Chemical Manufacturing Moving to Ends of the Spectrum

The Institution of Chemical Engineers (IChemE), a global professional membership organization for people who have an interest in and experience in chemical engineering, triennially holds an event, Advances in Process Control 9 (APC 9). This year’s event will be September 19-21 in York in the United Kingdom.

The event is described:

It is well understood that good quality process control and automation is fundamental to all aspects of operability, quality, reliability, safety, sustainability and viability. Indeed, for an existing plant, it is often the case that additional instrumentation and innovative utilisation of control and automation are the only practicable and cost effective means of realising change and improvements. That is especially so in a cost conscious environment: when budgets are constrained, resources are stretched, assets are being sweated like never before, and the bottom line is sacrosanct.

Emerson’s Chris Hamlin and Chip Rennie will be presenting at this event. Chris will be one of the keynote speakers and Chip will share his experiences in helping process manufacturers’ energy management initiatives.

I asked Chris if he could provide me with a draft of his presentation, so I could share a few tidbits with you. He will share some thought-provoking ideas that the quest for product quality in chemical manufacturing is diminishing. Market forces are driving chemical manufacturers to one of two ends of the spectrum—either low-cost suppliers or agile, service-based, specialty manufacturers.

Low-cost suppliers are fewer in number but growing larger in production volume. They manufacture commodity products located close to the feedstocks. Prices are dictated by commodity markets and they sell to anyone offering market price. From a production standpoint, the goal is not quality, but to be as close to the specifications as possible in order to minimize production costs. Reducing product variability often incurs additional costs in energy usage, raw materials, labor, and other associated costs.

At the other end of the spectrum, agile chemical manufacturers are smaller and more modular. Production is engineered to meet custom specifications. The production facilities tend to be located closer to the consumer of the end products and are integrated into the supply chains. The production facilities are extremely flexible to meet new orders. Costs are contained using techniques such as just-in-time production, lean manufacturing, and remote plant operations.

Agile chemical manufacturers think of quality not as an end, but as a means to drive consistency and reduce the cost of meeting the order specifications and timeframes.

The market dynamics moving chemical manufacturers to these ends of the spectrum are forcing reassessments of their business models. Strategy development for low-cost suppliers begins with thoughts of, “Sell what you can make most efficiently” by examining locations, production volumes, global reach, automation technology, and integration of similar processes.

For a service-based, agile manufacturing approach, strategy starts with, “Make what you can sell most cost effectively” and requires a close assessment of R&D capabilities, application know-how, opportunity spotting across industries and geographies, and patent-protected production technologies.

Chris will share some specific examples of how chemical manufacturers have adjusted their business models to move toward the ends of the spectrum. Technologies and service capabilities from automation suppliers play a key role in the transition of the production processes.

Chris and Chip hope to see you at Advances in Process Control 9 to discuss your perspectives of this ever-changing business climate.

MP3 | iTunes

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