leading the digital transformation in chemicals the digital... · basf ghg emissions world 1990...
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Leading the digital transformation in chemicals W. Alex Marvin
November 2019, FICO World2019-111
About me
◼ 2013 PhD chemical engineer
◼ 2013 joined BASF
Current role: Operations Research Manager in a global data science team
Location: NA Headquarters in NJ
Co-creates solutions with internal businesses
Builds web-based prescriptive analytics tools
Leads scalable application frameworks
2019-112
BASF – We create chemistry
◼ Our chemistry is used in almost all industries
◼ We combine economic success, social responsibility
and environmental protection
◼ Sales 2018: €62,675 million
◼ EBIT 2018: €6,033 million
◼ Employees (as of Dec 31, 2018): 122,404
◼ 6 Verbund sites and 348 other production sites
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BASF’s segments
Chemicals
Petrochemicals
Intermediates
Materials
Performance Materials
Monomers
Industrial Solutions
Dispersions & Pigments
Performance Chemicals
Surface Technologies
Catalysts
Coatings
Construction Chemicals
Nutrition & Care
Nutrition & Health
Care Chemicals
Agricultural Solutions
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Source: PwC Strategy&
Digital transformation is expanding in waves
across industries and value chains
Transformation
Waves
Starting point
of digital
transformation
Media
Retail
Hotel
Transport Health
Farming
Automotive
Utilities and Energy
Process Industry
2010 2015 20202000 2005
Telco
Computing
Power & Data
Digitization of Production
Digitization of Services
Digitization of Distribution
Digitalization of Media & Marketing
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Digital solutions
Predictive
Maintenance
Augmented
Reality
Process Optimi-
zation by Big
Data
Vertical
Integration
Digital Plant
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How the competitive environment of BASF developed
We are the only chemical company with a full end-to-end portfolio across the chemical value chain, mastering the
complexity of the process industry.
Reliance
Valu
e C
hain
1980
Oli & Gas
Petro-
chemicals
Commodities
Specialities
Crop protection
Plant-Biotech
Pharma
BASF
DuPont
Shell
Hoechst
Bayer
Dow
ICI
2018
BASF
Syngenta Chemchina
Conoco
Invista DowDuPont
Shell
Clariant
Celanese
Solvay
AkzoNobel
AstraZeneca
Sabic
Sinopec
LyondellBasell
Valu
e C
hain
Lanxess
Covestro
Bayer MonsantoRhone
Poulenc
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▪ BASF is committed to contributing to the
Paris Climate Agreement
▪ Key measures:
Process improvements
Operational excellence measures
Shift to CO2-neutral power
Portfolio development
▪ Development of new, breakthrough
technologies with impact beyond 2030
CO2-neutral growth until 2030: Creating value to society
and protecting our climate
1990 1995 2000 2005 2010 2015 2020 2025 2030
Global GHG emissionsAssumed policy
shift → 2°C scenario
BASF business
as usual
Target:
No increase
of GHG
emissions
Absolute greenhouse gas (GHG) emissions
indexed (1990 = 100)
BASF GHG
emissions
World 1990
36.4 billion tons
BASF 1990
40.1 million tons
Carbon
management
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A highly interconnected supply chain – complexity management is at
the heart of BASF
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End Product A
End Product B
End Product C
Suppliers
Target
industries /
CustomersBASF
Raw Material A
Raw Material B
10
Goal: One common solution for medium- & long-term integrated planning
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Supply
Production
Demand
What is the margin effect of a long-term raw material shortage?
What are the optimal production quantities at a potential site?
Can the value chain handle a “low price – high volume strategy” for a product?
What is the impact of different raw material cost developments?
How much extra capacity is needed to fulfill a sales plan target?
What is the margin and volume flow effect of a new product introduction?
Scenario examples
11
Application SILOS – Before FICO Xpress Insight
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FICO Xpress Insight platform
Business Logic
Business Logic
Model/Solver
Application 2Application 1
Model/
Solver
Solution Developers and Administrators
❖ Duplication of development efforts, lack of synergies and limited knowledge
sharing in all phases of application lifecycle
❖ No consistent standards for key aspects such as security, database management
reporting across applications
❖ Development resources are hard to interchange due to siloed environments
…..
