Innoboard: Digital transformation affects all industries and companies. How does the digital transformation impact the chemical industry and Wacker Chemie AG?
Dirk Ramhorst: Whether at home, in the media or in the office, digitalization is on everyone’s lips. Many industries, such as media and tourism, have been utterly transformed by digitalization – and of course, this trend does not stop at the chemical industry.
Digitalization is not totally new to the chemical industry, especially since many production facilities are already automated or controlled via digital processes. And we can already see some initial positive results: Accenture recently conducted a study among 360 executives in the chemical industry in 12 countries, and found that 95% claimed to have achieved measurable financial added value by implementing digital technologies. And personally, I believe the vast potential of digitalization is far from being exhausted!
Against this background, I’m pleased to report that digitalization is already in full swing at WACKER and opening up myriad opportunities: digital technology is enabling hitherto undreamt-of connectivity along the value-creation chain, from subcontractors to logistics and production, right through to customers (horizontal integration). We stand to make substantial efficiency gains by applying big data to production – using sensors in predictive maintenance, for example. Virtual reality and advanced simulations can provide better support for research and product development. Moreover, big data can help customers understand each other better and communicate more effectively to create new business models.
Digitalization will help us to remain competitive and at the cutting edge of industry. That is why WACKER sees digitalization as an opportunity more than anything else.
In your role as CDO and CIO at Wacker Chemie AG, where do you see the biggest potential of digitization for Wacker Chemie AG and what are the biggest hurdles you have to overcome to harness that potential?
As a chemical company with more than 20 production sites globally, a major focus for WACKER lies on ways to digitalize our production, supply chains, logistics and R&D. Digital tools can ideally support our processes – ranging from complex, enhanced self-learning data-analysis processes (in research, for example), to continuous online tracking of shipments to customers, through to smart control and simulation processes that enhance plant capacity or prevent leaks in the event of component failure.
On the other hand, the company also needs to make internal changes if digitalization is to be both comprehensive and successful. Our focus is primarily on our employees: what prerequisites do we need to achieve to ensure that digitalization becomes the standard at WACKER? And this, of course, is a major challenge for any organization.
How do you spread an innovative, digital mindset amongst your employees?
Our ultimate aim is for digitalization to become an integral part of WACKER’s culture. That is why it is so important to us to actively get employees from across WACKER on board. That’s why we launched a Group-wide initiative called “WACKER Digital”: this program systematically evaluates the opportunities and threats posed by new technologies and their relevance to WACKER.
The program acts as a framework for both existing projects and new digital projects in the Group, and its main action areas include communication within our organization and the digital transformation journey.
How do you make sure you develop the right materials to help your customers develop innovative products?
Customers are becoming digitally more mature and expect the same of their partners. WACKER is therefore working to improve our customers’ digital experience – on the internet and with apps, for example – since this will enhance customer loyalty along our general sales channels and beyond. Examples include personalized sales pitches and localizable content, new, fully integrated software for better customer relationship management, and improved digital product searches on the WACKER website, which allow customers to easily filter results according to their requirements.
And of course, looking beyond digitalization, we can claim that R&D and innovation have always been held in high regard at WACKER. The high proportion of our budget going toward R&D makes us one of the most research-intensive chemical companies in the world. With excellent researchers and developers on five continents, plus specialized cooperation with over 25 global research facilities, innovation at WACKER is highly methodical and therefore makes a decisive contribution to sustainable success – for the company and our customers alike.
Wacker Chemie AG collaborates with many startups. How do you master the challenges of successfully integrating the ideas and technologies of startups into the WACKER ecosystem?
Generally speaking, we think that close cooperation with young and innovative companies can be a stimulus for our business – when creativity is pointed in the right direction, many developments soon result in successful business activities.
When it comes to actually working with start-ups, the type of cooperation can differ significantly. On the one hand, we support start-ups with our broad technology base and worldwide market expertise in areas that include scale-up and R&D. On the other hand, we serve start-ups as a supplier, manufacturer and even customer. We also have various examples where we have conducted joint research projects with young companies. Generally speaking, the ways in which we cooperate and integrate ideas vary from case to case.
How will WACKER chemicals shape the future?
The chemical industry is a key contributor to the success of many other industries through its products and innovations. Regarding the global challenges of the future, WACKER focuses on regenerative energy technologies and optimized energy storage. Other priorities include the efficient use and sustainable conservation of raw materials, and developments for healthy, sustainable living.
Through the development of polymer-based thermal insulation systems, for instance, we are helping improve insulation and therefore reduce energy consumption and CO2 emissions from heating systems. Developing new polysilicon qualities and improving manufacturing processes are essential factors in reducing the production costs of solar cells and making solar-based electricity generation more competitive. Our development of new silicone encapsulation compounds for LED light sources supports energy-saving measures in lighting applications – LED lights manufactured in this manner require up to 80% less energy than normal light bulbs! We are using metabolic engineering to manufacture natural materials in a reproducible manner, thus eliminating the need for animal-based raw materials – this is what we have done in the case of cysteine, for instance. And these are just a few examples!
What are your digital transformation goals for Wacker Chemie AG over the next 12 months?
For us, digitalization is about further developing our current, very successful business model. We are encountering many new issues that will change business processes and improve our working world. Digitalization is just one aspect, but it can play a huge role in productivity, security, quality and customer satisfaction.
When it comes to digitalization, people often confuse the means with the ends. For us, it is important that we not focus solely on digital technology. That is why we are also looking to processes and change management. After all, digitalization has a strong influence on our working world, on how we work and how we interact with each other. That’s why our major goals now are to actively involve all of our employees in our digital journey, to initiate a company-wide dialog and to create a digital mindset.
Because in the end, we want our customers, suppliers and employees to continue to see WACKER as their first choice – in every respect!
About the interviewee:
Dirk Ramhorst was born in Bielefeld, Germany, and has degrees in software engineering and in business administration and economics from the University of Kiel, Germany. He worked for 20 years in different positions at BASF and Siemens. In 2013, he was the first Chief Digital Officer (CDO) to be named in the German DAX (top 30 public-listed companies). In September 2016, he joined WACKER as CDO and CIO, and has headed the IT department since then.