Energizing innovation to accelerate value leadership in chemicals... Abdurrahman Atiqullah

Transcription

1 Energizing innovation to accelerate value leadership in chemicals... Abdurrahman Atiqullah Lead Principal & Industry Digital Transformation Leader, Energy & Resources Saudi Arabia & Bahrain

2 If you always do what you always did, you will always get what you always got. Albert Einstein 2

3 Global observations in the chemicals industry are... 1 Increase in competition due to globalization. 4 Incomplete/slow market insights. 2 Changing regulation, rising protectionism & increasing geopolitical uncertainty. 5 Growth of M&A and global partnerships. 3 Compression of commoditization cycle. 6 Industrial digitalization. 3

4 ... increasing the pressure to adopt a mindset change and transform beyond the convention... Aspect 1: Deliver customer outcomes, not products Aspect 3: Compete as an ecosystem Aspect 2: Simplify to shrink cycle time Aspect 4: Increase marketdriven strategic agility 4

5 Macro View Now and onwards, innovation in chemicals is a must for driving value leadership in the market... Early adopters of new technologies are winning by focusing on digital innovations. Successfully using new technologies will be the foundation for digitalization and innovation. Significant value will be created by embracing new digital technologies. Digitalization & innovation will revolutionize the chemicals industry. 58% Of chemical companies are embracing digital to gain competitive advantage 1 94% Of chemical executives expect to increase investment in digital capabilities 2 Of 87%: say that those companies that don t embrace digital will lose their competitive edge and may face extinction 2 The Value addition due to Digitization in Chemicals cumulated for period 2016 to 2025 ranges from $310-$550 billion Digitization has potential to reduce CO 2 emission by million tonnes, save lives and avoid injuries over the next decade 3 Sources: 1 & 2 Accenture Global Digital Chemical Survey, Accenture "Digital Transformation Initiative: Chemistry and Advanced Materials Industries report published by the World Economic Forum (WEF) in collaboration with Accenture 4 Demystifying digital marketing and sales in the chemical industry, McKinsey, 2017 Digital can give chemical companies the power to unlock more than $200 billion of new value by reducing cost to serve, improving pricing, and, for fast movers, capturing growth from competitors. 4 5

6 Micro View... and maintaining robust operations in the realm of performance pressures. Expected EBITDA margin improvement from digitalization (%) 2% 4% 5% 9% 3% 5% PwC - 5% to 9% potential in total EBITDA* improvement for chemical companies. Procurement Manufacturing Operations SGA Total cost reduction Advanced analytics Digital procurement planning with suppliers Robotics Automation Digital demand forecasting linked to customer order systems Predictive maintenance Increased facility and energy efficiencies Digital performance maintenance Back-office automation Organizational structure improvements via workforce span-of-control efficiencies Decreased cost to serve customers Enhanced marketing Targeted marketing driven by advanced data analytics Solutions uplift Increased pricing power driven by solutions provider sales approach Total revenue uplift Total EBITDA improvement Revenue uplift Cost reduction *EBITDA Earnings before interest, tax, depreciation, and amortization Sources: PwC Chemical Industry Trends Delivering profitable growth in a hypercompetitive, low-growth world. 6

7 However, innovation in chemical businesses is faced with fundamental questions on direction, mechanisms, and outcomes... Where do we start?and, what do we focus on? Do we need to make a large up-front investment? How can we integrate digital in everything we already do? How soon can we expect to see real outcomes? How can we scale our innovations across our businesses? 7

8 And, challenged by today s status-quo technology barriers... Technological innovation Emerging, disruptive technologies and processes Predictive quality Smart products Digital twin Connected manufacturing Predictive maintenance Connected logistics ERP ERP and back-office business systems Enterprise assets Enterprise assets and OEM equipment at customer sites 8

9 So, how does the industry renovate the innovate through digital for value leadership?... 9

10 Name inspired by renaissance painter, sculptor, architect, engineer, and philosopher Leonardo da Vinci. With an estimated IQ of over 220, this universal and prolific genius possessed the imaginative power to create pioneering inventions in a wide range of disciplines. 10

