The spectrum of digital transformation
"It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change."
This quote is often attributed to Charles Darwin, from his book On the Origin of Species. However, my research indicates that it was Louisiana State University professor Leon C. Megginson who used it at a convention of the Southwestern Social Science Association in 1963. In 1964 Megginson published an article in the journal “Petroleum Management.,” which is interesting given what I want to suggest.
If you replace the word "species" with the word "companies," and I think it perfectly expresses the digital transformation happening today in all industries, not just Oil & Gas.
"It is not the strongest of COMPANIES that survive, nor the most intelligent that survives. It is the one that is most adaptable to change."
Make no doubt about it, the digital transformation of refining is upon us. It is the most important journey that a company can take today. According to McKinsey[1], Digital Transformation results in:
- 10-40% Reduction in Maintenance Costs
- 10-20% Cost of Quality Reduction
- 30-50% Reduction in Downtime
- 45-55% Productivity Increase
Downstream refining and petrochemical producers strive to achieve superior performance through better management of their energy usage and costs, optimization of their process yields, reduction or elimination of safety-related incidents and improved operator performance. Technology is changing & companies need to adapt to survive. As Leon C. Megginson stated, the SURVIVOR is the one that can adapt and change! Here is an overview of the technologies that will change refining.
Which technology is right for you?
Unfortunately, this is the wrong question to be asking. Here are some of the correct questions:
- What problems do you want to address?
- Do you want to start with the operations lifecycle or the asset lifecycle?
- Do you want to start big, or start small?
- Do you have executive sponsorship?
There are so many different ways to start your digital transformation journey, and just as many destinations. You must lead with your needs, not technology. Any digital transformation should start by finding a problem that needs to be addressed and matching the appropriate technology to help solve that problem. Picking a technology and them finding a problem that it fixes is seldom successful. It usually leads to much anxiety and poor results.
There is no right answer for everyone if comes do to where your company wants to be on the digital transformation spectrum
- Cloud-based Process Design: Cloud computing offers several opportunities to reduce costs in process design by leveraging an almost infinite processing power and storage available through cloud-based architecture. Process design can accelerate while also reducing capital investment costs for process modeling and training. Oil and gas producers can spin up cloud-based servers and computing resources as needed. This also accelerates the flow of information throughout process design. Through a cloud-based architecture for process design information accessibility is increased, availability is enhanced and total cost of ownership (TCO) is significantly reduced.
- Digital Planning and Operations: Integrated petrochemical production networks are highly
complex and difficult to visualize for planning and operations. While at the same time, increasing volatility of supply and demand in feedstock enables opportunities for margin improvement. Through digital transformation business units that have historically been disconnected silos can connect in real time to create a unified supply chain model that maximizes profitability by taking advantage of data mashups between real-time economic and market data sources and current plant and production status data.
- Digital Workforce Knowledge Capture and Retention: A generational shift is occurring in the oil and gas industry. As a generation of highly experienced refinery and pipeline operators begins to retire, it’s critical for oil and gas companies to accelerate the onboarding and training of new operators as much as possible to ensure safety and performance. At the same time training budgets are also being tightened, increasing the need to deliver training through a sustainable, efficient and effective model. Digital transformation offers several options to address these challenges. Virtual Reality (VR) and/or Augmented Reality (AR) are digital toolsets capable of connecting control room operators, maintenance, and field personnel in a single realistic learning environment.
- Improved Safety and Regulatory Compliance: Environmental, health and safety compliance is a paramount focus in the oil and gas industry. One of the main drivers of this focus is the implementation of a Zero Accidents culture. Regarding accident prevention strategies, a Zero Accident culture can be viewed as the idea that all accidents can be prevented through policy and procedure adherence. Many factors contribute to a good safety culture, including skilled employees, continuous safety risk assessment (HAZOP) and good practices and standards, next to primary and secondary process safety.
- Digital Asset Performance Management in Oil and Gas: Capital expense constraints limit investment in new equipment across all markets of the oil and gas industry. While demand increases, requiring greater production from existing machines. A complete digital Asset Performance Management (APM) solution combines enterprise data capture with asset management, advanced workflow, mobility, predictive analytics
and risk-based management to drive maximum return on asset investment through reduced downtime, lowered total cost of ownership, decreased maintenance costs and improved overall equipment effectiveness. - Process Optimization & Advanced Process Control: Optimization software utilizes plant data along with external data to find set-points that optimize operations and make performance improvements. Advanced Process Control (APC) software allows the refinery to adapt to new set-points smoothly and operate closer to the constraints by reducing the variance in the control variable. When used together, these two pieces of software work to maximize profitability.
Choosing the right technology investment requires analysis to ensure successful digital transformation and optimum ROI. It starts with whether the technology can address a problem that you have identified in your company. Digital transformation is part of an ongoing journey towards continuous process improvement involving the collaboration of people, processes, and assets through the right technology. It doesn’t happen all at once but instead gains speed and velocity over time as people, processes, and assets are digitally fused together to bridge the operations technology and information technology gap eventually. Start small in your strategy and adoption. However, start now to maintain or improve your competitive market and industry position.
Read More: Start your journey with AVEVA today
[1] “Industry 4.0: How to navigate digitization
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