With annual sales of more than 12 billion euros and almost 16,000 employees, polymer maker Covestro has 30 sites across Europe, Asia and America, eight of them production facilities. “We’ve been making polymers since the 1930s,” said Rich Guhl, director of global process automation.=
“We develop state-of-the-art polymer materials that can do more. We help to push boundaries by supplying innovative and sustainable products, technologies and solutions for key industries and modern life. We think we can make the world a better place by doing what we do best.”
Guhl shared his company’s journey into data leverage and the Industrial Internet of Things (IIoT) during a press conference this week at the Emerson Global Users Exchange. Covestro is organized in three divisions. The polyurethanes division makes the raw materials for rigid and flexible foams. Polycarbonates sells granules and sheets for a wide variety of applications. The coatings, adhesives and specialties division manufactures more than 2,600 different materials. Plus, Covestro supplies basic chemicals for its own operations, producing enough chlorine to make it one of the world’s leading chlorine producers, explained Guhl.
Covestro faces five big challenges along the value chain as a result of its European location.
1. First is the feedstock disadvantage. “If you go to the Gulf Coast or the Middle East, you see an abundance of feedstock,” said Guhl, “but not in the EU.”
2. Because of the feedstock locations, the chemical industry clusters outside of the European Union, where feedstock is more readily available.
3. EU regulations for the chemical industry have increased by 56% since 2008, driving up costs in Europe and creating an uneven international playing field, especially compared to China and the Middle East, explained Guhl.
4. The EU’s manufacturing base is shrinking. “Our products go to other manufacturers,” explained Guhl. “When they’re disappearing, that’s a disadvantage to us.”
5. There’s also been a shift in demand. “Our products are expected to be more sustainable and environmentally friendly,” he said.
Covestro’s approach to digital manufacturing started with three horizons of implementation.
1. Optimize supply. “We wanted to innovate how we do daily business, from predictive maintenance and end-to-end supply chain,” said Guhl.
2. Leverage growth. “Then we had to innovate how customers do business with us,” explained Guhl. “For the customer experience and channels, it meant getting more in tune with customers.”
3. Start a new game. “We needed to make business models digitally enabled,” said Guhl. “How would Google run our business?”
To optimize supply, Covestro needed to put data into context and make it actionable, with an initial focus on three categories of data-driven improvement aimed at reducing costs, ensuring safety and increasing uptime/improving quality. “If we can accomplish this, it will enable end-to-end supply chain and improve our own operation. Standardization and strong partnerships are the foundation.” Emerson is one of the key partners for Covestro’s process automation, he explained.
Covestro has created partnership models with varying levels of value delivery. Lower-level partnerships typically are asset-focused, while higher-level partnerships encompass plant or system performance. Further, Level 1 partnerships might rely on break-fix maintenance, while Level 2 represents on-premise maintenance services. Level 3 includes connected services via IIoT, and Level 4 outcome-based services.
“At some plants, we’re not ready to move up, so we have a joint program with Emerson to migrate to Delta V, and then we can upgrade to more system-based performance increases,” explained Guhl. “Our long-standing wish list includes plug-and-play for devices and package units; seamless data integration; auto-updated plant documentation; built-in IT security; sharing data and services beyond own enterprise; and leveraging joint expertise of Emerson and Covestro.”