11 Vision: beyond running businesses better (improve & optimize), towards driving transformational outcomes (differentiate & innovate). Bi-Model Growth System Mode 1 improve & optimize Mode 2 differentiate & innovate 11

12 The digital innovation system that enables you to innovate at scale to confidently redefine your business... Design Thinking Services Data Intelligence Analytics SAP Leonardo Technologies Blockchain Internet of Things Machine Learning Big Data SAP Cloud Platform Microservices Open APIs Flexible Runtimes Integration Multi-Cloud Infrastructure SAP Data Center 12

13 Industry Innovation Types... enabling innovation for products, processes, and furthermore business models in our chemical s industry. 1. Product Innovation Industry 4.0 enabled products and solutions. Extended product and solution portfolio 2. Process Innovation Adaptive logistics Resilient production Energy management Predictive maintenance and Service 3. Business model innovation Serving the segment of one Performance and usage-based contracting and billing R&D Sales & Marketing Supply Chain Manufacturing Aftermarket Service Procurement Finance Human Resources 13

14 ... comprising comprehensive coverage for the leverage of digital technologies within and across... Connected Products Connected Assets Connected Fleet Connected Infrastructure Connected Markets Connected People Product Insights Fixed Asset Insights Mobile Asset Insights Building Insights Market Insights Work Goods & Equipment Manufacturing Execution Logistics Safety Construction Rural Areas Health & Sports Supply Networks Manufacturing Networks Logistics Networks Energy Grids Urban Areas Homes Components Coffee Makers Vending Machines Coolers Drills White Goods Other low value / high volume things Machines for fabrication, assembly or packaging Wind Turbines Large Drives Generators Vessels / Tanks Pumps Other high value / low volume things Cars Trucks Rail Aircraft Ships Construction Machines Containers & HUs Other moving things Commercial Buildings Pipelines Utility Grids Telecommunication & Data networks Data centers Other networked things Retail Spaces Public Spaces Farms Cities Other spaces Humans 14

15 So, what would be some of the spotlight industry applications that showcase the power of using Leonardo for innovation? 15

16 Digitalization in Manufacturing - Manufacturing Automation Challenges SAP Digital Manufacturing * Benefits 23% 99.5% Lot Size One Quality Requirements Improvementin OEE First Pass Yield Variability Manual Processes 15% Increase in Product Throughput 30% Faster Order Creation Connected Assets Plant Connectivity Smart Data Streaming Digital Twin Rapid Innovation IT-OT Convergence S/4HANA Manufacturing Execution Suite HANA Product Network Traceability Connecting production systems to core business processes with an end-to-end visibility 16

17 Digitalization in Logistics Networked Logistics Challenges SAP Networked Logistics Hub * Benefits -5min 2x Manual Efforts Shipment Delays Sense Act & Respond Waiting Time/Truck* Increase in Cargo Handling* Location Transparency Turnover of Goods Goods Throughput Improved Efficiency Situation Analysis Geo-tracking Intelligent Messaging Digital Collaboration Wrong Decisions Inter- Organizational Collaboration S/4HANA Less Environmental Impact Optimized Hub Traffic Optimize across the ecosystem with real-time transparency, SAP Networked Logistics Hub 17

18 Digitalization in Facilities Energy Optimization Challenges SAP Connected Energy Infrastructure * Benefits Outages & Disruption Manual Efforts Micro Generation Electric Vehicles Smart Homes Prosumers Maintenance Costs Higher Asset Utilization Energy Storage Renewable Energy Smart Meters Smart Grid Regulatory Compliance Growing Competition Grid Stability Customer Satisfaction Lack of visibility Lost Revenue Predictive Maintenance S/4HANA Asset Intelligence Network Energy Analysis & Management Cloud Platform / SAP HANA Platform IT / OT Integration (Cloud for Energy) Reliable Service Higher Sustainability Optimize energy usage and overall plant / facility consumption to increase overall utilization efficiency 18

