Data & the Industry
For a long time now, a lot of an organization’s records and information have been digitally maintained in various data systems such as the all too well-known IT & OT systems. Numerous heavy industries such as the Oil & Gas, Petrochemical, etc. have been dealing with large amounts of complex data for a long time. However, when it comes to digital maturity, they are not too high on the index. As such, the numerous technologies that have been adopted by them so far are usually confined to different assets, functions, processes, equipment, etc. This has not only created data silos around these different operational elements, but also islands around people.
The Status Quo
Industry evolved through workarounds against
Limited Computational Capabilities
Limited Communication Bandwidths
Early stage of Software Evolution
Lack of Understanding of the New Domain (IT)
Monolithic Point Applications
Inhouse Data Centers
Data Lock-in by vendors
The Apollo Guidance Compute (AGC) had a clock speed of 2.048 MHz – just a pair of AGCs took man to the moon and brought them back safely.Today, a computer in a smartwatch is 1000.times faster and has 100,000 times more memory. That’s staggering computational power at our finger tips.
The reduction of cost of computation power is even more mind boggling as seen from the above graphics. Especially, the hardware cost which has dropped more than a billion times over last 30 years. The twin effect of staggering computational power at a negligible cost is driving the most disruptive change of our generation – Digitalization or Digital Transformation. The manifestation of this is very evident in our personal lives. Our phone, music system, movie theater, social interaction platform – all converged into a single super computer, i.e. our smart phones. Each and every appliance in our home today, be it refrigerators, microwave oven or a washing machines, have a decently powerful computer in it and they are collecting as well as transmitting data in one way or the other. We are in the era of pervasive computing. When it comes to the Industrial World, the changes are not as visible. However, we are definitely at the brink of a very disruptive change – Industrial Digitalization.
The Age of Digitalization
The dawn of Digitalization is very evident when we look at the list of most valuable companies in the world and how the list has changed over the past few years.
Data really is the new oil – TECH now dominates the “Top Dog” list. Every organization that has embraced Digitalization and uses data as its fuel is more valuable than traditional mega-majors of yester-years. Status Quo is NOT an option for the industry anymore. The ability to leverage Data and Software has become the key differentiator for all businesses including manufacturing, logistics, healthcare, energy, etc. Digitalization really is an imperative, and not an option any more.
Industrial Digitalization is THE centerpiece that allows organizations to connect anything and everything and allows innovations to flourish. It facilitates collaboration, efficiency, safety, and profitability. Digitalization is not only for cutting costs and improving efficiency for the industry, it is also, doing wonders for their Top Line by enabling new revenue streams and new business models.
Let’s look at a phenomenon called Servitization that helps to elaborate. Servitization is a new business model that is being adopted by many OEMs and Contractors. These are essentially the “I manufacture equipment, I set up plants” guys. Instead of selling a compressor, they are now selling “Compression Services”. The OEM now owns and operates the compressor and signs a SLA (Service-Level-Agreement) with their customer who uses the “Compression Service”. This has been made possible through Digitalization. The equipment manufacturer now can keep an eye on the compressor through a live cyber replica or “Digital Twin” of the equipment and can ensure 100% uptime and fulfillment of all other SLA parameters. It is a whole new revenue stream and business model. This “product/equipment” as a service (PaaS) business model has also helped reduce the barriers and delays associated with Capex (at customers’ end) cycles. Moreover, as they are monitoring the usage and health of equipment for the end-users, automated spares or upgrade recommendation has also become a possibility creating up-selling and cross-selling opportunities. As the OEMs can now have global overview of the fleet, they can now offer many other innovative services.
The Operations Digital Twin (ODT)
Digital Twin is a concept that has been around for a long time. It is a foundational element of Digitalization. At the engineering phase of its life-cycle, Digital Twin of an equipment (pump, car, ship, plant unit, etc.) is created by marrying data from various CAD and CAE tools. This space is clearly defined and relatively mature – it has been around for a longer time.
However, what we are talking about today is the digital twins of the entities, both physical and non-physical, during the Operations phase of the life-Cycle of the plant and business – Operations Digital Twins (ODT).
In any business and manufacturing operations, all physical and non-physical entities are interlinked. For example, in a petroleum refinery, a physical entity such as a pump, may affect inventory in the tank, thus affecting the working capital, berth utilization, demurrage paid, KPI’s such as “Quality Give Away”, etc. The impact of a pump failure ripples all the way up to the staffs’ and companies’ performances and rewards. As such, “Operations Digital Twins” (ODTs) are a different ball game altogether, and need the confluence of data from IT, OT and upcoming IoT world. It’s also complex given the relationships that it must account for, and hence, also needs the proper confluence of that Data, Domain Expertise, Functional Knowledge, and Technology. This is the business, we, dDriven, are in – Operations Digitalization and Operations Digital Twins. We have seen the immense amount of tangible value that it can deliver to our customers.
Our customers are now connected to the “Pulse” of their operations – proactively drawing their attention to exceptions and potential un-wanted events, be it excess oxygen in the furnace or too much working capital tied in inventory, or a scheduling conflict. It allows them to have “Insight” into their operations from different perspectives – for example, look at the alert from of the CDU feed pump from the perspective of the Plant Manager, Production Manager, Planner/ Scheduler, or Maintenance Manager. It also gives them foresight about the expected optimal coil-out-temperature (COT) for the next crude change, evaluate the possibility of failure of the DE bearing of the feed pump motor before the next scheduled shutdown.
Most importantly, it allows them to prioritize actions based on clear economic perspective – accumulated and projected cost of excess oxygen in the furnaces, cost of the dead stock, demurrage incurred due to break down of sea-loading pump, etc. These are just a few of the things out of a big pool of issues that we have helped our customers with. Operations Digitalization can power numerous more use-cases, and we have seen the amount of value that they can deliver over both the short, and long term.
In a world where Digital Selection or Digital Darwinism decides who survives and who doesn’t, Digitalization is an absolute imperative. Without Digital Transformation, organizations will fade. Leaving your business and plant floor operations in digital darkness is not an option. It is critical for industrial organizations to embark on their journey with the right partner, whom they trust, and who have the expertise to guide them.
This transformation is not an easy one, it is complex and requires a lot of knowledge and skill. On the bright side, it is not impossible either, otherwise we, a startup, would not exist. Our customers, who are Fortune 500 mega majors, can vouch for the success and the benefits of the Operations Digitalization journey they undertook with us. This is one of the only investments in the world that guarantees ROIs of epic proportions when done right with a dependable partner.