Digital4Clariant SEIZING THE OPPORTUNITIES OF THE DIGITAL TRANSFORMATION IN THE PROCESS INDUSTRIES. Sibylle Mutschler.

Transcription

1 Digital4Clariant SEIZING THE OPPORTUNITIES OF THE DIGITAL TRANSFORMATION IN THE PROCESS INDUSTRIES Sibylle Mutschler Digital4Clariant Pratteln

2 2 Exploration of disruptive innovation by using novel methods grounded in co-creation and design thinking

3 4 Agenda Overview Clariant Digital dynamics and co-creation Agile and design thinking Back-up

4 5 Clariant at a glance A GLOBALLY LEADING COMPANY IN SPECIALTY CHEMICALS Sales 2016 (CHF m) from continuing operations Net result 2016 (CHF m) from continuing operations Business Areas 887 EBITDA 2016 (CHF m) before exceptionals 15.2% EBITDA margin 2016 before exceptionals 140 in companies countries Employees 2016

5 8 Clariant s workstreams reflect major digital opportunities seen currently digital is seen as clear growth opportunity Workstream 1 Workstream 2 Workstream 3 New digital business model development Digital@Operations Big Data and Analytics Workstream 4 Workstream 5 Workstream 6 Cyber security Legal and regulatory framework Program

6 9 Agenda Overview Clariant Digital dynamics and co-creation Agile and design thinking Back-up

7 Some players 10 When talking about transformation it is important to understand which dynamics are changing Until recently: Understanding chemical value chains and their dynamics most relevant Products Raw materials Aromatics Acetic acid Polyphosphoric acid Chlor-alkali Intermediates Arylides Naphtolon Pyrazolones Chloranil Specialty amines Pigments Pigment powders Azo pigments Phthalocyanine Quinacridone Perylene reds Pigment preparations Solid preparations Liquid colorants Pigment paste Masterbatches End customer formulations Printing inks Decorative paints Automotive coatings Packaging and fibers Detergents Industry dynamics Market driven by access to basic raw materials Fine chemicals producers serving different end markets Capacity additions mainly in Asia Small investments by local players Strong growth in emerging markets Value chain focus Major Minor Source: IHS 2011; Clariant team analysis; Value chain is exemplary and illustrative only. Industry dynamics vary a lot depending on type of chemical value chain

8 11 The industry thinks beyond the chemical raw material and product Big data is becoming as important as chemistry for us Stefan Oschmann Chairmann of Executive Board & CEO Source: public statement

9 12 Sees the potential of high-speed processes benefitting the customers BASF applies big data in catalyst research - We reached a factor of 3 reduction in cycle times from customer request to the first promising product proposal Dr. Frithjof Netzer Senior Vice President BASF 4.0 Source: public statement

10 13 And is faced with customers deciding in a data-driven way We are about to have MORE data, and MORE compute, than any time in history. We have worthy problems. We WILL have worthwhile answers. Linda Clement-Holmes CIO of Procter & Gamble At P&G, predictive analytics formed a vital component of all significant decisions which had a bearing on sales and margins Source: public statement

11 Players 14 Disruption? Clariant observes that the dynamics in our value chains change Digitalization can connect different players and even the final consumer With e. g. digital start-up Raw materials Intermediates Chemical products End customer formulations Manuf. Retail Consumer Cost Efficiency Speed Cost Efficiency Speed Cost Efficiency Speed Cost Efficiency Speed Cost Efficiency Speed Example: Croda and Cutitronics

12 Players 15 This happens at all steps in the value chain even classical joint development agreements get a digital component Raw materials Intermediates Chemical products End customer formulations Manuf. Retail Consumer Cost Efficiency Speed Cost Efficiency Speed Cost Efficiency Speed Cost Efficiency Speed Cost Efficiency Speed

13 Players 16 Players in data services value chains, tech value chains enter the chemical ecosystem maybe even as competitors - making partnering and co-creation more complex Raw materials Intermediates Chemical products End customer formulations Manuf. Retail Consumer Cost Efficiency Speed Cost Efficiency Speed Cost Efficiency Speed Cost Efficiency Speed Cost Efficiency Speed

14 17 Agenda Overview Clariant Digital dynamics and co-creation Agile and design thinking Back-up

15 18 The corporate dilemma

16 19

17 12 km from Muttenz Old pump factory Agile Sprints Team set-up within four weeks Off-site 3-5 days a week Immersion boards decide

18 12 km from Muttenz Old pump factory Sprints Sorting ideas solving customer frictions Checking proposal to pitch an idea to so-called immersion board Evaluating one of more than 17 customer visits Team set-up within four weeks Off-site 3-5 days a week Immersion boards decide

19 12 km from Muttenz Old pump factory Sprints Innovation Master Black Belt IT Business partner Head of Digital4Clariant Project manager and design thinking expert BU Global Marketing Manager BU Application Development Manager Team set-up within four weeks Off-site 3-5 days a week Immersion boards decide

20 23 Give people a work environment to think in a different way Small, but powerful teams Embrace collaboration Test assumptions early Have the agility of a start-up: sprints One page business plan Minimalist prototypes Pitch ideas: the shark tank Allow people to take risks Cope with failure

21 24 Working and deciding in sprints Relieves from the burden of the large upfront corporate commitment Gradually increases the maturity of an idea Allows to manage the risk of failure We recommend it! Shall we go beyond our companies? Beyond our industries?