19 Digitalization in Maintenance - Predictive Maintenance Challenges SAP Predictive Maintenance & Service * Benefits Underutilization of assets Late awareness of issues Maintenance Cost Condition Monitoring Emerging Issues Detection (EID) Machine Health Control Center (MHCC) Vibration analysis (VA) Unplanned Downtime View on Past Availability and Utilization Fewer Warranty Claims OT Integration Insight Provider Failure Analysis & Prediction EAM Integration Distributed Data Lack of Process Integration S/4HANA HANA SAP Hybris Service Replacement Decisions Insight and Usage Behavior SAP Predictive Maintenance & Services, optimize asset performance along their lifecycle 19

20 Digitalization in Operations Asset Collaboration Challenges SAP Asset Intelligence Network * Benefits Lack of Collaboration Outdated Job Instructions Revenue Stream Cost Savings Asset Information Quality No Common Definition Insight on Customer Base Customer Satisfaction Supplier and Operator Network Secure Infrastructure Global Equipment Registry Shared Model Database No Standardized Data Model Information Silos S/4HANA Sharing of Work Activities Establish Channel to Operators SAP Asset Intelligence Network, a network to bring together business partners for critical industrial operations 20

21 And, the value increases greater than the sum of its parts with extended integrated use cases... 21

22 ... reaching to maximizing digital innovations in a digital chemical plant. Procurement Automation & Self-Service Spend & Predictive Analytics Procurement Cloud Supplier Collaboration Plant Digital Asset Management & Maintenance Digital Worker Contractor Management Safety & Environment Monitoring Digital Operating Procedures IT / OT Convergence Wireless Connectivity & Devices Enterprise Agile, Modular Architectures Enterprise Data Hub & Analytics Digitized Business Process Models Digital HR & Talent Collaboration Sales & Marketing Next Generation CRM Dynamic Price & Margin Management Digital Marketing & Commerce Connected Consumer Sales Enablement Predictive Analytics & Demand Sensing Supply Chain Asset Utilization & Tracking Supply Chain Control Tower Intermodal Logistics Visibility Reliability Services Block Chain Warehouse Robotics 22

23 Innovation for material outcomes depends also on the power of engagement through unconventional yet business-aligned enablers... 23

24 ... with an engagement model that supports express as well as deep-dive engagements... 1 Explore Design Thinking Leonardo Innovation Services - Express Fast Engagement 80% Solution Bundles 2 Deliver 3 Innovation Accelerators /Software & Services 8 Weeks Discover, Design & Prototype Solution Bundles Leonardo Innovation Services Deep Dive Engagement Innovate on SAP Leonardo technologies and the full SAP Portfolio 12+ Weeks 2 3 Deliver Enterprise Digital Blueprint / Industry 24

25 And, continuously happening innovation at our SAP Centers of Innovation... A global network to help our Customers Partners Startups Universities B E R L IN In their digital transformation journey PA L O A LT O PA R I S N E W Y O R K H E I D E L B E R G S E O UL IoT Analytics Big Data Machine learning Blockchain B A N G A L O R E Supported by our partners S A O L E O P O L D O Experience spaces Tangible showcases System integrators Software solution providers Technology partners IoT sensor and machinery partners End-to-end offerings 25

26 And, all underpinned by our unmatched foundation of SAP s chemical expertise. 97 of the top 100 global chemical companies run SAP software: 6 of the 6 most innovative chemical companies 10 of the 10 most profitable chemical companies 19 of the 20 top diversified chemical companies 6,700+ chemical customers in 97 countries All lines of business supported on a single platform Deep, industry-specific capabilities Embedded preconfigured best practices Clear Industry road map 89% of the chemical companies in the Forbes Global 2000 are SAP customers 26

27 Key Take-aways External dynamics forcing the chemicals industry to transform... scouting to drive value through innovation. Digital technologies that can intelligently connect people, things, and business are key enablers for innovation in industry 4.0 The Next Future. Comprehensive innovation system solution aspects coupled with unconventional, business-aligned enablers are SAP s differentiators. 27

28 We look forward to innovating together... Abdurrahman Atiqullah Lead Principal & Industry Digital Transformation Leader Energy & Resources Saudi Arabia & Bahrain

