The Digital Plant: Transforming Operations

By Gaurav Khandelwal | Jun 07, 2016

Walk into a power plant or manufacturing shop floor today and there is one thing you are almost guaranteed to see: paper, and lots of it.

In the next five to ten years, that will all start to change, as industry laggards catch up to the practices at industry leaders.

We are talking about the transformation into a digital plant. The digital plant of the future is a series of integrated and intelligent ecosystems that catalyze efficiency through two main value propositions: surfacing real-time data and historical data patterns to the appropriate decision-makers and operators, and learning from historical data, often shared between assets, to drive more effective and efficient processes. Reimagining your operations with data-driven processes, from dynamic scheduling and reliability-centered maintenance to real-time logistics management, free those workflows from the wastes that slowly eat away at the ROI of traditional plant operations. Paper processes, whiteboards of data, a remote workforce without the right remote tools — these are the “death by a thousand cuts” of operational excellence.

Every aspect of the plant value chain becomes connected to the larger digital ecosystem, from the inventory visibility systems to the end-customer CPQ system or mobile application. As companies start to digitize, they leverage contextually aware and personalized applications to seamlessly connect the digital to the physical and create complete transparency and full visibility. One product moving from raw material to end-customer’s hands leaves a data trail, that also fits into each of the operating assets’ data history associated with its production, and even extending its mark into the CFO’s projections and the HR office’s performance data.

In the digital plant, data is the key driver. Every asset and workflow is part of a larger ecosystem continuously sharing with one another. For example, in manufacturing, RFID tracking on raw materials indicates their progress and stage of completion. When they reach a certain production “gate,” push notifications go out to the appropriate inspection officer to check. Executives have full visibility into operations on the floor and have a complete, real-time picture of their operations. Assets rely on their historical data to detect failure patterns, and when certain thresholds are reached, either set off alarms to communicate to the appropriate personnel, or even go one step further in diagnosing the root cause. For operations planning personnel, such as those planning refinery turnarounds in the oil and gas industry, can clone and then manipulate data to understand how certain changes to procedures will affect the overall picture.

Calculating the return on investment on such a dramatic transformation, requires detailed and scientific approach to understanding where your operations currently are. In order to prioritize your digital plant investment areas, it’s important to understand the potential impact these investments can have. For example, according to industry research, the maintenance department at a typical plant only averages about 30 percent “wrench time,” which is time actually spent performing maintenance. The other 70 percent is data entry and retrieval, work-order reporting and other miscellaneous tasks.

Digitizing the data entry and work-order reporting could lead to a massive increase in productivity and savings. When that is multiplied by the salary of each maintenance employee, the financial benefits could be seven figures or more for large plants. How does this compare, for example, to digitizing driver safety forms and avoiding fines? Don’t wait until after the app has launched to figure out these comparisons. Calculate them before with historical data from field observations and contextual inquiries, and use that to decide which digital plant project will be the first in your portfolio.

How will the digital plant transform?

  1. Routine maintenance— Digitizing asset performance and reducing the over half of maintenance work that this study found as not needed. One analysis showed that as much as 63 percent of all instrument work orders did not result in corrective action because there was nothing wrong with the equipment. The time wasted on this, of which most operations leaders are completely ignorant, is definitely in the millions over a full year.
  2. Turnaround maintenance— In the oil and gas industry, refinery turnarounds are a major maintenance initiative and can last several weeks. Planning these, which include about 30,000 separate procedures, is an undertaking of its own. Digital plants can make planning, and eventually executing, so much more efficient with the creation of a digital clone of your dataset. Planning personnel can use that to test and understand how different scenarios would affect the overall picture.
  3. Remote workforce— How much time does your remote workforce spend traveling between sites to do routine checks, while having to lug around a laptop or check numbers with someone at the main office? This is a key area to mobilize. Cutting down on travel time can result in major ROI for your remote workforce, such as one of ChaiOne’s recent applications, Weatherford Cygnet, doubled operator productivity.
  4. Catastrophe avoidance— Getting the valuable insights into plant operations will save plants from shutdowns. Set alerts within the data to communicate to the appropriate personnel when the data crosses a threshold that indicates failure is likely.
  5. Health, Safety and Environment — Contextually aware applications can alert your operators at the exact right moment in potentially hazardous situations. Rather than having a few signs around on proper procedures, digital tools that understand geolocation, indoor location, and proximity to equipment can make this more of an interactive, and therefore, memorable experience.
  6. Supply chain visibility— RFID tracking and real-time GPS tracking will keep everyone in the loop on where product or the workforce is, cutting down on time workers spend waiting for product to arrive, and can even be deployed to help customers understand where their product will arrive.
  7. Inventory managementVendor-managed inventory is a huge push for lean manufacturing. The digital plant makes this easier, by automating the communication channels between the vendor and the customer.
  8. Workforce management— Gaining visibility into the productivity of employees can instantly yield workflow and process changes. Often, management is quick to jump to incorrect conclusions as to what issues get in the way of employee KPIs.
  9. Real-time and accurate financial projections— With full, and real-time visibility into what is going on with the plant, the financial office can use that data to power their financial projections and adjust accordingly. Some firms today do weekly, or even monthly calculations.
  10. Sales enablement— Digitizing the sales process and tying the marketing team more closely in with the sales team will make both more efficient at hitting KPIs. In addition, creating a digital CPQ system that integrates with current inventory will make the customer ordering process significantly more seamless.

The Obstacles to the Digital Plant

What is holding companies back from making smart investments in the digital plant? Along with cost and resources, the foundation of the digital plant needs to be put in place, which is no small task. Companies who are dealing with decades-old legacy systems, as well as older hardware and faulty software development processes will have a lot to overcome.

  • Poor data management. The key to intelligent assets lies in the historical data and behavior patterns they use to learn. Unfortunately, for most companies, mergers and acquisitions have created a lot of issues with data standardization.
  • Legacy hardware. Operating equipment often needs an upgrade in order for it to fully integrate with digital ecosystems. Understanding the cracks in your IT-OT convergence will help overcome this issue.
  • Culture. Investing in digital plant initiatives is a poor idea without a requisite investment in training and culture management. Not all of your employees will feel completely comfortable with new technology, or even worse, trust that it will not replace staff.
  • Poor user requirements. Any digital plant tools you deploy won’t work if the tools don’t fit within the users’ experience. The digital plant process will naturally cause some process changes and workflow redesign.
  • Lack of strategy. Digital innovation strategy requires a top-down and holistic approach. A lot of companies struggle with creating one-off apps within each business line, but then fail to connect those to overarching strategy.

When companies overcome these obstacles, they are to see realize the value from the digital plant— and get ahead in their industry. Stay tuned to the rest of the posts in this series on the benefits and challenges of the digital plant!
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