderman

Hype and heightened expectations about how Industry 4.0 can help chemicals companies accelerate business growth and optimize operations is prompting executives to think through the advanced technologies they could implement within their company and with their partners in the value chain.

In June, we attended the Global Chemicals Think Tank meeting in New Haven, CT where over 100 chemicals practitioners, industry executives, and thought leaders discussed the sweeping changes that will arise from the fourth industrial revolution, colloquially known as Digital Manufacturing Enterprise (DME). DME captures the entirety of opportunities and outcomes related to production techniques, supply chains, product innovation and talent strategies, etc. resulting from Industry 4.0.

The impact of the global chemicals industry is significant: It employs more than 20 million people; generates annual sales of US$5 trillion ; and produces materials that are used by various industries such as agriculture, automotive, construction, and pharmaceuticals. By contagion effect, changes in the chemicals industry are likely to impact these other industries.

Interestingly, the digital landscape for chemicals industry is an evolving mesh of different technologies and the question for executives is which ones to deploy. Technologies such as the Internet of Things (IoT), advanced materials, additive manufacturing, advanced analytics, artificial intelligence, and robotics, as enablers, could help chemicals companies navigate Industry 4.0. The good news is that these technologies have reached a level of cost and performance where they can now be well integrated into companies’ core chemical conversion and marketing processes.

Industry 4.0 and its associated advanced technologies could enable chemicals companies to pursue two types of strategic imperatives: business operations and growth (Table 1). In our recently published paper, “Industry 4.0 and the chemicals industry: Catalyzing transformation through operations improvement and business growth,” we discuss key applications of Industry 4.0 technologies for chemicals companies and how companies can make the most of the opportunities that lie within to streamline their operations and improve their top-lines.

Within business operations, chemicals companies can focus on improved productivity and reduced risk through:

  • Smart manufacturing by focusing on key applications such as predictive asset management, process management and control, energy and safety management, and production simulation.
  • Supply chain planning by improving supply chain visibility through IoT and accurate demand forecasting through advanced analytics.

Within business growth, chemicals companies can focus on generating incremental revenue and new revenue through:

  • Research and development by using additive manufacturing (aka 3D printing) for testing or developing new products; implementing advanced analytics for selecting materials; and deploying 4D printing for developing advanced materials.
  • Smart products and services by augmenting the pay-by-the-ton revenue model and bundling products with technical recommendations for chemicals applications; offering data services; and forward-integrating into customers’ operations.

In their journey to this transformation, companies face challenges associated with talent readiness, systems’ interoperability, data ownership and security, etc. As chemicals companies navigate their way forward, a solutions layer architecture—presented in the paper—could help executives link data management to strategic decisions. The architecture helps bring together diverse capabilities related to data management, advanced analytics, augmented behavior, etc.–within the company as well as with external value chain partners.

Let’s not forget that digital transformation is just the beginning of the journey. It is the agility of people and organizations in embracing the changes brought about by advanced technologies that will determine how effectively companies adopt Industry 4.0.

For detailed discussion of each of these transformation plays and illustrative use cases, refer to the paper, “Industry 4.0 and the chemicals industry”. We would like to continue to conversation and value the opportunity to discuss the opportunities and applications related to Industry 4.0 with you and your team.



1International Labor Organization, “ILO meeting: Decent work in the chemical industry,” November 25, 2013,
http://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_230469/lang–en/index.htm; Paul Mulvaney, “Chemistry has a bright future for us and our economy,” Phys.org, February 19, 2016, http://phys.org/news/2016-02-chemistry-bright-future-economy.html.
2For a detailed description of Industry 4.0, see Brenna Sniderman, Monika Mahto, and Mark J. Cotteleer, Industry 4.0 and manufacturing ecosystems: Exploring the world of connected enterprises, Deloitte University Press, February 22, 2016, http://dupress.com/articles/industry-4-0-manufacturing-ecosystems-exploring-world-connected-enterprises/.