Navigating regulatory compliance in the process industry: What you need to know

Digital twin technology addresses regulatory compliance challenges in the process industry, enhancing efficiency and reducing risks.

In today’s regulated industrial landscape, companies in sectors like oil and gas, pharmaceuticals, chemicals, and food and beverage are facing rising costs while navigating complex regulations. According to the National Bureau of Economic Research, the average U.S firms spends between 1.3% and 3.3% of its total wage bill on compliance – costs that only increase with regulatory changes. With operations spread across multiple sites, staying compliant with evolving regulations can hinder progress and increase risks.

This article explores the common challenges that process industry companies encounter in regulatory compliance, including the increasing complexity of regulations, inefficiencies in outdated processes, and the growing need for accurate, real—time data. It explains why traditional methods are becoming outdated and inefficient in addressing today’s complex regulatory demands, highlighting how innovative solutions, such as digital twin technology, can offer substantial benefits. By addressing these challenges, industry leaders can mitigate risks, enhance operational efficiency, and gain a competitive advantage.

The complexity of regulatory compliance in the process industry

For process industry leaders, managing compliance feels like navigating a maze of evolving regulations and standards. Companies must adhere to a wide range of regulations from various organizations, covering areas such as environmental protection, worker safety, and product quality (National Bureau of Economic Research, NBER).

This complexity is heightened for global operations, where businesses must navigate different regulatory landscapes across borders. Technological advancements bring new compliance considerations, while increasing public scrutiny demands greater transparency and accountability. As operations scale, staying compliant requires constant monitoring of regulatory changes—an ever—growing challenge for companies.

Challenges faced by companies

Evolving regulations

Regulations are constantly changing to address new risks and societal expectations, requiring companies in the process industry to stay vigilant. Adapting to new regulations may require sudden system upgrades, updated training, and adjustments across multiple departments — intensifying the strain on resources.

Operational complexity

Large enterprises frequently manage vast operations, with facilities that can number in the hundreds and span up to 7 million square meters. These diverse processes and products add layers of complexity to compliance efforts. Coordinating compliance across such a broad scale requires meticulous planning and execution.

The cost of staying agile

The pressure to innovate and respond to market changes forces companies to adjust production processes quickly. While crucial for competitiveness, this agility introduces new regulatory challenges, making it harder to keep compliance efforts up to date across all operations.

Data management issues

Many companies still rely on outdated documentation, fragmented CAD systems, and paper records. These information silos prevent integration between departments and systems, making it difficult to maintain a clear overview of compliance status. Manual data handling increases the risk of errors, further complicating compliance efforts and raising the chance of non—compliance.

Achieving compliance goals: Mission impossible

Outdated systems and processes

Many companies still rely on legacy systems without real-time capabilities, making compliance feel reactive rather than proactive. Decisions are often made using outdated information, leading to non-compliance and inefficiencies. These systems are not scalable for modern operations and hinder collaboration by making information sharing across teams difficult.

Resource constraints

Limited staffing and budget constraints add pressure on already stretched teams. Compliance departments may be understaffed, with insufficient personnel to handle growing workloads. Budget limitations restrict investments in new technologies that could streamline compliance, leading to delays in adapting to new regulations.

Organizational resistance to change

Cultural barriers within companies can create resistance to adopting new methods and technologies. Employees may be reluctant due to concerns about the learning curve or fear of job displacement. Without clear KPIs or measurable outcomes, stakeholders may question the value of new compliance solutions, making it harder to secure support and resources for innovations like digital twins.

Technological limitations

Many companies struggle with legacy systems that cannot integrate new compliance tools or technologies. This limits the ability to implement solutions that provide real—time data and analytics, hindering compliance efforts. Cybersecurity and data protection concerns further complicate the adoption of digital platforms.

Limitations of traditional compliance methods

Relying on traditional compliance methods exposes companies to financial penalties, operational disruptions, and reputational damage. Manual inspections are time—consuming and prone to human error, while fragmented systems create disconnected tools that fail to provide a holistic view of compliance. These outdated, reactive approaches only address issues after they arise, making it difficult to stay ahead of evolving regulations. Inefficiencies can lead to delays, supply chain disruptions, and loss of market trust, ultimately impacting profitability and competitive position.

