Post on 11-Mar-2018
Sibylle Mutschler
Digital4Clariant
Pratteln
20.09.2017
Digital4Clariant
SEIZING THE
OPPORTUNITIES OF THE
DIGITAL TRANSFORMATION
IN THE PROCESS
INDUSTRIES
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Digital4Clariant - SPIRE Conference – members only 2
Exploration of disruptive innovation
by using novel methods
grounded in co-creation and design thinking
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Overview Clariant
Digital dynamics and co-creation
Agile and design thinking
Back-up
Agenda
Digital4Clariant - SPIRE Conference – members only 4
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Clariant at a glance
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Business AreasNet result 2016 (CHF m)
from continuing operations
Sales 2016 (CHF m)
from continuing operations
5847 263 4
17442EBITDA 2016 (CHF m)
before exceptionals
15.2%887EBITDA margin 2016
before exceptionals
140 in 53companies countries Employees 2016
A GLOBALLY LEADING COMPANY IN SPECIALTY CHEMICALS
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Clariant’s workstreams reflect major digital opportunities seen currently – digital is seen as clear growth opportunity
Digital4Clariant - SPIRE Conference – members only 8
New digital business model
development
Workstream 1
Digital@Operations
Workstream 2
Big Data and Analytics
Workstream 3
Cyber security
Workstream 4
Legal and regulatory framework
Workstream 5
Program
Workstream 6
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Overview Clariant
Digital dynamics and co-creation
Agile and design thinking
Back-up
Agenda
Digital4Clariant - SPIRE Conference – members only 9
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
When talking about transformation it is important to understand which dynamics are changing
Source: IHS 2011; Clariant team analysis; Value chain is exemplary and illustrative only. Industry dynamics vary a lot depending on type of chemical value chain
Products
▪ Aromatics
▪ Acetic acid
▪ Polyphosphoric
acid
▪ Chlor-alkali
▪ Arylides
▪ Naphtolon
▪ Pyrazolones
▪ Chloranil
▪ Specialty amines
▪ Azo pigments
▪ Phthalocyanine
▪ Quinacridone
▪ Perylene reds
▪ Solid preparations
▪ Liquid colorants
▪ Pigment paste
▪ Masterbatches
▪ Printing inks
▪ Decorative paints
▪ Automotive coatings
▪ Packaging and fibers
▪ Detergents
So
me
pla
ye
rs
Industry
dynamics
▪ Market driven by
access to basic
raw materials
▪ Fine chemicals
producers serving
different end
markets
▪ Capacity additions
mainly in Asia
▪ Small investments
by local players
▪ Strong growth in
emerging markets
Raw materialsEnd customer
formulationsIntermediates
Pigments
Pigment powdersPigment prepara-
tions
Minor
Major
Value chain focus
Until recently: Understanding chemical value chains and their dynamics most relevant
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The industry thinks beyond the chemical raw material and product
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“Big data is becoming as important as chemistry for us”
Stefan OschmannChairmann of Executive
Board & CEO
Source: public statement
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“BASF applies big data in catalyst research -
We reached a factor of 3 reduction in cycle times from
customer request to the first promising product proposal”
Dr. Frithjof NetzerSenior Vice President
BASF 4.0
Sees the potential of high-speed processes benefitting the customers
Source: public statement
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Linda Clement-Holmes CIO of Procter & Gamble
And is faced with customers deciding in a data-driven way
At P&G, predictive analytics formed a vital component of all significant decisions which had
a bearing on sales and margins
We are about to have MORE data, and MORE compute, than any
time in history. We have worthy problems. We WILL have
worthwhile answers.
Source: public statement
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Disruption? Clariant observes that the dynamics in our value chains changeDigitalization can connect different players and even the final consumer
Manuf.