29 ... which integrates and packages today s transformational technologies, made for business and industrial applications... Internet of Things Analytics Big Data Machine Learning Connecting things with people and processes Insights that enable transformative actions Manage vast amounts of big data Intelligence enabled by learnings from data Connected products, assets and fleets to drive the Industrial IoT Connected infrastructures, markets and people to enable the Internet of Everything All-analytics across your business Embedded machine learning New processes and applications based on insights Distributed storage and computing Real-time insight discovery Insights embedded into business processes Intelligence embedded into enterprise applications Integrated intelligence to solve common business challenges Train and deploy deep learning models Blockchain Data Intelligence Blockchain services embedded into business applications Put data into business context Trusted, real-time benchmarks Increased trust in peer-to-peer transactions Full visibility of goods provenance and history of ownership Decision-making scenarios Data asset monetization Increased auditability and decreased fraud 29

30 Before we divulge into its industry applications, let us have a glance on the Leonardo technical orientation... SAP Leonardo Bridge SAP Leonardo Edge Technical Services SAP Leonardo Foundation Data Management Business Services Streaming Persistence Business transactions Device Management Connectivity Messaging Aggregate store Times series store Data archive Thing model (digital twin) Application Development Re-use UI and APIs Predictive and machine learning Analytics SAP Cloud Platform Analytics Mobile Machine Learning Integration 30

31 And, how Leonardo innovations are placed within SAP s overall solution space... UI Layer (SAP Leonardo Bridge) PEOPLE Enterprise Management The DigitalCore Procurement R&D Supply Chain Planning Manufacturing Logistics Sales After Sales Service FROM PROCESSES TO NETWORKS SAP Leonardo Apps Network Log. Hub Connected Goods Track & Trace Connected Mfg. Vehicle Insights Predictive Main. Asset IntelligenceNetwork SAP Leonardo Edge Computing SAP Leonardo Foundation SAP Cloud Platform / SAP HANA Platform Things / Physical Layer PRODUCTS THINGS 31

32 The value curve grows exponentially in generating valued insights and impactful outcomes when innovation is scaled wider... Thing to Insight Insight to Action Action to Outcomes SAP Predictive Maintenance and Service Condition monitoring alerting vibration analysis predictions SAP Asset Intelligence Network Up-to-date service documentation Spare parts and replacement Performance benchmarking Real-time visibility of shop floor operations SAP Connected Manufacturing, Digital twin Monitoring product performance and taking action SAP Predictive Maintenance and Service Digital twin for Connected manufacturing Real-time visibility of shop floor operations; intelligent production Asset operator Manufacturer Service technician One-stop shop for the manufacturers, service providers, and operators of the world s assets SAP Asset Intelligence Network Order of replacement parts and services from a business network SAP Ariba and SAP Fieldglasssolutions 32

33 Let us see how it has worked at one of our globally leading chemical customers... 33

34 BASF has innovated digitally across their business... Augmented Reality 1 2 Customer Experience Connected Worker 3 Predictive Maintenance Advanced Computer 4 5 Modeling for Plant 4.0 Ecosystem Partnership for Lightweight Connected Pallets Enables customers and partners to discover products on augmented reality mobile apps Activate interactive content with camera Learn about product details and value proposition Browse other applications of the product Tablet app to complete plant safety checklist dos Workers can download process information for easy access on the tablet To assist with planned shutdowns workers can scan a QR code and document current asset status with a photo Utilizes sensors and live data on operating conditions Reduces unplanned repairs and equipment failures Optimizes coordination of maintenance and production processes Advanced computer modeling is used to forecast how much steam and waste heat production plants supply at the site The program has improved forecast for steam demand by 60 percent, and also supports BASF in price forecasts for electricity trading Developed in collaboration with Ahrma Holding B.V. Pallets sealed with new smart coating are 25% lighter than traditional pallets Coating increases durability and extends service life of the pallets up to 10 years Pallets contain a connected transponder enables customers to track and trace movement and temperature 6 Social Business Collaboration 7 Control Tower 34

