How much digitalization does the chemical industry need?
In a time of digital transition, this is a critical question for the success of the industry and one which Joachim Getto, Associate Partner for Business Models and Logistics Digitalization at CAMELOT Management Consultants AG, justified at Forum Chemielogistik 2017.
The central question that concerns many logistics experts is: How much digitalization do chemical companies actually need?
Joachim Getto: Generally speaking, enough to give the company an advantage against its competitors. That sounds simple, but it depends heavily on how prepared a company is to introduce new business models and establish the accompanying success factors. If we look to the status quo, we still see many traditionally structured companies. They have evolved business practices which have allegedly given them an advantage over their competition for a long time. But it is exactly these competitive advantages and the connected business and success factors that are being challenged by the changing digital landscape. This change will happen with a greater delay in the chemical industry than in other branches of industry that have more direct contact with customers. The chemical industries are currently making a greater effort to reach customers through e-commerce platforms and to rid themselves of the intermediate step of the retail market.
From your perspective, what challenges does this present?
Joachim Getto: The challenges facing chemical companies are correlated with the maturity of their logistics. Today optimization occurs, as it always has, through automation of logistics practices. However, those responsible also have to be involved in the process of autonomizing or individualizing their products. Otherwise the digital transition cannot be accomplished.
Doesn’t a consulting company have to provide disruptive solution approaches and show the company what effects digitalization will have on it
Joachim Getto: Disruptive isn’t the right word in this case. It implies something completely surprising and sudden. I keep realizing, though, that successful companies are well aware of the transition and the changes that come with it. Because technological development always requires a certain consistency. The technologies behind the buzzword “digitalization” had already come about in the 90s or even earlier.
That makes sense. But as an expert and consultant, what do you provide the company with?
Joachim Getto: As a consultant, part of my job is engaging with future topics, trends and the newest research findings. That way I can bring not only experience from other consultancy projects but also new approaches from research and development to a client’s company. This allows us to have a fruitful dialog and work toward individual solutions. A good consultant always has to keep an eye on whether a particular solution is right for the company, what factors influence this solution and whether or not the solution will be sustainable in the future.
The keyword is sustainability. In your opinion, which innovations or technologies will influence the chemical industry and logistics in the next five years?
Joachim Getto: In the next few years, the important technologies will be those that contribute a great deal toward making chemical logistics more efficient, more reliable and more secure. Blockchain technology, for example, offers great potential in the area of security. Mobile apps provide for more efficient communication within logistics processes. Another exciting topic is cognitive computing in connection with digital voice – something like the Alexa or Siri for logistics. It is crucial, however, that we stand by the company’s employees during the coming transformation process and create new areas of expertise. That’s why I’m convinced that a new profession is emerging in the chemical industry, namely the position of data analyst. Data analysts have an eye on the numbers, analyses and data and will ensure that IT and logistics develop together to the required degree.
As of now, these types of specialists aren’t available in the job market. What skills do such data analysts need to have? And how can companies train such experts?
Joachim Getto: Data analysts use IT technology as a central tool and must have a good command of it. In addition, they also need to have a subject-specific understanding of which data among many are actually relevant in order to move the company forward. Purposefully catalyzing and interpreting massive amounts of data is the true challenge of “Big Data.” So data analysts combine their subject-specific knowledge with IT knowledge, and that isn’t even anything new. I’ve been having this discussion for ten years. Companies have to train their older employees well. By now there are training programs that specially train experienced professionals for these new challenges. With young professionals this isn’t such an issue. As “digital natives” they are living through digitalization and have grown up with all of the topics that we’re discussing.
In light of all these discoveries: Which areas should the chemical industry invest in?
Joachim Getto: At the moment, logisticians are not investing to the necessary degree in digital technologies. In my opinion, the use of self-directed, decentralized robots or data analysis tools would be of great help here. Delivery reliability, for example, can only be consistently improved through the use of such groundbreaking technologies. However, the current readiness of the technologies must always be taken into account.
We know this much: Companies are being driven to transform, to develop new, successful business models based on these transformations and to place the added value for their customers at the forefront. All of this is dependent on strategy, customer structure and customer loyalty. It is clear that digitalization cannot be reversed, and companies that hope to be successful in the market in the future must, without a doubt, master the changes that digitalization brings with it.