John Blyzinskyj is the CEO of Elemica, a global enterprise software company that provides products for global process industries including oil and gas, specialty chemical, bulk primary chemical and extrusion pharmaceutical companies, as well as plastics, the tire and rubber industry, and food processing.
Elemica is the number one provider of products they offer, which surrounds the digital transformation of global supply chains for their customers. Due to the nature of the industry they serve, their customer base consists of large, global Fortune 500 corporations, including companies such as Shell and BP.
The software solutions that Elemica provides help to improve the efficiency of their clients’ global supply chains, which are very complex in nature. This allows their clients to control and significantly improve efficiency, as well as gaining more traceability and visibility of how their supply chain is running.
We spoke with John about the digital transformation process, its importance, and Elemica’s expertise and global span.
How important is it that a company undergoes a digital transformation for its supply chain?
When you look at our customer set, which includes large chemical producers, you may wonder why our clients want to go through something called “digital transformation” – this means digitising every element in the process of the supply chain, such as knowing where their orders are, knowing where their feedstock is in terms of the supplies they are ordering, knowing their production capacity and efficiency, and tracking where their products are in the delivery cycle in terms of digitising the orders. If they can trace with accuracy, they can improve the efficiency overall as opposed to relying on paper, excel spreadsheets or phone calls – if this all becomes digitised in the process, they can gain significant improvements such as reducing wasted time. We can significantly improve the management of their finances across their supply chain.
Our customers have become increasingly more focused on this process over the last few years, especially as this can be the difference between being able to predict and manage the production capacity in their manufacturing plant or not. The importance of this is improving the overall efficiency of the supply chain working capital.
Are there any differences in the supply chain and how this is managed between different industry sectors?
There are major differences in the process industry and discrete manufacturing, and the solutions we offer are attuned to the needs of these unique processes. Discrete manufacturing involves manufacturing physical things such as cars, planes, computers and industrial goods. Process manufacturing involves, for example, large bulk fluids, gas, and liquids.
Within the discrete industrial sectors, the services are made-to-order: the company will rapidly produce the product once it’s been ordered. In the process industries, they have very large-scale process environments and very large distillation sites, often in rural locations. These are incredibly capital-intensive, as they have to run these manufacturing sites all the times, rather than in a batch process. In this case, they need a very efficient supply chain to ensure that all the raw materials they get at the front end of their production facilities are always available, but don’t carry excess stock either—hence the need for the kinds of solutions that we offer. When they are shipping to their customers, which can be varied and on a global scale, they need to make sure that they are also delivering in a timely fashion.
What are the benefits of a cloud-based network?
Now more than ever, software companies are providing their products in the cloud environment through the internet – this has been a rapidly increasing trend over the last 10 years. Since the beginning, we have always delivered our products via the cloud. The advantages of this for our customers is that we are much more dynamic in the way we deliver the software. With a cloud-based environment, when we produce product updates and patches, we can upload it to the cloud, deliver it to customers in real-time, and continually update it. Our customers are always getting the latest software, compared to when updates or new developments need to be installed manually, which is incredibly inefficient. The other component of cloud-based delivery is payment, as they pay for it in terms of a Software as a Service or ‘SaaS’. What this means is that instead of paying a large fee for a piece of software which you then own the license for, our customers pay a small fee per month or per quarter, and then they have the right to continually use the software. This is a lot less financially draining for our customers, and as they use the software, ideally their business will be thriving and they can then use the profits from their operations to pay for the use of our software, creating a cashflow advantage.
The third advantage is that you can establish how much software you need, and are then able to customise it to work more closely for what is required from the service, which isn’t possible when you pay for one whole service upfront.
Since the beginning, we have always delivered our products via the cloud. The advantages of this for our customers is that we are much more dynamic in the way we deliver the software.
What are your ambitions for Elemica in the year ahead?
We tend to look longer-term into the future, and the reason we do this is that our customers are generally operating on a long-term timeframe. When they build a new facility or product, they are looking 10 – 20 years ahead in terms of how they use production capacity or how they are selling their product. We emulate this timeframe focus in order to assist them on their long-term projects.
We process close to $600 billion worth of commerce through our software product every year. That equates to about a million business transactions across our client set a day. Across the process industry sector that we cover, we have relationships with 90 out of the biggest 125 process industry clients, and we are by far the biggest within our defined sector.
The overall commerce value is growing at about 20% per year, which would make it to close to $700 billion in about 12 or 13 months from now. Our medium-term goal is to reach a trillion dollars of commerce flow through our network, and at this rate, we should be there in around 3 years.