InTech

MAY-JUN 2019

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22 INTECH MAY/JUNE 2019 WWW.ISA.ORG By Duncan Micklem It seems that every software initiative in the energy and chemical industry is now tagged with the name "digitaliza - tion." Yet similar initiatives a few years ago were called Six Sigma or lean manufacturing proj- ects. In essence, they are all focused on opera- tional excellence, but digitalization has risen to the top of the C-suite agenda due to the rapid penetration of new technologies disrupting the way consumers are buying and using everyday products and services. Music and movies are provided as services that learn about your preferences and those of your peers; they used to be sold as a hardware product that you bought and owned. More and more, people are buying products of all kinds from unknown vendors in far-off locations through trusted online marketplaces. They are delivered to your doorstep, so you no longer have to find and visit a local vendor and hope it has stock on hand. Newspapers and magazines are failing as we consume news and entertain- ment in real-time through our phones, and often for free. Our cars are mobile information centers with the intelligence to save us from our own bad driving habits. And we can control our homes and maintain their security remotely. The process industries saw this and feared they would be left behind. In the consumer world, entrepreneurship caused the digital revolution. Consumers ben- efited from improved efficiency and conve- nience, greater social connectivity and personal security, and even elevated status. Minor im- provements in a consumer's experiences have changed suppliers' business models massively and forever—newcomers have entered from nowhere, and some household names that failed to respond are gone forever (think Block- buster, Sears, and Toys"R"Us). Some of our kids are growing up knowing nothing different. The response of the energy and chemical in- dustry is digitalization. In this world, the gains to be had are much more valuable—greater profitability, improved asset performance, and better competitiveness. We can expect much more drastic consequences—hundreds of mil- lions of dollars are at stake, and those who embrace digitalization will prosper. Those who do not respond will indeed be left behind: either consumed by those who do or fatally destroyed in the marketplace. So digitalization is more than just another Six Sigma or lean manufacturing project. It is an Digitalization delivers value Creating a sustained competitive advantage

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