Chemical Makers Embrace the Cloud

Its significant potential advantages are spurring increasing adoption

By Seán Ottewell, Editor at Large

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Use of Internet-based information storage and services — the so-called cloud — instead of traditional direct connection to servers is gaining adherents in the chemical industry — and, thus, challenging traditional conservative information technology (IT) habits, notes Lauren McCallum, solutions manager, industry business solutions — chemical, SAP, Philadelphia. Indeed, companies including Dow Chemical, BP and BASF are rapidly expanding their adoption of cloud-based applications — and reaping substantial benefits.

For example, Dow Chemical, Midland, Mich., says it has saved over $85 million as a result of the improved supply-chain visibility offered by cloud-based services.

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The importance of this was highlighted for the first time when Storm Bill approached Texas in June 2015. The company quickly was able to identify 5,900 railcars in the storm’s impact zone. This allowed Dow to warn customers of any potential delivery problems well in advance and, for critical deliveries, to arrange for shipping from other locations. Similarly, when a cargo ship caught fire in 2016, it took Dow’s supply chain team less than ten minutes to determine what containers were on the vessel. Again, the company alerted customers and organized alternative supplies.

Dow also is using three cloud-based Oracle applications to improve its human resources (HR) operations. Together, the three form the backbone of the company’s HR analytics system that delivers real-time personnel data throughout the company to enable matching people with the most appropriate jobs.

For its part BP, London, has been working with Amazon Web Services (AWS) over the last few years to improve the efficiency of its workplace practices. In 2016, the company decided on a fully cloud-based strategy. Using AWS tools and services, BP recorded a 30–40% reduction in the total cost of IT hosting even before the system was fully optimized.

Ensuring Security

Nevertheless, for any cloud-based activity, security remains key. “The cloud would be unthinkable without security. By outsourcing data and applications to the cloud, companies entrust the authorization to use their data to the external cloud provider. Before doing that, they need to define their own compliance security guidelines,” stresses a spokeswoman for BASF, Ludwigshafen, Germany.

For BASF, this means that any cloud provider must pass a security assessment for the classification needed before processing company data. This ensures compliance with security criteria including encryption and periodic security updates as well as contractual agreements such as the location of jurisdiction and data-privacy regulations.

The company’s involvement with different cloud environments has enabled it to retire and consolidate IT infrastructure. “For example, we have leveraged the facilities of our former onsite data center for the new BASF supercomputer,” she says. (For details on the company’s plans for the supercomputer, see “Digitalization Drives Development.”)

Two current projects particularly are benefiting from using cloud infrastructure.

The first is a joint project with SAP to evaluate digital cooperation with business partners. This involves the SAP Asset Intelligence Network, a collaborative network that brings together information from manufacturers, service providers and plant operators in a cloud-based platform. “The goal is to establish a fully integrated and centrally located asset information repository. With this single source of truth for asset information, it is intended to further improve the efficiency of engineering and maintenance processes throughout the asset lifecycle,” she explains.

The SAP Asset Intelligence Network allows BASF to collaborate with its customers in a digital ecosystem and manage smart devices in the industrial Internet of Things (IIoT). The evaluation project likely will run for several more months and is part of the BASF 4.0 digitalization initiative.

A second example of cloud use is an online platform named Lab Assistant (Figure 1) developed by BASF’s Dispersions & Pigments Division. This tool helps customers find the right chemicals for their own products. The cloud platform provides information about BASF’s dispersions and additives portfolio, e.g., pH levels and viscosity, or regulatory status in a given country. Customers also can find recommendations for decorative paints, including formulations or active ingredient calculations.

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