Cloud and digital are two of today’s big buzzwords. But beyond those words is real technology that is tangible and available today to push ahead businesses and the industry as a whole. We have the opportunity to advance operations and behaviors to make the disruptive changes.
These changes are inevitable to a business’ future operations and profitability. Conventional business models are being challenged. New technology is entering the game, but it can be challenge to integrate into current operations. Reimagining business models, processes, and how people work will make a big difference in how competitive a business can be in the future.
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How to get there
The challenges and the opportunities for new business models, products, and services can create problems. Innovation is accelerating; the problem is that there is no existing roadmap to get from one maturity level or stage to the next. How do you create a roadmap for a place you’ve never been?
A better analogy would be the historic explorers who used a compass or star navigation to figure out where they were headed. In today’s move towards digital innovation, we have a direction, even when we’re walking into completely new territory. Businesses need to abandon limited, conventional thinking during that journey. Refusing to go on the journey of digitization and innovation will simply leave you disrupted. Why? Because your competitors are not shy about making this exploration.
Redefining the industry
In the past, the industry has been based around demand for particular chemicals. Now we’re seeing a shift from products sold in high-volume, well-margined markets. Digital transformation is streamlining the industry. It’s changing markets for commodity chemicals as well as specialty chemicals. Chemicals are now being tailored to their end application.
A third tier is developing beyond commodity and specialty markets, focusing on the versatile molecule. Molecular structures can be mapped, similar to a genome, and allow the industry to develop chemicals tailored for very specific purposes and customers. Having these tight specifications allows for finer control and specialty expertise within the industry
Commodity chemical companies are losing ground with these new options and must be reimagined to remain competitive. New competitors are springing up all over the world. The commodity companies must adapt or lose out. But whether they move upstream or downstream in the value chain, a new business model is vital to success.
Examples from the industry
But what industry giants are making the shift to digitization and new business models? Here are a few examples discussed during the Game Changers program: Asian Paints previously sold only paints and coatings. They’ve shifted to a downstream position with over 10,000 retailers. They sell color as a personalized experience for the end user. Monsanto’s focus was selling seeds and agricultural chemicals. They’ve shifted to answering pain points for farmers. The company now provides increased yields based on proprietary recipes leveraging advanced analytics that are customized to a farmer’s field.
A chlorine company looked at its biggest customers. Instead of remaining in the commodity chemical business, it shifted to producing sensor-based automatic dispensing machines. This made it much easier for customers to keep their water chlorinated without testing and additional work. Instead of having to price based upon a commodity (chlorine), the company could price based upon value (pool cleanliness).
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In-memory engines and cloud computing add unprecedented levels of granularity and speed to data processing and analytics, helping you to gain real-time insight into things such as asset performance across your or your customer's’ network in order to make innovative, service oriented business decisions