Oil and gas 4.0: Making excellence operational
Even by recent standards, the rapid pace of change has been enough to give the oil and gas industry whiplash. New geopolitical realities are disrupting common operating practices. Increasingly complex operating conditions threaten already squeezed margins. There’s relentless pressure to cut costs whilst increasing productivity. Hazardous events have induced more rigorous compliance requirements and amplified public scrutiny.
All these factors make the drive for operational excellence critical. The need to simultaneously reduce risk, increase productivity and cut costs is the new baseline for the industry.
The advance of digitalisation
Achieving operational excellence requires everyone, to consistently make the most effective decision. However, the risk-cost-productivity equation is a delicate balancing act and deciding to increase productivity without considering the impact on risk is too easy – and dangerous.
Fortunately, digitalisation offers major promise. In its 2016 Global Industry 4.0 Survey, PwC claimed: “Industry 4.0 will be a huge boon to companies that fully understand what it means for how they do business. Change of this nature will transcend your company’s boundaries and lead to a complete transformation of your organisation.”
Consultants at Accenture agree. “Digital technology brings more than incremental improvements to operations. It has the potential to transform plants, enable operational excellence and disrupt the competitive landscape in the industry.”
Advancement of technologies like smart sensors, digital twins, machine learning, AI and cloud-based solutions is breath-taking. They promise greater IT/OT convergence, making the Industrial Internet of Things (IIoT) a reality.
They also promise to unlock further business process integration within the organisation and across the supply chain. For example, by automatically assessing current asset health, recognising patterns that lead to failure, delivering alerts and automatically triggering maintenance processes, operators can beat the risk curve, optimising productivity.
Digitalisation is being linked to better decision-making, improving safety and productivity whilst increasing asset uptime and reducing costs.
Viewing digitalisation as a silver bullet is a mistake. It’s a dangerous assumption that we can point analytics at disparate data, apply some machine learning and expect actionable insight. Recognising that the digitalisation hype comes with an equal potential for disappointment and disillusionment is an important step.
Back to basics
For those of us on the frontline during the dot.com hype, the digitisation excitement feels like déjà vu. To avoid the same mistakes we must ensure technology is used to solve real business problems.
To ensure digitalisation delivers, operators must return to the basics of technology planning and implementation. Organisations must define their objectives, then look at the data and insight needed to support them.
For example, take risk management – an essential business goal. People at the frontline intervene to operate, maintain, inspect and fix equipment on an asset. It’s a changeable and dangerous place to work. But information on the multiple components of risk is managed differently by different parts of the organisation, held in silos and mostly, inaccessible. A holistic, up-to-date view of risk is not automatically available. Instead decision-makers are forced into manual searches for relevant data and using their experience to judge when situations become unsafe.
Common currencies are key to better understanding
To gain visibility, control risk and ensure operational continuity, across the business, everyone must understands and manage risk against the same criteria — with a practical understanding of how their decisions influence risk.
The dynamic nature of risk makes it difficult to connect the performance of safety systems and processes to the operational reality of the business. Here, operational excellence platforms come to the fore. They unlock the potential in data that’s typically been hidden away and provide meaningful insights by translating, aggregating and making information available in real-time. This practical approach to operational risk management connects process safety and risk-control system performance to frontline operations, making major accident hazard risk exposure visible, prominent and available for everyone, anytime.
This common currency of risk enables everyone from frontline staff to CEOs to compare meaningful risk information, necessary for decision-making. For example, a maintenance engineer understands the impact of delaying valve maintenance – on his KPIs, team’s schedule or department’s workload, but also the impact spreading across the organisation. It’s how everyone starts to understand that the short-term fix may create as many problems as it solves – and enables them to find the optimal solution.
When presenting data in a user-focused way that accurately informs decisions and improves the prioritisation of facility operations, the value is clear. For example:
- Frontline operations have immediate, easy-to-read access to data-rich information on equipment and activity status, with context to consistently make better-informed, risk-dependent decisions
- Site management and planners have access to tools showing the risk implications of scheduling decisions, protracted deviations and planned activities, alongside what-if scenarios, enhancing future planning
- Asset leadership can accurately see risk levels and productivity alongside trends for plan-attainment. This enables them to compare asset performance and to dive into the data, observing what is generating the highest risk levels
- Executives can take an enterprise-wide view to compare asset performance, securing greater insight into how risk is managed
Connected, collaborative, excellence, operational
Technology cannot act alone but it can enable an organisation and contribute to a more collaborative culture, where a disciplined approach to everyday decision-making enables key business objectives. It’s crucial to start with the business challenges that must be solved.
For our industry to achieve operational excellence through effective risk management, productivity, and costs, operators must know what, when and how it’s happening in real-time.
Bringing together once-disparate pieces of information and adding the new data deluge gives an operator a full, three-dimensional view of every asset and facility. When clear information is made accessible to the entire organisation, everyone makes better choices. Everyone can actively participate in driving improvements to the business. And everyone contributes to operational excellence.
Interested in hearing industry leaders discuss subjects like this and sharing their IoT use-cases? Attend the IoT Tech Expo World Series events with upcoming shows in Silicon Valley, London and Amsterdam to learn more.
- » Sudhir Pai, TCC: On the parallels between energy, space and medicine for digital transformation
- » IoT platform Particle raises $40m in Qualcomm-led funding round
- » Verizon and SAP team up for ‘next-gen’ IoT analytics offering
- » Virgin Media will use its broadband cabinets to charge electric vehicles
- » Sidewalk Labs reaches a deal to move forward with smart city, albeit scaled back