All opinions are my own.

Friday, November 11, 2016

Industry 4.0 (Digitization): Its Benefits to Pharma and Other Chemical Industries

Digital transformation (1), Industry 4.0, is being touted as the manufacturing’s next act and it might as well be. BASF is an aggressive player in the chemical arena. Others are considering their options. McKinsey (2) and PriceWaterhouseCooper (3) are bullish on industries incorporating digital transformation. Virtues of digitization are being discussed. The concept is in its infancy. However, I strongly believe that the chemical industry that includes pharmaceuticals, specialty/fine chemicals, coating, additive, polymers producing companies will benefit significantly from digitization.  

With respect to digitization, my focus is on chemical and physical property information. Benefit of the generated information when diligently used in process development, commercialization and manufacturing could be higher than the EBIDTA suggested in McKinsey report (2).  

I would like to share my perspective of why and how digitization of physical and chemical properties can immensely help process development, scale up and commercialization of every product that is chemicals based. Till Internet came along essentially every supplier company shared physical and chemical properties of the raw materials. If the chemical and physical property data was not readily available much of it could be calculated using thermodynamic principles (4, 5). Chemical and physical behavior postulated using thermodynamics had to be reconfirmed at times in the laboratory but was extremely helpful in developing and designing rather quite efficient processes. Solubilities and mutual behavior could be extrapolated. If the mutual behavior of chemicals was not available it was generated in the lab.

Value of the generated data was enormous as it reduced process development and commercialization time. It also assisted in evaluating and considering different process design parameters and operating conditions to create very near an optimum process that produced quality products from the get go. Due to differences in equipment size and behavior, physical and chemical property data assisted in transitioning from laboratory to pilot plant to commercial scale. All of the property data assisted in troubleshooting and optimizing processes.

As the Internet developed companies stopped sharing physical and chemical properties. Companies did offer Material Safety Data Sheets. Contained information was for safety compliance and had minimum information that could be used for process design. In order to get the necessary data for project feasibility one had to reveal and share significant product and process information. There was hesitation on both sides. Lack of reliable and useful physical and chemical properties meant delays in process development and commercialization (6).

I still recall Exxon’s Blue Book that we used in process design. Data Book of Hydrocarbons by J.B. Maxwell [D. Van Nostrand Company] based on Exxon’s Blue Book was an excellent source in public domain. In mid sixties Hydrocarbon Processing magazine published physical properties of hydrocarbons. All these were of great value.

If the physical and chemical properties and mutual behavior can be digitized and readily available through a central depository, chemists and chemical engineers would be developing best of the best processes and producing quality products. Doing it right the first time would mean significant financial savings from better processes and elimination of waste that requires remediation investment. Commercialization time would also be reduced. For brand pharma, digitization could mean patent life extension. Generics could consider taking advantage of economies of scale to make many drugs affordable.

Mr. Christoph Schmitz, senior partner at McKinsey (1) correctly points that the right kind of talent (combination of chemists and chemical engineers and IT) would be needed for digitization. Chemists and chemical engineers would be assisted by IT personnel to digitize the needed data. It is time for everyone associated with any form of chemical producing and handling company to support Industry 4.0.

Digitized data would assist chemists and chemical engineers to develop and commercialize processes that will have comparatively higher process yield and productivity. Processes would be economic and more sustainable that the current processes. Pharmaceutical could become affordable. Global healthcare costs could be lowered.  

I can imagine improving process yield of the active pharmaceutical ingredient by 20% or more, reducing batch cycle time, using a single solvent instead of multiple solvents and producing a single active isomer if the product had two isomers. Additional benefits will come from significant improvements in inventory turns, asset utilization and product quality management.    

Additives, coatings, resins, polymers and petrochemicals will also benefit from digitized data. Global chemical and chemical engineering associations along with universities and government think tanks could join forces to digitize chemical and physical property data. All said and done digitization has value that has been proven over and over again within the companies who have used it. If the benefits more than trillion dollars value (1) can be realized Digitization, Industry 4.0, is worth the effort.

Girish Malhotra, PE
EPCOT International

  1. Westervelt, Rob, Digital Transformation, Chemical Week, October 17, 2016 pgs. 17-22

  2. Baur, Cornelius, Wee, and Dominik: Manufacturing’s next act, McKinsey & Co. June 2015, accessed November 3, 2016

3.     Industry 4.0: Building the digital enterprise, PriceWaterhouseCooper, accessed November 3, 2016

  1. Dodge, B.F., Chemical Engineering Thermodynamics, McGraw-Hill Book Company, 1944

  2. National Institute of Science and Technology

  3. Malhotra, Girish, Information Challenges for Product, Process Development and Process Design: A Reality Check, Profitability through Simplicity, April 10, 2011