Users and Key Stakeholders
➢ Inconsistent user experience
➢ Widely varying application
capabilities
➢ No centralized administration.
➢ Lack of a common solution platform
can result in increased time to
market, reduced investments and
missed opportunities
A Sustainable optimization platform with FICO Xpress Insight
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Model/Solver
Business Logic
FICO Xpress Workbench
Model/Solver
Business Logic Business Logic
Scenario
Database
FICO Xpress Insight Platform
Reporting
Database
Application 1 Application 2
Third Party Software
Model/Solver
Application 3
Benefits✓ Unified app
development/deployment using
Xpress workbench
✓ Scenario management, rapid
prototyping and other great
features
✓ Centralized administration,
monitoring for all applications
✓ Excellent integration with 3rd party
tools including databases,
reporting and analytics
✓ Easy web app development
providing consistent, secure and
seamless end user experience
Data SourcesUser Web Application
Application Server
Develop and
Deploy
LDAP
Administration
Benefits of using FICO Insight for optimization
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Foster a collaborative
approach between
stakeholders
Model complex
constraints
Rapidly build
production ready
business solutionsHelp handle
complexity
Enable
information
transparency
KOH 45%
B 163050 A50
150 m³
B 165060W1000
75 m³
B 1660CL 1400
150 m³
Reactor 2C 1200
EntsalzungR 1250
StrippungCL Blending
R 1275
B 165550A14075 m³
B 1500Swing
WS75 m³
B 1645Cl Gas 9
75 m³
B 1635B 55
75 m³
B 1640IL 308
75 m³
B 1665Swing WI
75 m³
B 1505Swing WI
75 m³
Reactor 1C 1100
B 160575 W270
75 m³
R 1175TB Blending
B 1615TB 150
150 m³
B 1620TB 195
100 m³
B 1610TB 120
300 m³
1 2 3 4
DEG
EO
PO
FilterF 1250
VE-Wasser
DEG
EO
PO
Starter
Starter
Additives
Linie 1000
Linie 1200
GebindabfüllungBulkabfüllung
Single platform for
modelers, data
experts and web
developers
steer the choice of a scenario
to be operationalized
Production
Data RecipesCustomer
Demand
Business
RequirementsProduction Planning
Production schedule is generated
to support detail planning
Scenario
ManagementOptimization
toolResults are basis for
tactical decisions
monitor the accuracy of the model
based on a continued tracking of
model results / reality
Establish a common data foundation – “Single
Source of Truth”
Adapt model to changing
business conditions
Improved user experience and interaction between
business partners and optimization experts
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Deployed solutions
◼ Surfactants supply chain
◼ Citrus products value chain
◼ Synthetic lubricants scheduling
◼ Construction chemicals global procurement
◼ Catalytic converter global production allocation
◼ Precious metal recycling planning and contract optimizer
◼ Global strategic capital investments
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Business unit feedback
◼ Sustainability: Our previous tool was not easily updated with SAP data, not supported with documentation, and the developer was no longer at BASF. It required a lot of manual data manipulation, and thus was hard to update the tool.
◼ Alignment: Our process engineers are agreeing that the tool is becoming increasingly descriptive of their plant. This way our S&OP meetings align more closely with operations.
◼ SAP data improvement: Now, almost all data is maintained in SAP and sync’d with the tool. We identified some SAP data to improve on (e.g. packaging line rate)
◼ Better schedules: Now, we can account for scheduled downtime
◼ Scenario exploration: We explored different preferences for reactor modes, which allowed us for the first time to quantify the benefit of being able to quickly switch reactor modes. This has motivated a new automation project.
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Conclusions
◼ Interconnected supply chains require coordinated decision making
◼ FICO Xpress Insight enables BASF
Faster from problem to deployed solution
Advanced analytics made visual and intuitive
Business answers in minutes rather than months
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www.basf.com/digitalization