RetailConsumer
Cost
Efficiency
Speed
Cost
Efficiency
Speed
Cost
Efficiency
Speed
Cost
Efficiency
Speed
Cost
Efficiency
Speed
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Raw
materials
End customer
formulationsIntermediates Chemical products
Pla
yers
Example: Croda and Cutitronics
With e. g. digital start-up
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
This happens at all steps in the value chain – even classical joint development agreements get a digital component
Manuf.
RetailConsumer
Cost
Efficiency
Speed
Cost
Efficiency
Speed
Cost
Efficiency
Speed
Cost
Efficiency
Speed
Cost
Efficiency
Speed
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Raw
materials
End customer
formulationsIntermediates Chemical products
Pla
yers
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Players in data services value chains, tech value chains enter the chemical ecosystem maybe even as competitors - making partnering and co-creation more complex
Manuf.
RetailConsumer
Cost
Efficiency
Speed
Cost
Efficiency
Speed
Cost
Efficiency
Speed
Cost
Efficiency
Speed
Cost
Efficiency
Speed
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Raw
materials
End customer
formulationsIntermediates Chemical products
Pla
yers
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Overview Clariant
Digital dynamics and co-creation
Agile and design thinking
Back-up
Agenda
Digital4Clariant - SPIRE Conference – members only 17
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
The corporate dilemma
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Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
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12 km from Muttenz Old pump factory Agile Sprints
Team set-up within four weeks Off-site 3-5 days a week Immersion boards decide
12 km from Muttenz Old pump factory
Evaluating one of
more than 17
customer visits
Sprints
Sorting ideas
solving customer
frictions
Checking proposal
to pitch an idea to
so-called
immersion board
Team set-up within four weeks Off-site 3-5 days a week Immersion boards decide
Project manager
and design
thinking expert
IT Business
partner
Innovation Master
Black Belt
Head of
Digital4Clariant
BU Global
Marketing
Manager
12 km from Muttenz Old pump factory
BU Application
Development
Manager
Sprints
Team set-up within four weeks Off-site 3-5 days a week Immersion boards decide
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Give people a work environment to think in a different way
Small, but powerful teams
Embrace collaboration
Test assumptions early
Have the agility of a start-up: sprints
One page business plan
Minimalist prototypes
Pitch ideas: the shark tank
Allow people to take risks
Cope with failure
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Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Working and deciding in sprints
Relieves from the burden of the large upfront corporate commitment
Gradually increases the maturity of an idea
Allows to manage the risk of failure
We recommend it!
Shall we go beyond our companies? Beyond our industries?
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Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Challenges which might be of interest in the context of cooperation with design-thinking teams
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Cyber security and security innovation
Cross-company data transfer from
and to (legacy) systems
Digital skill-building concepts
Digitalization, supply chain,
sustainability
Looking forward to discussion!
Co-innovation teams of non-
competing companies
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Disclaimer
Digital4Clariant - SPIRE Conference – members only 26
This presentation contains certain statements that
are neither reported financial results nor other
historical information.
This presentation also includes forward-looking
statements. Because these forward-looking
statements are subject to risks and uncertainties,
actual future results may differ materially from those
expressed in or implied by the statements.
Many of these risks and uncertainties relate to
factors that are beyond Clariant’s ability to control or
estimate precisely, such as future market conditions,
currency fluctuations, the behavior of other market
participants, the actions of governmental regulators
and other risk factors such as: the timing and
strength of new product offerings; pricing strategies
of competitors; the Company’s ability to continue to
receive adequate products from its vendors on
acceptable terms, or at all, and to continue to obtain
sufficient financing to meet its liquidity needs; and
changes in the political, social and regulatory
framework in which the Company operates or in
economic or technological trends or conditions,
including currency fluctuations, inflation and
consumer confidence, on a global, regional or
national basis.
Readers are cautioned not to place undue reliance
on these forward-looking statements, which speak
only as of the date of this document.
Clariant does not undertake any obligation to
publicly release any revisions to these forward-
looking statements to reflect events or
circumstances after the date of these materials.