To meet regulatory demands efficiently, companies must adopt innovative technologies that streamline and optimize compliance management. Efficiency and compliance go hand in hand in modern manufacturing. An example of this is Schaeffler and its large—scale 3D scanning initiative, which covered 48% of its factories and resulted in an 80% increase in efficiency—demonstrating the power of digital twin technology in optimizing operations.

By maintaining accurate, up—to—date digital records, manufacturers can simplify audits, reduce inspection times, and avoid costly disruptions—proving that a smooth compliance process is one of the key drivers of operational optimization.

Risks of not adapting to new approaches

Failing to adopt new compliance technology isn’t just risky—it can be financially damaging. Companies that resist adopting innovative solutions, like digital twin technology, may face rising compliance costs due to inefficiencies. According to a Deloitte report, failure to modernize compliance functions can lead to significant operational inefficiencies, higher regulatory risks, and increased costs. Such companies risk falling behind industry leaders who embrace technology, resulting in a competitive disadvantage. Additionally, repeated compliance issues can attract greater regulatory scrutiny, leading to more frequent inspections and stricter enforcement actions.

What are the benefits of embracing digital twin technology?

Our digital twin solution revolutionizes regulatory compliance in the process industry by creating precise virtual representations of physical assets and workflows. This enhanced visibility and control empower companies to streamline operations, improve decision—making, and ensure compliance with ease.

Beyond mitigating risks, adopting cutting-edge solutions like digital twins positions companies as industry leaders, driving innovation and setting new standards in efficiency and reliability.

Enhanced compliance management

NavVis’ digital twins provide up—to—date virtual models of facilities, ensuring accurate, real—time data. This allows for immediate identification of compliance issues, enabling proactive solutions before problems escalate. Virtual inspections reduce the need for on—site visits, streamlining the compliance process and significantly lowering the risk of violations and penalties.

“Integrating this technology into operations streamlines processes—from safety compliance to machinery relocation and audit preparation. It becomes an indispensable tool in maintaining high industry standards.”

— Dr. Florian Kiefer, Senior Vice President Production, Asam beauty

Improved operational efficiency

By centralizing data access, NavVis’ digital twin technology enhances collaboration across teams. Employees from different departments and locations can access the same up—to—date information, improving communication and coordination.

With the use of 3D model visualizations, predictive maintenance becomes possible, enabling companies to anticipate issues before they become critical and to schedule maintenance activities accordingly. Detailed 3D model visualizations also significantly improve maintenance planning. As Florian Kiefer from Asam beauty explains:

“The detailed 3D visualizations make maintenance planning more effective. They allow for necessary clearances to be accounted for and ensure that all components, like stirrers, can be easily accessed and serviced.”

As a result, resource optimization is achieved through better allocation of personnel and assets, leading to increased productivity and reduced operational costs.

Cost reduction

Embracing digital twin technology can result in significant cost savings. Efficient planning reduces operational interruptions, minimizing downtime and helping to identify issues before they result in costly rework and delays. Proactive compliance efforts help avoid costly fines and penalties associated with non—compliance. Additionally, companies can optimize investments in compliance-related initiatives, ensuring capital is used effectively and generating a higher return on investment.

Wrapping up

Regulatory compliance in the process industry presents undeniable challenges, but it doesn’t have to hinder growth and efficiency. Recognizing the limitations of traditional approaches and the risks involved enables companies to make informed decisions about adopting innovative solutions.

Digital twin technology marks a major advancement in compliance management, providing enhanced visibility, operational efficiency, and cost savings—essential factors in today’s competitive landscape. By embracing digital twin technology, companies can mitigate current risks and future—proof their operations for ongoing success.

Ready to make compliance a competitive advantage? Discover how NavVis' digital twin solutions can help your organization overcome regulatory hurdles and achieve operational excellence.