As SAP celebrates its 50th anniversary, also commemorating 50 years of partnership with the chemicals industry, Matt Reymann remains focused on the future.
As Global VP of the Chemical Industry Business Unit (IBU) at SAP, Reymann represents chemicals at SAP while supporting strategic initiatives to move the industry forward, such as the adoption of digital technology to inform business transformation.
At this year’s ASUG Best Practices: SAP for Chemicals event (held Nov. 8–9, virtually), Reymann welcomed attendees and delivered an opening keynote session, which focused on the strategic direction of chemicals and the growing importance of evolution and innovation to one of the world’s most essential industries.
ASUG recently interviewed Reymann to preview the session. This is an edited version of the full conversation.
Question: Your keynote session for the ASUG-SAP Chemicals conference is “The Future of Innovation: How Chemical Companies Are Fighting for the Future!” Why was that the right title for this session?
Answer: Before we talk about the future, let’s reflect on history. The first SAP customer, in 1972, was Imperial Chemical Industries (ICI), a chemical client. Now, 99 out of the top 100 chemical customers run SAP. It’s part of our DNA, and it’s an industry that’s evolving.
The chemistry business touches 96% of all manufactured goods: your phone, your car, your clothes, your shoes, clean water, food packaging, and more. Chemicals were even used in the production of vaccines. If you think about the world becoming healthier, people becoming more productive, and society becoming sustainable, the chemicals industry is the source of that.
So, when we talk about fighting for the future, we’re talking about an industry SAP has been supporting for 50 years, and companies that have been around for over 100 years that have to keep redefining themselves. I started my career at DuPont, which originally made gunpowder; when I started working there in 2012, they were making titanium dioxide (TiO2) and had a crop protection business unit and performance packaging. Ten years later, DuPont has an entirely different portfolio. TiO2 became Chemours; DuPont had the Dow merger and split, crop protection sold to FMC Corp, and the materials division sold to Celanese Corp.
This industry is continuously evolving to better serve society, and there’s a purpose-driven mentality in the industry. The reality is chemistry can solve some of the world's biggest challenges, and the industry is rallying around that. How can we better serve our customers and ultimately better serve society? We’re all here together, looking at how digital can be an enabler of an essential industry for modern-day life.
Q: What trends, challenges, and opportunities do you plan to address?
A: There’s an energy crisis, intense geopolitical activity, demand and supply volatility, commoditization in the market, and a need to drive profitability and growth. I look at some of these macroeconomic trends to determine what’s top of mind for customers; I ask customers what’s keeping their boards awake at night, and they say business transformation, supply chain resilience, and sustainability are top of mind.
More is being asked from our digital leaders; there’s a higher expectation that they’re business experts, digital experts, sustainability experts, and cyber experts. They must have a holistic view because digital is an an enabler of business strategy, helps deal with disruption, and helps identify new business models and growth opportunities. How can these leaders drive profitability of an organization? It comes down to having the right combination of people, processes, and technology as well as the right access to data.
Digitization is not necessarily new to the industry, but I’ll break down a view on what business transformation looks like, focusing on productivity and agility, looking at new business models, and ultimately enabling business strategy.
With the American Chemistry Council, I shared a view of numerous topics, including profitability, sustainability, and resilience. One element of supply chain resilience is that it works in the construct of a business network. Again, the chemistry business touches 96% of all manufacturing goods, so if you look at the interconnectedness of these value chains, how do you address demand supply volatility or a circular economy? You must work in the construct of a value chain. You can’t just be looking in a chemicals silo. You need to understand what's happening to your customers and your customers’ customers, whether that’s the automotive value chain, consumer products, or industrial applications.
From a digital perspective, getting to standard is critical. The first SAP customer was in chemicals; we have a deep footprint, but this left us with legacy systems and very customized processes. As we move to the cloud, where innovation is accelerating, how do you consume new capabilities? You have to get to standard, simplified, and harmonized processes, such as AI/ML capabilities, analytics, and maintenance. This is what we’re delivering now, so it will be one of the strategic levers as companies digitally transform: get to standard, become agile, and consume new technology more quickly.
Q: You mentioned the circular economy and that concept is crucial to embedding sustainability within various industries. What have you observed of the chemicals industry’s progress in terms of sustainability?
A: The emphasis is still on compliance and reporting. That’s top of mind around emissions. With the expectation that requirements ramp up in 2024, companies are looking to make sure they have the right data and processes to report.
Some companies are looking more strategically at sustainability. Eastman Chemicals, a $10 billion company out of Tennessee, is making huge investments in molecular recycling. Eastman is using GreenToken by SAP to support mass balance and tracking as they’re dealing with commingled materials, and they’re looking strategically at embedding sustainability in how they go to market.
Solvay is investing heavily in sustainability strategy; Dr. Ilham Kadri, their CEO, has stated that customers who ignore sustainability will have their “Kodak moment” and be obsolete. She has also stated that chemical leaders must have “one eye on the telescope, one eye on the microscope,” which to me is that same concept around being both profitable and sustainable. If you look at the 17 Sustainable Development Goals (established by the United Nations in 2015), like having access to clean water or sustainable food sources, the industry is supporting all 17 SDGs and looking to SAP to support the underlying data and processes needed to manage that.
If you look at our strategy around sustainability, it’s complex, and there are a number of standards being developed. Sustainability is a journey, not a destination. The strategy is around meeting global compliance regulations. In the keynote, I'll reflect on looking at core business processes, be it logistics or manufacturing, and asking how your decision-making in these areas can impact your business. We support the underlying data and processes to manage that, so that if you’re making logistics or manufacturing decisions, you can understand the impact that those decisions may have on emissions or circularity.
We see sustainability driving decision-making, and we’re moving toward new business models. If you have a new product, how can you design it and reduce CO2 emissions? How can you introduce new grades into your portfolio? SAP can be a part of that; we want to enable that evolution. We speak to customers who are increasing their portfolio of renewable products and asking how they can embed that into the processes of SAP.
Q: What other major takeaways do you want attendees to have?
A: There should be a sense of urgency. This industry has historically been a little slow-moving. Technology’s moving fast and strategizing for years is an eternity in technology. Where can you get started on this journey, be it with sustainability, supply chain resilience, or network? SAP represents collaboration with the industry; we’re about being closely aligned to customers, understanding what the current requirements are, and knowing what future trends of the industry are. We want to do as much listening as we are sharing information. The source of our value has to reflect what’s top of mind for our customers. I’ll try to paint a picture around both business transformation and industry collaboration.