22 25 Challenges which might be of interest in the context of cooperation with designthinking teams Cyber security and security innovation Digitalization, supply chain, sustainability Digital skill-building concepts Cross-company data transfer from and to (legacy) systems Co-innovation teams of noncompeting companies Looking forward to discussion!

23 26 Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. This presentation also includes forward-looking statements. Because these forward-looking statements are subject to risks and uncertainties, actual future results may differ materially from those expressed in or implied by the statements. Many of these risks and uncertainties relate to factors that are beyond Clariant s ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behavior of other market participants, the actions of governmental regulators and other risk factors such as: the timing and strength of new product offerings; pricing strategies of competitors; the Company s ability to continue to receive adequate products from its vendors on acceptable terms, or at all, and to continue to obtain sufficient financing to meet its liquidity needs; and changes in the political, social and regulatory framework in which the Company operates or in economic or technological trends or conditions, including currency fluctuations, inflation and consumer confidence, on a global, regional or national basis. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document. Clariant does not undertake any obligation to publicly release any revisions to these forwardlooking statements to reflect events or circumstances after the date of these materials.

24 27 Agenda Overview Clariant Digital dynamics and co-creation Agile and design thinking Back-up

25 28 We can see the chemical value chains and the whole chemical system as we know it change Potential areas could be Consumer goods Agriculture Personalized products and services in direct contact with retailers and end consumers (e.g. laundry, cosmetics) Disintermediation by sophisticated attackers to support farmers in making better usage of inputs (e.g. seeds, fertilizer, machinery) Specialty chemicals Base chemicals Expansion of current product business into service and solution business (e.g. catalysts, process chemicals) Few suppliers with relatively high industry utilization make any form of disintermediation very unlikely

26 29 Current China Focus In China digital efforts are still very top-down and mainly driven by global MNC s. Benefits of digitalization are not yet realized, only anticipated. Government issued Intelligent Manufacturing Development Plan ( ), encouraging (petro)chemical industry to develop Intelligent Manufacturing Chemical companies listed in the demonstration list issued by MIIT (Ministry of Industry and Information Technology) in 2015 and 2016 are: o Sinopec (Sinopec Jungian and Sinopec Zhenghai) o Wengfu Group (phosphates) o Sinofert (fertilizer) o Anhui Jiangnan Chemical (explosives) o Luxi (fertilizer) o Shandong Dongyue (fluorine chemical) o China Coal Shaanxi Yulin Energy Chemical Co., Ltd. (coal chemicals) o Xinjiang Tianye (chlor-alkali)

27 30 Patents: General Digitalization Overview Global vs. China Digital Patent Filings in the Chemical Industry (global applications referring to all digital topics) Reliance Sabic Akzo DSM Monsanto BASF Dow Bayer DuPont Sinopec Additional Insights Out of all Chinese chemical industry players, Sinopec seems to be the strongest player in China s digital development. In China, only Huawei files more patents than Sinopec Source: Netherlands Office for Science & Technology (NOST) in China; He-Ro Analysis

28 31 Spotlight: Some improvement dimensions in operations Plant smartification Production steering Advanced robots Assistant systems Additive manufacturing Digital factory design Integrated product development Data driven quality control Predictive maintenance High resolution supply chain Smart warehouse Digital plant logistics Automated replenishment Cloud based industrial services

29 Examples What it means 32 Many companies including Clariant have built-up resources and set-up org structures to capture the opportunities of digitalization Decentralized model Centralized model Hybrid model Excubator model BU BU BU BU BU BU CDO 2 BU BU BU CDO DE 3 BU BU BU DE D 1 D D D D D Digital embedded into BUs/functions Digital activities integrated into existing businesses/functions Development of distinct BU-specific digital strategies and independent execution Digital centralized in Center of Excellence Central definition of digital strategy and steering of digital transformation Execution driven by COE in collaboration with BUs/functions Digital anchored at multiple points within the organization Allocation of digital activities driven by different objectives Central steering of digital transformation with BUspecific efforts where appropriate Digital separated from core businesses Digital activities managed as a stand-alone business Protected breeding ground for disruptive activities 1 D = Digital team; 2 CDO = Chief Digital Officer / Digital council / Digital center of competence 3 DE = Digital Excubator; Source: Clariant

30 33 And a new job world is emerging illustrating the transformational character Operations Digital Business development/marketing Legal Customer experience design Digital Transformation Big data & analytics HR digital workplace Source: LinkedIn June 2017