Chemical producers were among the ﬁrst to use digital technologies extensively. From the days of the earliest digital plant controllers, they have used data to improve their operations. Their R&D teams have tapped large data sets in their search for better molecules and processes. And for at least 40 years, engineers have used computer-aided design (CAD) systems to design their plants.
However, in recent years, the chemicals sector has fallen behind companies in banking, retail, media and telecom that have explored innovative ways to use digital technology to improve their businesses—not only in running their operations, but also in engaging customers and generating new value. Now, chemical companies are innovating again to catch up. As the traditional sources of competitive advantage (access to feedstock, scale assets, process technology and market access) become well-established, new business models are emerging that threaten to disrupt traditional value chains.
In our work with chemical executives, we see a range of ways that they are seeking to use digital technologies to create new sustainable advantage for their industry. These executives want to understand how their world will be different in ﬁve to 10 years so they can take advantage of the changes, or at least future-proof their companies. At the same time, they need to identify their short-term priorities. Bombarded by unﬁltered ideas, they need to frame and prioritize the opportunities to use digital technologies to improve operations and develop topline opportunities, including new products and services.
Bain’s research on this topic identiﬁes three areas where digital technologies show potential: customer engagement, products and services, and operations (see Figure 1). To seize these opportunities, companies will need a comprehensive digital vision supported by new capabilities, platforms, data analytics and changes in business and operating model.
Mobile, social and web interfaces give customers (businesses and consumers) greater transparency into their suppliers, including speciﬁcations, product availability, performance ratings and alternative suppliers. Digitalization provides an opportunity for chemical producers to rethink the customer relationship, to take a more customer-centric view and to focus on improving the customer experience.
Analyzing customer interactions across the value chain, from shopping through purchasing and after-sales interactions, makes it possible to understand customers and their businesses better, anticipating their needs and helping them improve the way they use products and services.
Customers use new technologies differently, depending on factors like geography and age. While only half of UK customers look online before buying coatings, 90% of China’s buyers do. UK customers checked out paint colors and prices, while in China they were more interested in design ideas and ratings of suppliers.BAIN & COMPANY