Estonian chemicals company aims for competitive edge through factory logistics

Chemi-Pharm is an Estonian manufacturer of allergen-free chemical products that exports most of its production to 17 countries. The product selection consists of hundreds of products and covers many different needs in the highly demanding medical sector. The operation requires a lot of transferring ingredients between production stages. Chemi-Pharm participates in the L4MS (Logistics for Manufacturing SMEs) programme to find out how automation and robotised intra-factory logistics could increase efficiency while allowing human workers to focus on activities with higher added value instead of logistical tasks.

Chemi-Pharm produces chemicals, which requires frequent movement of different quantities of ingredients around the factory. In case necessary components are not available at the production stage where they are needed at the right time, operations are temporarily interrupted, a major productivity impediment.

Demographic trends in Estonia show that recruiting competent workers will become a pressing issue over the next decade. From a business point of view, advanced and automated processes will provide the efficiency needed for competitiveness, enabling increased production without increasing the workforce.

What needed to be achieved?

Chemi-Pharm’s objective is to reduce the workforce in intra-factory logistics and to achieve better and on-time movement of necessary ingredients inside the factory.

Direct financial gains would not be significant, but huge benefits would rise from smooth movement of raw materials and finished goods. Due to the nature of Chemi-Pharm’s manufacturing process, even small time gains can lead to big efficiency gains, for example in changing products between shifts. Also, operations would not have to be paused for delayed raw material replenishment at the production machines. A more high-tech work environment will also help attract new employees.

During the L4MS experiment, Chemi-Pharm teamed up with two L4MS partners: Finnish System Integrator KINE to help produce a 3D model of the new factory and Estonian Competence Center IMECC to demonstrate the interaction of OPIL with an Automated Guided Vehicle in their testing facility. 

Virtualised factory for cost-effective design testing

The project was executed using the Industrial IoT platform OPIL (Open Platform for Innovations in Logistics) together with a 3D simulation tool (Visual Components). OPIL provides connectivity between human workers and equipment for optimal material handling on the factory floor. Virtualising the logistics process and testing enables cost-effective deployment of configurable human-robot logistics solutions.


IMECC researchers demonstrating how an AGV executes simple logistical tasks via OPIL

In the Pilot Application Experiment, a 3D digital twin of the factory was created in a simulation system to better streamline the production process. It focused on high-level planning of the entire factory, robot route planning and monitoring, as well as task creation and monitoring.

Efficiency for better competitiveness

The Pilot Application Experiment had three main goals: less logistics-related downtime, better on-time material delivery and averting personnel shortage.

During the experiment, Chemi-Pharm has gained insights into how to improve material flows and their new factory layout, as well as what kind of equipment to invest in. The company has also formalised their data structures. The learning process will be continuous and there will be further ideas on how to increase logistical and operational efficiency without increasing the workforce.

3D model was created by KINE, a digital twin designed to test and optimize the logistical solution


The 3D models developed in the context of the experiment will help streamline processes further and identify cost-cutting possibilities while reducing the lead times of equipment preparation.

The knowledge accumulated from the L4MS programme will help the company plan for increased profitability and gain an edge over its less automated competitors.


Read more: "Estonian chemicals manufacturer eliminates production bottlenecks at new factory"



  • How to reduce logistics-related downtime
  • How to improve on-time material delivery
  • How to deal with foreseeable personnel shortage


  • IT system design
  • Factory layout and process design through virtualisation
  • Equipment selection and testing


  • Insights into production design
  • Increased understanding of requirements for automation
  • Process development


Partners in the Experiment

Manufacturing company


Competence Center resposible of testing OPIL components in a testing facility 


System integrator, responsible for the 3D simulation


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