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Overview Clariant
Digital dynamics and co-creation
Agile and design thinking
Back-up
Agenda
Digital4Clariant - SPIRE Conference – members only 27
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
We can see the chemical value chains and the whole chemical system as we know it change
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Consumer
goods
Agriculture
Specialty
chemicals
Base
chemicals
Potential areas could be
Personalized products and services in direct contact with retailers
and end consumers (e.g. laundry, cosmetics)
Disintermediation by sophisticated attackers to support farmers in
making better usage of inputs (e.g. seeds, fertilizer, machinery)
Expansion of current product business into service and solution
business (e.g. catalysts, process chemicals)
Few suppliers with relatively high industry utilization
make any form of disintermediation very unlikely
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Current China Focus
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In China digital efforts are
still very top-down and
mainly driven by global
MNC’s. Benefits of
digitalization are not yet
realized, only anticipated.
Government issued “Intelligent Manufacturing Development Plan (2016-2020)”,
encouraging (petro)chemical industry to develop Intelligent Manufacturing
Chemical companies listed in the demonstration list issued by MIIT (Ministry of
Industry and Information Technology) in 2015 and 2016 are:
o Sinopec (Sinopec Jungian and Sinopec Zhenghai)
o Wengfu Group (phosphates)
o Sinofert (fertilizer)
o Anhui Jiangnan Chemical (explosives)
o Luxi (fertilizer)
o Shandong Dongyue (fluorine chemical)
o China Coal Shaanxi Yulin Energy Chemical Co., Ltd. (coal chemicals)
o Xinjiang Tianye (chlor-alkali)
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Patents: General Digitalization Overview – Global vs. China
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“Digital” Patent Filings in the Chemical Industry 2010-2015 (global applications referring to all digital topics)
0 50 100 150 200
Sinopec
DuPont
Bayer
Dow
BASF
Monsanto
DSM
Akzo
Sabic
Reliance
Additional Insights
Out of all Chinese chemical industry players,
Sinopec seems to be the strongest player in China’s
digital development.
In China, only Huawei files more patents than
Sinopec
Source: Netherlands Office for Science & Technology (NOST) in China; https://www.ip-watch.org; He-Ro Analysis
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Spotlight: Some improvement dimensions in operations
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Plant smartification Integrated product development
Smart warehouse
Data driven quality control
Predictive maintenance
High resolution supply chain
Digital plant logistics
Advanced robots
Digital factory design
Cloud based industrial services
Automated replenishment
Production steering
Assistant systems
Additive manufacturing
Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
Many companies including Clariant have built-up resources and set-up org structures to capture the opportunities of digitalization
Digital embedded into
BUs/functions
• Digital activities
integrated into existing
businesses/functions
• Development of distinct
BU-specific digital
strategies and
independent execution
Decentralized model
BU BU BU
D1 D D
Digital centralized in Center
of Excellence
• Central definition of
digital strategy and
steering of digital
transformation
• Execution driven by COE
in collaboration with
BUs/functions
Centralized model
BU BU BU CDO2
Digital anchored at multiple
points within the
organization
• Allocation of digital
activities driven by
different objectives
• Central steering of digital
transformation with BU-
specific efforts where
appropriate
Hybrid model
BU BU BU
D D D
CDO DE3
Digital separated from core
businesses
• Digital activities managed
as a stand-alone
business
• Protected breeding
ground for disruptive
activities
Excubator model
BU BU BU DE
1 D = Digital team; 2 CDO = Chief Digital Officer / Digital council / Digital center of competence3 DE = Digital Excubator; Source: Clariant
Wh
at
it m
ea
ns
Ex
am
ple
s
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Sibylle Mutschler, Digital4Clariant, Pratteln, 20.09.2017
And a new job world is emerging illustrating the transformational character
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Source: LinkedIn June 2017
Operations
Big data & analytics
Digital Business development/marketing
Customer experience design
Legal
HR digital workplace
Digital Transformation