35 And, many others across are also accelerating their innovation journey... Improve fleetproductivity & transparency 15% Reduction in driver turnover in the first year Improved Talentdevelopment and driver safety Digital operations - increased performance (-7% cost, +19% net margin, +25% dividend) Improve fleet utilization, efficiency and transportation services Increased safety andsecurity in truck parking Increased transactionvolumes through new saleschannels Improve servicelevels for customers & new business model Real time operational surveillance of well performance on HANA Up to 30%improvements in reporting speed Optimized maintenance 3 5% increase equipment and production efficiency 100% FloodReduction Industrie 4.0 AwardWinner 99.5% First Pass Yield 100% Track and Trace Innovation ininsurance Telematics 100% Improvementon Speed of information retrieval & reliability of data send to ERP Building innovativeapplications based on the data of connectedtrailers Increased adoptionof mobile app Higher customerloyalty and satisfaction Increase Forklift operator safety and real time insights Made in China 2025 pilot project MES on HANA Increasedproduction by 25% - Integrated to thousands of sensors and equipment Improved service levels,higher efficiency and productivity Better Patient Engagement Diabetes connectedkit 8-10% reductionin maintenance costs Efficient Supply chain & cost reduction with predictive forcontainer Repositioning Better customerservice, reduce carbon footprint and pay per usemodel Real time costing increases efficiency Energy apps lower spend based on powercontracts Visibility into customer s fitnessfootprint and workout habits using IOT. Engage Better and Growrevenue 35

36 SAP provides a robust framework approach for engaging in Leonardo innovation exercises. 1 Explore Discover, Design, Prototype 2 7 Scale Up (optional) 6 New Ideas Deliver 3 5 Operate Implement 4 36

37 ... supported by established accelerators across the Leonardo solution categories... Connected Products Connected Assets Connected Fleet Connected Infrastructure Connected Markets Connected People Product Insights Fixed Asset Insights Mobile Asset Insights Building Insights Market Insights People and Work Product & Project Network* Engineering Control Center Product Lifecycle Costing Ariba Sourcing Asset Intelligence Network Predictive Maintenance & Service Work Manager Ariba Advanced Supply Chain Automation Vehicle Insights Predictive Maintenance & Service Asset Intelligence Network Real-Estate Cockpit Cloud for Real-Estate Plant Maintenance Energy Management* Ariba Procurement Customer Activity Repository Connected Goods Connected Marketing Knowledge Workspace* SAP JAM Goods & Equipment Manufacturing Execution Logistics Safety Construction Rural Areas People and Health Connected Goods Manufacturing Execution Transportation Safety* Project Management Vehicle Insights Connected Goods IBP for response & supply Hybris Billing Manufacturing Integration & Intelligence Plant Connectivity Connected Parking EHS dangerous goods Track & Trace Yard Logistics Predictive Maintenance Connected Agribusiness* Connected Worker Supply Networks Manufacturing Networks Logistics Networks Energy Grids Urban Areas People and Homes Supply Chain Control Tower Track & Trace* Ariba Advanced Supply Chain Automation Manufacturing Integration & Intelligence Global Batch Traceability Track & Trace* Distributed Manufacturing* Track & Trace* Yard Logistics Warehouse Management Networked Logistics Hub Vehicle Networks Predictive Maintenance Asset Intelligence Network Manufacturing Integration & Intelligence Networked Logistics Hub (Ports) Smart Traffic Connected Parking Connected Homes* (Insurance) * future scope 37

38 Key Take-aways (Continued) High Tech Consumer Products Retail Manufacturing Industry Knowledge Sports & Entertainment Chemicals Travel & Transportation Cloud Big Data AI & Machine Learning Blockchain Analytics IoT Digital Technologies Digital Twin Unconventional Methods SAP Leonardo Innovation Services Discovery Workshop Design & Prototype Business Case Technical Blueprint ac cel er a tor Fixed price Accelerator bundles of necessary expertise, data and software integrated to solve a specific and common business problem, plus the services to get started and deliver business value quickly Utilities Industries with Innovation Services 38

39 Next step: conduct an ideation workshop together 1. Define the focus and value area 2. Strategize use cases 3. Build the concept and innovation roadmap 4. Visit SAP Leonardo Centers in Paris. 39

40 Welcome ابحرم 41